Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"): (a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners; (b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares; (c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock; (d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company; (e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice; (f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice; (g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate); (h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment; (i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company; (j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger); (k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation; (l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and (m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 3 contracts
Samples: Merger Agreement (Olivetti S P A), Merger Agreement (Cellular Communications International Inc), Agreement and Plan of Merger (Cellular Communications International Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees thatPrior to the Effective Time, (i) except unless Parent or Acquisition Corp. shall otherwise agree in writing or as expressly otherwise contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date")::
(ai) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, course;
(ii) the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
not (bA) the Company will not, directly or indirectlyindirectly redeem, (i) except upon exercise of stock options purchase or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge otherwise acquire or agree to sellredeem, transfer purchase or pledge otherwise acquire any treasury stock shares of the Company beneficially owned by it, its capital stock; (iiB) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documentsBy-laws except to effectuate the Company Stock Split; or (iiiC) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) Stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property or make any distribution with respect to its capital any such stock; , except to effectuate the Company Stock Split;
(iiiii) issue, sell, pledge, dispose of the Company shall not (A) issue or encumber agree to issue any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments warrants or rights of any kind to acquire, acquire any shares of capital stock of any class of the Companyof, other than Company Stock, except to issue shares of Company Common Stock reserved for issuance on the date hereof pursuant to in connection with the exercise of Options or Warrants or conversion of Voting Debt stock options outstanding on the date hereof, the conversion of the Series A Preferred Stock and the Shareholder Notes and in connection with the Company Stock Split; (iiiB) transfer, lease, license, sell, mortgage, pledge, acquire or dispose of, of any fixed assets or encumber acquire or dispose of any other substantial assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officersbusiness; (ii)(AC) adopt incur additional Indebtedness or any new, other liabilities or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except other transaction other than in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (ivD) enter into any material contract, agreement, commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change arrangement with respect to any of the accounting methods used by it unless required by GAAPforegoing; or (iiE) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required except as contemplated by GAAPthis Agreement, enter into any closing contract, agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do dissolve, merge, consolidate or enter into any other material business combination;
(iv) the Company shall use its best efforts to preserve intact the business organization of the Company, to keep available the service of its present officers and key employees, and to preserve the good will of those having business relationships with it;
(v) the Company will not, nor will it authorize any director or authorize or permit any officer or employee or any attorney, accountant or other representative retained by it to, make, solicit, encourage any inquiries with respect to, or engage in any negotiations concerning, any Acquisition Proposal (as defined below). The Company will promptly advise Parent orally and in writing of any such inquiries or proposals (or requests for information) and the substance thereof. As used in this paragraph, “Acquisition Proposal” shall mean any proposal for a merger or other business combination involving the Company or for the acquisition of a substantial equity interest in it or any material assets of it other than as contemplated by this Agreement. The Company will immediately cease and cause to be terminated any existing activities, discussions or negotiations with any person conducted heretofore with respect to any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.; and
Appears in 3 contracts
Samples: Merger Agreement (Electro Energy Inc), Merger Agreement (Electro Energy Inc), Merger Agreement (Electro Energy Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the Termination Date, except as contemplated by this Agreement, as required by law, as set forth in Schedule 5.01 or as approved by Parent in writing (i) which approval shall not be unreasonably withheld or delayed), the business of the Company and the Subsidiaries shall be conducted in the ordinary course of business, and the Company and the Subsidiaries shall use their reasonable best efforts to preserve substantially intact their business organization, and to preserve their present relationships with customers, suppliers and other Persons with which any of them has significant business relations. Without limiting the generality of the foregoing, except as expressly contemplated by any other provision of this Agreement, the Option Agreement or the Stockholders Agreementas required by law, or as set forth in Schedule 5.01, neither the Company nor any Subsidiary shall, during such period, without the prior written consent of Parent (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, which consent shall not be unreasonably withheld or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"delayed):
(a) the business amend or otherwise change its certificate of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnersincorporation or bylaws (or comparable organizational or charter documents);
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable forgrant, or encumber: (i) any shares of any class of capital stock of the Company or any Subsidiary, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of stock, Rights, or any class other ownership interest (including any phantom interest), of the CompanyCompany or any Subsidiary, except for the issuance of Shares and associated Rights issuable pursuant to Company Stock Options and other than shares of Company Common Stock reserved for issuance contractual rights outstanding on the date hereof and set forth in the Company Disclosure Schedules pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date Article III hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (ivii) redeem, purchase or otherwise acquire directly or indirectly any material assets of its capital stock;
(d) the Company shall not: (i) grant or any increase in Subsidiary, except for sales of inventory and encumbrances on the compensation payable or to become payable by assets of the Company to or any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except Subsidiary in the ordinary course of business and in a manner consistent with past practice;
(fc) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for dividends by any direct or indirect wholly-owned Subsidiary to the Company shall not permit or any insurance policy naming it as other Subsidiary;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any capital stock of the Company or any Subsidiary, other than in connection with the exercise of Company Stock Options or other contractual rights existing on the date hereof and set forth in the Company Disclosure Schedules pursuant to Article III hereof;
(i) acquire or dispose of (including by merger, consolidation, license, lease, acquisition or disposition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof having a beneficiary value (including the amount of any assumed indebtedness) in excess of $1,000,000, individually or a loss payable payee to be cancelled in the aggregate; (ii) repurchase, repay, cancel or terminated without notice to the Purchaserincur any indebtedness for borrowed money, except other than (A) in connection with permitted acquisitions or (B) scheduled payments in the ordinary course of business and consistent with past practice;
practice and in connection with currently outstanding capital leases and indebtedness for borrowed money; (giii) the Company shall not (i) incur grant any Lien in, on or assume to any long-term debt, orof its material assets to secure any indebtedness for borrowed money, except in connection with such indebtedness permitted under the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practicepreceding clause (ii); (iiiv) issue any debt securities or assume, guaranteeendorse, endorse or otherwise become liable or responsible (whether directlyfor, contingently or otherwise) for the obligations of any Person other Personthan a Subsidiary, or make any loans or advances to any Person other than a Subsidiary; (v) except to the extent the amount is reflected in the ordinary course Company’s capital expenditure budget on the date hereof (a copy of which has been provided to Parent), authorize, or make any commitment with respect to, any single capital expenditure that is in excess of $250,000 or capital expenditures which are, in the aggregate, in excess of $1,000,000 for the Company and the Subsidiaries taken as a whole; (vi) enter into any new line of business and consistent with past practiceoutside of its existing business segments; or (iiivii) make investments in Persons other than Subsidiaries, other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)in cash and cash equivalents made consistent with past practice and in accordance with the Company’s existing investment policy;
(hf) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; adopt or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger) or any Subsidiary;
(g) (i) increase the compensation payable or to become payable or the benefits provided to any current or former director or executive officer; (ii) grant any retention, severance or termination pay to, or enter into any employment, bonus, change of control or severance agreement with, any current or former director or executive officer; (iii) establish, adopt, enter into, terminate or materially amend any collective bargaining agreement or Plan (other than individual contracts, agreements or commitments with employees who are not directors or executive officers); or (iv) establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be such a Plan if it were in existence as of the date of this Agreement, except as required by law or as required under any existing Plan or Contract disclosed in the Company Disclosure Schedule;
(i) except as required by law or the Treasury Regulations promulgated under the Code, make any change (or file any such change) in any method of Tax accounting for a material amount of Taxes or (ii) make, change or rescind any material Tax election, settle or compromise any material Tax liability, file any amended Tax Return involving a material amount of additional Taxes (except as required by law), enter into any closing agreement relating to a material amount of Taxes, or waive or extend the statute of limitations in respect of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business), other than, in each case, in the ordinary course of business and consistent with past practice;
(i) make any material change to its methods of accounting in effect at December 31, 2006, except (i) as required by changes in GAAP (or any interpretation thereof) or Regulation S-X under the Exchange Act, (ii) as may be required by a change in applicable law, (iii) as disclosed in an SEC Report filed prior to the date hereof or (iv) as required by a Governmental Entity or quasi-Governmental Entity (including the Financial Accounting Standards Board or any similar organization);
(j) pay, discharge, waive, settle or satisfy any material claim (which shall include, but not be limited to, any pending or threatened material Action), other than a payment, discharge, waiver, settlement or satisfaction, in accordance with their terms, of claims disclosed in the most recent financial statements (or the notes thereto) of the Company included in an SEC Report filed prior to the date hereof;
(k) other than in the Company shall not takeordinary course of business, amend, modify, cancel or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions consent to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as termination of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;Material Contract; or
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior agree to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do take any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingactions described in Sections 5.1(a) through 5.1(k) above.
Appears in 2 contracts
Samples: Merger Agreement (Industrial Distribution Group Inc), Merger Agreement (King Luther Capital Management Corp)
Conduct of Business by the Company Pending the Merger. The Company ----------------------------------------------------- covenants and agrees that, (i) except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Effective Time, unless Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 otherwise agree in writing or as otherwise expressly contemplated or permitted by this Agreement (the "Appointment Date"including Schedule 5.1):
(a) the business businesses and affairs of the Company and its subsidiaries shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(fb) except as set forth in Schedule 5.1 and except in connection with the adoption by the Company shall of a shareholder rights plan that would not permit any insurance policy naming it as a beneficiary be applicable to, or a loss payable payee adversely affect the transactions contemplated hereby among the parties to be cancelled or terminated without notice to the Purchaserthis Agreement, except in the ordinary course of business and consistent with past practice;
(g) neither the Company shall not nor any of its subsidiaries shall: (i) incur issue (except pursuant to (i) employee and non-employee director stock options outstanding on the date hereof (ii) upon the conversion of the Preferred Shares or assume (iii) upon the exercise of Warrants, each of (i), (ii) and (iii) in accordance with its terms), sell, pledge, dispose of or encumber (or permit any long-term debtof its subsidiaries to issue, orsell, pledge, dispose of or encumber): (A) any additional shares of, or any options, warrants, conversion privileges or rights of any kind to acquire any shares of, any capital stock of the Company or any of its subsidiaries, or (B) any material assets of the Company or any of its subsidiaries except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assumeamend or propose to amend the certificate or articles of incorporation or bylaws or similar governing instruments of the Company or any of its subsidiaries; (iii) split, guaranteecombine or reclassify any outstanding Shares, endorse or declare, set aside or pay any dividend or other distribution, payable in cash, stock, property or otherwise become liable with respect to the Shares and Preferred Shares (other than regular quarterly dividends on the Preferred Shares); (iv) redeem, purchase or responsible acquire, or offer to acquire (whether directlyor permit any of its subsidiaries to redeem, contingently purchase or acquire or offer to acquire) any Shares or other securities of the Company (other than Warrants); or (v) enter into or modify any contract, agreement, commitment or arrangement with respect to any of the matters set forth in this Section 5.1(b);
(c) neither the Company nor any of its subsidiaries shall (i) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division or material assets thereof for aggregate consideration in excess of $10,000,000; (ii) incur any indebtedness for borrowed money or issue any debt securities except the obligations borrowing of any other Person, except working capital in the ordinary course of business and consistent with past practice; or (iii) other than ordinary course expense advancesenter into or materially modify any contract, make agreement, commitment or arrangement with respect to any loansof the foregoing;
(d) except as set forth in Schedule 5.1, advances neither the Company nor any of its subsidiaries shall enter into or capital contributions tomodify any employment, severance or similar agreements or arrangements with, or investments ingrant any bonuses, any other Person; salary increases, severance or (iv) enter into any material commitment or transaction (including, but not limited termination pay to, any borrowingofficers, capital expenditure directors or purchase, sale or lease of assets or real estate)employees;
(he) except as set forth in Schedule 5.1, neither the Company nor any of its subsidiaries shall not adopt or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any officer, director or employee, other than (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practicepractice for the benefit or welfare of any employee, (ii) for the purpose of accelerating the vesting of restricted stock that was granted on or claimsbefore November 25, liabilities 1995 or obligations reflected or reserved against in, or contemplated by, (iii) to the consolidated financial statements (or the notes thereto) of the Companyextent required by law;
(jf) the Company shall use reasonable efforts (i) to cause its current insurance (or reinsurance) policies not adopt a plan of complete to be cancelled or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdictionterminated; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Magma Copper Co), Merger Agreement (BHP Sub Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) except Except as expressly otherwise contemplated by this Agreement, the Option Agreement or disclosed in the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Company Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereofhereof and until the Effective Time or earlier termination of this Agreement, and prior to unless CytRx shall otherwise agree in writing (which agreement shall not be unreasonably withheld or delayed), the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):Company shall:
(a) the conduct its business of the Company shall be conducted only in the ordinary and usual course and, to the extent of business consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnerspast practice;
(b) consult with CytRx, in advance, regarding the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock conduct and management of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding SharesCompany’s clinical trials and other development activities;
(c) use its commercially reasonable efforts to mitigate or compromise the Liabilities of the Company shall not: from time to time;
(d) not (i) amend or propose to amend its Certificate of Incorporation or its Bylaws, (ii) split, combine, subdivide or reclassify any shares of outstanding capital stock, (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock, property or otherwise, or make any other distribution in respect of any shares of its capital stock, or (iv) repurchase, redeem or otherwise acquire, or modify or amend, any shares of its capital stock or property any other securities or any rights, warrants or options to acquire any such shares or other securities;
(e) not issue, sell, pledge, grant or dispose of, or agree to issue, sell, pledge, grant or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, its capital stock of any class or any debt or equity securities convertible into or exchangeable for its capital stock, except that the Company may issue shares upon the exercise of Company Warrants outstanding on the date hereof;
(f) not (i) incur or become contingently liable with respect to any indebtedness for borrowed money, (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock; , (iiiii) issuemake any acquisition of any capital stock, assets or businesses of any other person other than expenditures for current assets in the ordinary course of business consistent with past practice and expenditures for fixed or capital assets in the ordinary course of business consistent with past practice, (iv) sell, pledge, dispose of or encumber any additional shares ofassets or businesses that are material to the Company, except (A) sales, leases, rentals and licenses in the ordinary course of business consistent with past practice, (B) pursuant to contracts that are in force at the date of this Agreement and are disclosed in the Company Disclosure Schedules hereto, (C) dispositions of obsolete or worthless assets or, or securities convertible (v) enter into any contract with respect to any of the foregoing;
(g) use all reasonable efforts to preserve intact its business organization and goodwill, keep available the services of its present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them, other than as expressly permitted by the terms of this Agreement;
(h) not enter into, amend, modify or exchangeable forrenew any employment, consulting, severance or optionssimilar contract with, warrantspay any bonus or grant any increase in salary, calls, commitments wage or rights of other compensation or any kind to acquireincrease in any employee benefit to, any shares of capital stock of any class directors, officers or employees of the Company, other than shares except in each such case (i) as may be required by applicable law or (ii) to satisfy obligations existing as of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise terms of Options or Warrants or conversion of Voting Debt outstanding contracts that are in effect on the date hereof; ;
(iiii) transfernot enter into, leaseestablish, licenseadopt, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur amend or modify any indebtedness pension, retirement, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other liabilityemployee benefit, other than incentive or welfare plan, agreement, program or arrangement, in respect of any directors, officers or employees of the ordinary and usual course Company, except, in each such case (i) as may be required by applicable law or pursuant to the terms of business and consistent with past practice; this Agreement or (ivii) redeem, purchase or otherwise acquire directly or indirectly any to satisfy obligations existing as of its capital stockthe date hereof pursuant to the terms of contracts that are in effect on the date hereof;
(dj) except to the Company shall not: (i) grant any increase extent required under existing employee and director benefit plans, agreements or arrangements as in effect on the compensation payable date hereof or to become payable as expressly provided by the Company to any of its executive officers; (ii)(A) adopt any newthis Agreement, or (B) amend or otherwise increase, or not accelerate the payment, right to payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, retirement, deferred compensation, stock option, stock purchase, insurance, pension, retirement insurance or other employee benefit plancompensation or benefits;
(k) not make capital expenditures or enter into any binding commitment or contract to make capital expenditures, agreement except (i) capital expenditures which the Company or arrangement; or its subsidiaries are currently committed to make, (ii) capital expenditures consistent with the estimated amounts disclosed in the Company SEC Reports, (iii) enter into any employment or severance agreement with or, except capital expenditures for emergency repairs and other capital expenditures necessary in accordance with the existing written policies light of circumstances not anticipated as of the Company, grant any severance or termination pay date of this Agreement which are necessary to any officer, director or employee of avoid significant disruption to the Company;
(e) the Company shall not modify, amend ’s business or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and operations consistent with past practice;
practice (fand, if reasonably practicable, after consultation with CytRx), and (iv) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business repairs and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except maintenance in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(hl) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax electionmake, change or revoke any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into law or make any closing agreement, settle agreement or settlement with any taxing authority regarding any material Tax claim amount of Taxes or assessment or consent which would reasonably be expected to any material Tax claim or assessment or any waiver materially increase the obligations of the statute of limitations for any such material claim Company or assessmentthe Surviving Corporation to pay Taxes in the future;
(im) the Company shall not make any changes in financial or Tax accounting methods, principles or practices (or change an annual accounting period), except insofar as may be required by a change in generally accepted accounting principles or applicable law;
(n) not adopt a plan or agreement of complete or partial liquidation or dissolution;
(o) not pay, discharge or satisfy any material claims, material liabilities or material obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction (A) of any such material claims, material liabilities or obligations, material obligations in the ordinary course of business and consistent with past practice, practice or (B) of material claims, material liabilities or material obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Company SEC Reports;
(p) not agree to the settlement of any claim, litigation, investigation or other action that is material to the Company;
(q) not enter into any contract that restrains, limits or impedes the ability of the Company or the Surviving Corporation to compete with or conduct any business or line of business, including geographic limitations on the activities of the Company;
(jr) not materially modify or amend, or terminate any Material Contract, or waive, relinquish, release or terminate any material right or material claim, or enter into any contract that would have been a Material Contract if it had been in existence at the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization time of the Company (other than the Merger)execution of this Agreement;
(ks) not incur transaction costs and expenses in connection with this Agreement and the transactions contemplated hereby, including, without limitation, legal, accounting and financial advisory fees, including fees payable to the Company shall not takeFinancial Advisor but excluding fees payable to Ropes & Xxxx LLP (collectively, or agree to commit to take“Transaction Costs”), any action that would, or is reasonably likely to, result in any excess of $200,000 in the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdictionaggregate; and
(mt) the Company shall not enter into an agreement, contract, commitment or arrangement agree to do take any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingforegoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Innovive Pharmaceuticals, Inc.), Merger Agreement (Cytrx Corp)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) except Except as expressly otherwise contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 in Section 6.1 of the Company Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, hereof and prior to the time Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, the directors of the Purchaser have been elected to Company shall, and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):cause its subsidiaries to:
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its their respective best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than conduct their respective businesses in the ordinary and usual course of business and consistent with past practice;
(b) not (i) amend or propose to amend their respective certificates of incorporation, by-laws or other similar governing documents, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions by a wholly-owned subsidiary of the Company;
(c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that the Company may issue (i) shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof (or granted hereafter in accordance with the terms of this Agreement) in accordance with their terms or pursuant to the Rights Agreement and (ii) options to purchase up to 25,000 shares of Company Common Stock to employees who are hired by the Company after the date hereof and prior to the Closing Date, provided, however, that all options referenced in this clause (ii) shall be issued under the Company Option Plans and the vesting of all such options shall not be accelerated or otherwise modified as a result of the transactions contemplated hereby;
(d) not (i) incur or modify become contingently liable with respect to any indebtedness or other liability, for borrowed money other than (A) borrowings in the ordinary course of business or (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent, (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) take or fail to take any action which action or failure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares and usual except to the extent of stockholders in special circumstances) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger or would otherwise cause the Merger not to qualify as a reorganization under Section 368 of the Code, (iv) make any acquisition of any assets or businesses other than expenditures for current assets in the ordinary course of business and expenditures for fixed or capital assets in the ordinary course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any the Company's capital budget disclosed in Section 6.1 of its capital stock;
(d) the Company shall not: Disclosure Schedule, (iv) grant sell, pledge, dispose of or encumber any increase material assets or businesses other than sales in the compensation payable or ordinary course of business, (vi) except as otherwise permitted pursuant to become payable by the provisions hereof, take any action which would be reasonably likely to prevent the Company to from (A) obtaining any of Company Statutory Approvals, (B) performing its executive officers; (ii)(A) adopt any newcovenants and agreements under this Agreement, or (BC) amend or otherwise increaseconsummating the transactions contemplated hereby, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iiivii) enter into any employment binding contract, agreement, commitment or severance agreement arrangement with or, except in accordance with the existing written policies respect to any of the Company, grant any severance or termination pay to any officer, director or employee of the Companyforegoing;
(e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement;
(f) not enter into or amend in any material respect any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers or key employees, except in the ordinary course and consistent with past practice (it being expressly understood that the interpretation and administration of any such arrangement by a duly authorized administrator or administrative body consistent with the terms thereof shall not constitute a breach hereof); provided, however, that the Company and its subsidiaries shall not modify, amend or terminate in no event enter into any of its material contracts or waive, release or assign any material rights or claimswritten employment agreement, except for employment agreements entered into with new employees of Theta Limited and then only so long as (i) such employment agreements are entered into in the ordinary course of business and consistent with past practice;
practices, (fii) such employment agreements contain terms and provisions comparable to those applicable to current employees of Theta Limited in comparable positions, and (iii) if the Company shall not permit any insurance policy naming it as a beneficiary employees with whom Theta Limited intends to enter written agreements will hold positions at or a loss payable payee above the Product Marketing Manager level, then such new employees may only fill positions which are vacated or up to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practicethree additional newly created positions;
(g) not adopt, enter into or amend in any material respect any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, health care, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any employee or retiree, except as required to comply with changes in applicable law (it being expressly understood that the interpretation and administration of any such plan or arrangement by a duly authorized administrator or administrative body consistent with the terms thereof shall not constitute a breach hereof), provided, however, that the Company shall not may make such amendments to certain of its outstanding option agreements as required by Section 7.12;
(ih) incur or assume any long-term debt, or, except use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in the ordinary course of business, incur or assume any short-term indebtedness in such amounts not and against such risks and losses as are consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);and
(h) the Company shall not (i) not implement any change any of the in accounting methods used by it unless principles, practices or methods, other than as may be required by GAAPUnited States generally accepted accounting principles, the Financial Accounting Standards Board, the SEC or any other government authority or oversight agency; or and
(iij) other than related to a QEF Election, make any material Tax electionnot make, change or revoke any material Tax election already made, adopt or make any material Tax accounting method, change agreement or settlement regarding Taxes with any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingtaxing authority.
Appears in 2 contracts
Samples: Merger Agreement (Westell Technologies Inc), Merger Agreement (Teltrend Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants Except for actions reasonably necessary to effect the consummation of the transactions contemplated by, and agrees thatin accordance with the terms of, (i) except as expressly contemplated by this the Asset Purchase Agreement, during the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after period from the date hereof, and prior to the of this Agreement until such time the directors of the Purchaser have been elected to and as Parent's designees shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company, the Company shall, and shall be conducted only cause each of its Subsidiaries to, in all material respects carry on its business in, and not enter into any material transaction other than in accordance with, the ordinary and usual course of its business as currently conducted and, to the extent consistent therewith, the Company shall use its reasonable best reasonable efforts to preserve intact its current business organization intact organizations, keep available the services of its current officers and maintain key employees and preserve its existing relations relationships with customers, suppliers, employees, creditors suppliers and others having business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant dealings with it to the Option Plans outstanding on end that its goodwill and ongoing business shall not be impaired. Without limiting the date hereof or upon exercise generality of outstanding Warrants or conversion of Voting Debtthe foregoing, issue, sell, transfer or pledge or agree and except as referred to sell, transfer or pledge any treasury stock in Item 6.1 of the Company beneficially owned Letter or as otherwise expressly contemplated by itthis Agreement or the Asset Purchase Agreement or required by law, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) splitduring such period, combine or reclassify the outstanding Shares;
(c) the Company shall not: , and shall not permit any of its Subsidiaries to, without the prior written consent of Parent (iwhich consent shall not be unreasonably withheld):
(a) (w) declare, set aside or pay any dividend dividends on, or make any other distribution payable actual, constructive or deemed distributions in cashrespect of, stock or property with respect to any of its capital stock; , or otherwise make any payments to its shareholders in their capacity as such (iiother than regular quarterly dividends of not more than $0.165 per share on the Common Stock and regular semi-annual dividends of not more than $0.975 per share on the ESOP Preferred Stock, in each case declared and paid on dates consistent with past practice), (x) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, except the issuance of shares of Common Stock upon conversion of any share of ESOP Preferred Stock in accordance with the terms thereof, or (y) except as required under existing employee benefit plans, agreements, policies, awards or arrangements in effect on the date of this Agreement, purchase, redeem or otherwise acquire any shares of its capital stock or those of any Subsidiary or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(b) except as required under existing employee benefit plans, agreements, policies, awards or arrangements in effect on the date of this Agreement, issue, deliver, sell, pledge, dispose of or otherwise encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of stock, any class of the Companyother voting securities or equity equivalent or any securities convertible into, or any rights, warrants or options to acquire any such shares, voting securities, equity equivalent or convertible securities (other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the Rights Agreement or the issuance of shares of Common Stock upon the exercise of Company Stock Options or Warrants or conversion of Voting Debt outstanding on the date hereof; of this Agreement in accordance with their current terms and the issuance of shares of Common Stock upon the conversion of any shares of ESOP Preferred Stock into shares of Common Stock in accordance with the terms thereof);
(iiic) transfer, lease, license, sell, mortgage, pledge, dispose of, amend its Articles of Incorporation or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness By-laws or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stocksimilar organizational documents;
(d) acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of or equity in, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets, other than the purchase of raw materials and goods and services used in the manufacture of the products of the businesses of the Company shall not: (i) grant any increase and its Subsidiaries, in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except each case in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except and other transactions that are in the ordinary course of business and consistent with past practicepractice and which in the aggregate involve assets having a purchase price not in excess of $1,000,000;
(ge) sell, lease or otherwise dispose of, or agree to sell, lease or otherwise dispose of, any of its assets, other than the sale of products of the businesses of the Company shall not (i) incur or assume any long-term debtand its Subsidiaries, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except each case in the ordinary course of business and consistent with past practice; (iii) , and other than transactions that are in the ordinary course expense advances, of business consistent with past practice and which in the aggregate involve assets having a fair market value or book value not in excess of $500,000;
(f) incur any new indebtedness for borrowed money or guarantee any such indebtedness or issue or sell any debt securities or guarantee any debt securities of others or make any loans, advances or capital contributions to, or other investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)person, other than to or in the payment, discharge Company or satisfaction any wholly owned Subsidiary of any such claims, liabilities or obligations, the Company and other than customary travel and similar advances to employees in the ordinary course of business and consistent with past practices;
(g) alter (through merger, liquidation, reorganization, restructuring or in any other fashion) the corporate structure or ownership of the Company or any Subsidiary;
(h) enter into or adopt, or amend any existing, severance plan, agreement or arrangement or enter into or amend any Company Plan or employment or consulting agreement, other than as required by law;
(i) except as required under existing plans, agreements, policies, awards or arrangements in effect on the date of this Agreement or as described in Item 6.1 of the Company Letter, increase the compensation payable or to become payable to its officers or employees, except, in the case of employees who are not officers, for increases in the ordinary course of business consistent with past practice, pay or claims, liabilities or obligations reflected or reserved against incommit to pay any bonus, or contemplated bygrant any severance or termination pay to, or enter into any employment or severance agreement, or establish, adopt, enter into, or amend in any material respect or take action to enhance in any material respect or accelerate any rights or benefits under, any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, stock ownership, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the consolidated financial statements (benefit of any director, officer or the notes thereto) of the Companyemployee, except, in each case, as may be required to comply with applicable law or regulation;
(j) the Company shall not adopt a plan of complete violate or partial liquidationfail to perform any material obligation or duty imposed upon it by any applicable federal, dissolutionstate or local law, mergerrule, consolidationregulation, restructuring, recapitalization guideline or other reorganization of the Company (other than the Merger)ordinance;
(k) redeem the Company shall not take, Rights or agree to commit to take, any action that would, or is reasonably likely to, result in any of amend the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummationRights Agreement;
(l) breach in any material respect any of its material representations, warranties, covenants or agreements contained in the Company shall not redeem the Rights Asset Purchase Agreement (regardless of any provisions regarding notice or terminatelapse of time, or both) or waive any of its material rights under, amend or otherwise modify terminate the Rights Agreement prior to Asset Purchase Agreement, other than a waiver of the condition regarding the consummation of the Offer unless required to do so by order contained in Section 5.3(d) of a court of competent jurisdiction; andthe Asset Purchase Agreement;
(m) the Company shall not enter into an agreementmake any material change in its accounting methods, contractpolicies or procedures, commitment except as a result of any change in law or arrangement generally accepted accounting principles;
(n) prepare or file any Tax Return inconsistent with past practice or, on any such Tax Return, take any position, make any election or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods, or give any approval or consent under Section 4.13, or agree to do any allocation under Section 1.2(c), of the foregoing, or to Asset Purchase Agreement without the prior written consent of Parent; or
(o) authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing. The Company shall promptly advise Parent orally and in writing of any change or event having, or which could reasonably be expected to have, a Material Adverse Effect on the Company or which could prevent or materially delay the consummation of the Offer or the Merger.
Appears in 2 contracts
Samples: Merger Agreement (Kysor Industrial Corp /Mi/), Merger Agreement (Scotsman Industries Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) except as expressly contemplated by between the date of this AgreementAgreement and the Effective Time, unless the Parent shall otherwise consent in writing, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business businesses of the Company and its Subsidiaries shall be conducted only in the ordinary course of business and usual course and, to the extent in a manner consistent therewith, with past practice; and the Company shall will use its best reasonable efforts to preserve its substantially intact the business organization intact of the Company and maintain its existing relations Subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its Subsidiaries and to preserve the present relationships of the Company and its Subsidiaries with customers, suppliers, employees, creditors suppliers and business partners;
(b) other persons with which the Company will notor any of its Subsidiaries has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, neither the Company nor any of its Subsidiaries shall, between the date of this Agreement and the Effective Time, directly or indirectly, indirectly do any of the following without the prior written consent of the Parent:
(a) (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or pledge, dispose of, encumber, authorize, agree to sellor publicly propose the issuance, transfer sale, pledge, disposition, encumbrance or pledge authorization of any treasury shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest, of the Company beneficially owned by it, or any of its Subsidiaries; (ii) amend its Restated Certificate or publicly propose to amend the Articles of Incorporation or Bylaws By-Laws or similar equivalent organizational documentsdocuments of the Company or any of its Subsidiaries or of any term of any outstanding security of the Company or any Subsidiary; or (iii) split, combine or reclassify the any outstanding Shares;
(c) shares of capital stock of the Company shall not: (i) or its Subsidiaries or declare, set aside or pay any dividend or other distribution payable in cash, stock stock, property or property otherwise with respect to its capital stockthe Shares; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly offer to redeem, purchase or otherwise acquire any shares of or any options, warrants, convertible securities or rights of any kind to acquire shares of, its capital stock;
(d) the Company shall not: (i) grant stock or any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies ownership interest of the Company, grant except in the performance of its obligations under existing Plans or as specifically contemplated by this Agreement; or (v) authorize or propose or enter into any severance contract, agreement, commitment or termination pay arrangement with respect to any officer, director or employee of the Companymatters set forth in this Section 5.2(a);
(ei) the Company shall not modifyacquire (by merger, amend consolidation, or terminate any acquisition of its material contracts stock or waive, release or assign assets) any material rights corporation, partnership or claimsother business organization, business line or division thereof; (ii) except in the ordinary course of business and in a manner consistent with past practice;
(f) practices, sell, lease, transfer, assign, license, pledge, dispose of, or encumber or authorize or propose the sale, lease, transfer, assignment, license, pledge, disposition, mortgage, security interest in or encumbrance of any assets of the Company shall not permit or any insurance policy naming it as a beneficiary of its Subsidiaries; (iii) incur, assume or a loss payable payee to be cancelled prepay any indebtedness for borrowed money, or terminated without notice to the Purchaserenter into any transaction, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur contract or assume any long-term debt, oragreement, except in the ordinary course of business, incur or assume provided that borrowings will not in any short-term indebtedness event exceed $200,000 in amounts not consistent with past practicethe aggregate; (iiiv) assumeguaranty any indebtedness for borrowed money, guarantee(v) authorize any capital expenditures outside the Company's previously approved capital budget and other planned expenditures heretofore disclosed to the Purchaser which are in the aggregate in excess of $50,000; (vi) enter into or amend any contract, endorse agreement, commitment or otherwise become liable arrangement or responsible relinquish any right with respect to any of the matters set forth in this Section 5.2(b); (whether directly, contingently vii) amend or otherwise) for modify any of the obligations terms of any other Personstock option or grant any stock option, except in the ordinary course of business and consistent with past practicestock appreciation right or stock bonus; or (iiiviii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; person or (iv) enter into entity, other than to any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)wholly-owned Subsidiary;
(hc) take any action with respect to the Company shall not (i) change modification or grant of any of the accounting methods used by it unless required by GAAP; severance or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing termination pay or agreement, settle deferred compensation arrangement or employment agreement or grant any material Tax claim increase in benefits payable under its severance or assessment termination pay or consent to any material Tax claim or assessment deferred compensation agreements and policies or any waiver of employment agreements in effect on the statute of limitations for any such material claim or assessmentdate hereof;
(i) make any payments (except in the ordinary course of business and in amounts and in a manner consistent with past practice) under any Plan to any employee of, or independent contractor or consultant to, the Company or any Subsidiary; (ii) adopt any new, or amend any existing, incentive, retirement or welfare benefit arrangements, plans or programs for the benefit of current, former or retired employees of the Company and its Subsidiaries; or (iii) grant any increases in employee compensation or make any bonus or other special payments to employees, or award any stock options (except for automatic grants to directors as required by the terms of any Plan as in effect on the date hereof);
(e) take any action except in the ordinary course of business and in a manner consistent with past practice (none of which actions shall not be unreasonable or unusual) with respect to accounting policies or procedures (including without limitation its procedures with respect to the payment of accounts payable);
(f) before the purchase of Shares pursuant to the Offer and other than pursuant to this Agreement, take any action to cause the shares of Company Common Stock to cease to be listed on the New York Stock Exchange, Inc.;
(g) (i) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than except for the payment, discharge or satisfaction of any such claims, its liabilities or obligations, its obligations in the ordinary course of business and consistent or in accordance with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, their terms as in effect on the consolidated financial statements date hereof; (or the notes theretoii) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company reorganization; or (iii) settle or compromise any litigation brought against it other than settlements or compromises of any litigation where the Merger);amount paid in settlement or compromise does not exceed $15,000, exclusive of amounts covered by insurance; or
(kh) the Company shall not take, authorize or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention agreement to do any of the foregoing.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Mhi Group Inc), Agreement and Plan of Merger (Mhi Group Inc)
Conduct of Business by the Company Pending the Merger. (a) The Company covenants and agrees that, (i) between the date of this Agreement and the Effective Time, except as expressly contemplated by any other provision of this Agreement, the Option Agreement or as set forth in Section 6.01 of the Stockholders AgreementCompany Disclosure Schedule, or unless Parent shall otherwise consent in writing:
(i) the businesses of the Company and the Subsidiaries shall be conducted in all material respects in the ordinary course of business as currently conducted; and
(ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its reasonable best reasonable efforts to preserve its substantially intact the business organization intact of the Company and maintain its existing relations the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers, employees, creditors suppliers and other persons with which the Company or any Subsidiary has significant business partners;relations.
(b) By way of amplification and not limitation, except as expressly contemplated by any other provision of this Agreement or as set forth in Section 6.01 of the Company will notDisclosure Schedule, neither the Company nor any Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do any of the following without the prior written consent of Parent (which consent, except as to (i), (ii), (iii), (iv) or (vii), shall not be unreasonably withheld):
(i) except upon exercise amend or otherwise change its certificate of stock options incorporation or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof bylaws or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar equivalent organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, grant or securities convertible into or exchangeable forencumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of (A) any shares of any class of capital stock of the Company or any Subsidiary, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of stock, or any class other ownership interest (including any phantom interest), of the Company, other than shares Company or any Subsidiary (except for the issuance of Shares issuable pursuant to Company Common Stock reserved for issuance Options outstanding on the date hereof pursuant to and the exercise grant of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transferCompany Stock Options, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than Company Restricted Stock Awards and Company Performance Share Awards in the ordinary and usual course of business and in the manner and in amounts consistent with past practice, or incur or modify shares of stock of any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) Subsidiary issued to the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any newa wholly-owned Subsidiary), or (B) amend or otherwise increase, or accelerate the payment or vesting any amount of assets of the amounts payable Company or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except Subsidiary having an aggregate value in accordance with the existing written policies excess of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims$10,000,000, except in the ordinary course of business and in a manner consistent with past practice;
(fiii) the Company shall not permit declare, set aside, make or pay any insurance policy naming it as a beneficiary dividend or a loss other distribution, payable payee in cash, stock, property or otherwise, with respect to be cancelled or terminated without notice to the Purchaserany of its capital stock, except for regular quarterly dividends on Shares declared and paid in the ordinary course of business cash at times and in amounts consistent with past practicepractice and except for any dividend or other distribution made by any Subsidiary to the Company or a wholly-owned Subsidiary;
(giv) the Company shall not reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock or other securities;
(iv) (A) acquire (including by merger, consolidation, acquisition of stock or other equity interests of any corporation, partnership, other business organization or any division thereof or any other business combination) any amount of assets having an aggregate value in excess of $10,000,000; (B) incur any indebtedness for borrowed money or assume issue any long-term debt, or, except in the ordinary course of business, incur debt securities or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guaranteeguarantee or endorse, endorse or otherwise become liable or responsible (whether directlyfor, contingently or otherwise) for the obligations of any person, or make any loans or advances, or grant any security interest in any of its assets except (x) for any such transactions between the Company and the Subsidiaries or between the Subsidiaries, (y) under any agreements existing as of the date hereof, provided that at no time shall the aggregate amount of indebtedness outstanding under such agreements exceed the aggregate amount of indebtedness outstanding under such agreements as of the date hereof by more than $25,000,000, or (z) in connection with any transactions permitted under clause (D); (C) enter into any contract or agreement other Person, except than in the ordinary course of business and consistent with past practice; (iiiD) other than ordinary course expense advancesauthorize, or make any loanscommitment with respect to, advances any single capital expenditure which is in excess of $2,500,000 or capital contributions toexpenditures which are, in the aggregate, in excess of $10,000,000 for the Company and the Subsidiaries taken as a whole that is not set forth in the capital expenditure budget provided to Parent prior to the date hereof, except for capital expenditures reasonably required to respond to emergency-type occurrences involving life, health, personal safety or investments in, any other Personthe protection of property; or (ivE) enter into or amend any material contract, agreement, commitment or transaction (including, but not limited to, arrangement with respect to any borrowing, capital expenditure or purchase, sale or lease of assets or real estatematter set forth in this Section 6.01(b)(v);
(hvi) increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for (A) increases in the ordinary course of business and consistent with past practice in salaries or wages of employees of the Company shall or any Subsidiary who are not directors or officers of the Company, or (B) for stay bonuses which may be granted at the discretion of the Company not to exceed $750,000 in the aggregate, provided that (i) change any no stay bonuses will be granted to executive officers of the accounting methods used by it unless required by GAAP; or Company, (ii) the term of each stay bonus ends no earlier than December 31, 2008, (iii) the amount of each stay bonus shall not exceed two months of an individual’s base salary, and (iv) each stay bonus must be approved by the Company Vice President of Human Resources, who shall provide a reconciled report on a monthly basis to the Parent setting forth in reasonable detail the terms of the stay bonuses granted, or grant any severance or termination pay to (except in the ordinary course of business consistent with past practice or to the extent required by any Company Plan in effect on the date of this Agreement), or enter into any employment or severance agreement with, any director, officer or other employee of the Company (except with respect to employees who are not directors or officers of the Company in the ordinary course of business consistent with past practice), or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee, other than related amendments required or reasonably advisable to a QEF Electioncomply with ERISA, the Code or other applicable Law;
(vii) exercise its discretion with respect to or otherwise voluntarily accelerate the vesting of any Company Stock Option, Company Restricted Stock Award or Company Performance Share Award;
(viii) make any material Tax electionchange, other than reasonable and usual changes in the ordinary course of business and consistent with past practice, or as may be required by GAAP or as a result of a change of law, with respect to accounting policies or procedures;
(ix) make or change any material Tax election already madeor method of Tax accounting, adopt amend any material Tax accounting methodReturn filed prior to the date hereof, change settle or compromise any material Tax accounting method unless required by GAAPliability, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment relating to Taxes, or waive any waiver of the statute of limitations in respect of a material amount of Taxes or agree to any extension of time with respect to an assessment or deficiency for any such a material claim or assessmentamount of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business consistent with past practice);
(ix) the Company shall not pay, discharge or satisfy any claimsmaterial claim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligationssatisfaction, in the ordinary course of business and consistent with past practice, or claims, of liabilities or obligations (A) reflected or reserved against inin the Company Balance Sheet, (B) incurred under agreements or other obligations existing as of the date hereof or (C) subsequently incurred in the ordinary course of business and consistent with past practice;
(xi) amend, modify or consent to the termination of any Company Material Contract, or contemplated byamend, waive, modify or consent to the consolidated financial statements (or the notes thereto) termination of the Company’s or any Subsidiary’s material rights thereunder, other than in the ordinary course of business and consistent with past practice;
(jxii) commence or settle any material Action, including any Action relating to this Agreement or the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger)transactions contemplated hereby;
(kxiii) the permit any material item of Company shall not takeOwned Intellectual Property to lapse or to be abandoned, dedicated, or agree disclaimed, fail to commit to takeperform or make any applicable material filings, any action that wouldrecordings or other similar actions or filings, or is reasonably likely to, result fail to pay fees and taxes required or advisable to maintain and protect its interest in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the material Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummationOwned Intellectual Property;
(lxiv) fail to make in a timely manner any filings with the Company shall not redeem SEC required under the Rights Securities Act or terminatethe Exchange Act or the rules and regulations promulgated thereunder; or
(xv) announce an intention, amend enter into any agreement or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of make a court of competent jurisdiction; and
(m) the Company shall not enter into an agreementcommitment, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Corn Products International Inc), Merger Agreement (Bunge LTD)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) except Except as expressly otherwise contemplated by this Agreement, the Option Agreement or disclosed in the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Company Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, hereof and prior to until the time the directors Merger Effective Time or earlier termination of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 this Agreement (the "Appointment Date"):“Pre-Closing Period”), unless Pyramid shall otherwise agree in writing (which agreement shall not be unreasonably withheld or delayed), the Company shall:
(a) the conduct its business of the Company shall be conducted only in the ordinary and usual course and, to the extent of business consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnerspast practice;
(b) use its commercially reasonable efforts to mitigate or compromise the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock liabilities of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Sharesfrom time to time;
(c) the Company shall not: not (i) amend or propose to amend its certificate of incorporation or its bylaws, except as agreed to by the parties hereto, (ii) split, combine, subdivide or reclassify any shares of outstanding capital stock, (iii) declare, set aside or pay any dividend or other distribution payable in cash, stock stock, property or property with otherwise, or make any other distribution in respect to of any shares of its capital stock; , except for dividends by a direct or wholly-owned subsidiary of the Company to its parent, or a semi-annual (or pro-rated) cash or in-kind dividend on the Company Preferred Stock, or (iv) repurchase, redeem or otherwise acquire, or modify or amend, any shares of its capital stock or any other securities or any rights, warrants or options to acquire any such shares or other securities;
(d) except as set forth in Section 6.02(a) of the Company Disclosure Schedule, not issue, sell, pledge, grant or dispose of, or agree to issue, sell, pledge, grant or dispose of, any Company Restricted Shares, Company RSUs, or any additional shares of, or any options, warrants or rights of any kind to acquire any shares of, its capital stock of any class or any debt or equity securities convertible into or exchangeable for its capital stock, except that the Company may issue shares upon conversion of Company Preferred Stock outstanding on the date hereof;
(e) not (i) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (ii) issuemake any acquisition of any capital stock, assets or businesses of any other person other than expenditures for current assets in the ordinary course of business consistent with past practice and expenditures for fixed or capital assets in the ordinary course of business consistent with past practice, (iii) sell, pledge, dispose of or encumber any additional shares of, assets or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind businesses that are material to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; except (iiiA) transfersales, leaseleases, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary rentals and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except licenses in the ordinary course of business and consistent with past practice;
, (fB) pursuant to contracts that are in force at the date of this Agreement and are disclosed in Section 6.10 of the Company shall not permit any insurance policy naming it as a beneficiary Disclosure Schedule, (C) dispositions of obsolete or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, worthless assets or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material contract with respect to any of the foregoing;
(f) use all reasonable efforts to preserve intact its business organization and goodwill, keep available the services of its present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with it, other than as expressly permitted by the terms of this Agreement;
(g) not make capital expenditures or enter into any binding commitment or transaction contract to make capital expenditures, except (includingi) capital expenditures which the Company is currently committed to make, but (ii) capital expenditures in the ordinary course of the Company’s business, (iii) capital expenditures for repairs and other capital expenditures necessary in light of circumstances not limited toanticipated as of the date of this Agreement which are necessary to avoid significant disruption to the Company’s business or operations consistent with past practice, any borrowing, capital expenditure or purchase, sale or lease and (iv) repairs and maintenance in the ordinary course of assets or real estate)business;
(h) the Company shall not (i) change any adopt a plan or agreement of the accounting methods used by it unless required by GAAP; complete or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim partial liquidation or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessmentdissolution;
(i) the Company shall not pay, discharge or satisfy any material claims, material liabilities or material obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction (A) of any such material claims, material liabilities or obligations, material obligations in the ordinary course of business and consistent with past practice, practice or (B) of material claims, material liabilities or material obligations reflected or reserved against in, or contemplated by, the consolidated financial statements Company Financial Statements (or the notes thereto);
(j) not enter into any contract that restrains, limits or impedes the ability of the Company or the Surviving Corporation to compete with or conduct any business or line of business, including geographic limitations on the activities of the Company;
(jk) except in the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization ordinary course of the Company (other than the Merger);
(k) the Company shall Company’s business, not takematerially modify or amend, or agree to commit to take, terminate any action that wouldCompany Material Contract, or is reasonably likely towaive, result relinquish, release or terminate any material right or material claim, or enter into any contract that would have been a Company Material Contract if it had been in any existence at the time of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty execution of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;this Agreement; and
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior agree to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do take any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingforegoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Pyramid Oil Co), Merger Agreement (Pyramid Oil Co)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, Except as expressly permitted by clauses (i) except as expressly contemplated by through (xvii) of this AgreementSection 4.1, during the period from the date of this Agreement through the Effective Time, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereofCompany shall, and prior to the time the directors shall cause each of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the its Subsidiaries to, in all material respects carry on its business of the Company shall be conducted only in the ordinary and usual course of its business as currently conducted and, to the extent consistent therewith, use reasonable best efforts to preserve intact its current business organizations, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Without limiting the generality of the foregoing, and except as otherwise expressly contemplated by this Agreement or as set forth in the Company Letter (with specific reference to the applicable subsection below), the Company shall use not, and shall not permit any of its best reasonable efforts Subsidiaries to, without the prior written consent of Parent:
(i) (A) other than dividends paid by wholly-owned Subsidiaries, declare, set aside or pay any dividends on, or make any other actual, constructive or deemed distributions in respect of, any of its capital stock, or otherwise make any payments to preserve its business organization intact and maintain shareholders in their capacity as such, (B) other than in the case of any Subsidiary, split, combine or reclassify any of its existing relations with customerscapital stock or issue or authorize the issuance of any other securities in respect of, suppliersin lieu of or in substitution for shares of its capital stock or (C) purchase, employeesredeem or otherwise acquire any shares of capital stock of the Company or any other securities thereof or any rights, creditors and business partnerswarrants or options to acquire any such shares or other securities;
(bii) issue, deliver, sell, pledge, dispose of or otherwise encumber any shares of its capital stock, any other voting securities or equity equivalent or any securities convertible into, or any rights, warrants or options (including options under the Company Stock Option Plans) to acquire any such shares, voting securities, equity equivalent or convertible securities, other than (A) the issuance of shares of Company will not, directly or indirectly, (i) except Common Stock upon the exercise of stock options or other rights to purchase Company Stock Options outstanding on the date of this Agreement in accordance with their current terms and (B) the issuance of shares of Company Common Stock pursuant to the Stock Option Plans outstanding on Agreement;
(iii) amend the date hereof Company Charter or upon exercise by-laws;
(iv) acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of outstanding Warrants the assets of or conversion of Voting Debtequity in, issueor by any other manner, any business or any corporation, limited liability company, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets;
(v) sell, transfer lease or pledge otherwise dispose of, or agree to sell, transfer lease or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, otherwise dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights any of any kind to acquire, any shares of capital stock of any class of the Companyits assets, other than shares sales of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except inventory that are in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (ivi) incur any indebtedness for borrowed money, guarantee any such indebtedness or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or other investments in, any other Person; person, other than (A) in the ordinary course of business consistent with past practices and (B) indebtedness, loans, advances, capital contributions and investments between the Company and any of its wholly-owned Subsidiaries or between any of such wholly-owned Subsidiaries, in each case in the ordinary course of business consistent with past practice;
(ivvii) alter (through merger, liquidation, reorganization, restructuring or in any other fashion) the corporate structure or ownership of the Company or any Subsidiary;
(viii) except as provided in Section 4.1(viii) of the Company Letter, enter into or adopt any, or amend any existing, severance plan, agreement or arrangement or enter into or amend any Company Plan, employment, or any consulting agreement;
(ix) except as provided in Section 4.1(ix) of the Company Letter, increase the compensation payable or to become payable to its directors, officers or employees (except for increases in the ordinary course of business consistent with past practice in salaries or wages of employees of the Company or any of its Subsidiaries who are not officers of the Company or any of its Subsidiaries) or grant any severance or termination pay to, or enter into any material commitment employment or transaction (including, but not limited toseverance agreement with, any borrowingdirector or officer of the Company or any of its Subsidiaries, capital expenditure or purchaseestablish, sale adopt, enter into, or, except as may be required to comply with applicable law, amend in any material respect or lease take action to enhance in any material respect or accelerate any rights or benefits under, any labor, collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of assets any director, officer or real estateemployee;
(x) knowingly violate or knowingly fail to perform any obligation or duty imposed upon it or any Subsidiary by any applicable material federal, state or local law, rule, regulation, guideline or ordinance;
(xi) make any change to accounting policies or procedures (other than actions required to be taken by generally accepted accounting principles);
(hxii) the Company shall not prepare or file any Tax Return inconsistent with its past practice in preparing or filing similar Tax Returns in prior periods or, on any such Tax Return, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(ixiii) make or rescind any express or deemed election relating to Taxes or change any of the accounting its methods used by it unless required by GAAP; of reporting income or deductions for Tax purposes;
(iixiv) other than related to a QEF Election, make commence any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim litigation or assessment or consent proceeding with respect to any material Tax claim liability or assessment settle or compromise any waiver of the statute of limitations for material Tax liability without Parent's consent (which consent should not be unreasonably withheld) or commence any such other litigation or proceedings or settle or compromise any other material claim claims or assessmentlitigation;
(ixv) except as provided in Section 4.1(xv) of the Company shall not Letter, enter into, renew, terminate or amend any agreement or contract material to the Company and its Subsidiaries, taken as a whole, including any Significant Contract; or purchase any real property or make or agree to make any new capital expenditure or expenditures which in the aggregate are in excess of $5 million;
(xvi) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligationssatisfaction, in the ordinary course of business and consistent with past practicepractice or in accordance with their terms, or claims, of liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated most recent financial statements (or the notes thereto) of the Company;Company included in the Company SEC Documents or incurred in the ordinary course of business consistent with past practice; or
(jxvii) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing, or enter into any contract, agreement, commitment or arrangement to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Lunar Corp), Merger Agreement (General Electric Co)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, Except (i) except for actions taken by Life Sciences with respect to its business that do not, individually or in the aggregate, have a Material Adverse Effect on the Company (after giving effect to the Spin-Off), (ii) as otherwise expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed set forth in writing by the PurchaserCompany Disclosure Letter, after during the period from the date hereofof this Agreement through the Effective Time, the Company shall, and prior to shall cause each of its Subsidiaries to, in all material respects carry on its business in, and not enter into any material transaction other than in accordance with, the time the directors of the Purchaser have been elected to regular and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best commercially reasonable efforts to preserve intact its current business organization intact organization, keep available the services of its current officers and maintain key employees and preserve its existing relations relationships with its material customers, supplierssuppliers and others having material business dealings with it. Without limiting the generality of the foregoing, employeesand except as otherwise expressly contemplated by this Agreement, creditors the Spin-Off Agreements or as set forth in the Company Disclosure Letter, the Company shall not, and business partners;shall cause each of its Subsidiaries not to:
(ba) the Company will not, directly or indirectly, other than in connection with (i) except upon exercise the conversion of stock options or other rights to purchase shares of Company Preferred Stock into Common Stock pursuant to or the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by itredemption thereof in accordance with their current terms, (ii) amend its Restated Certificate the exercise of Incorporation or Bylaws or similar organizational documents; or options and warrants outstanding prior to the date hereof in accordance with their current terms, (iii) split, combine or reclassify the outstanding Shares;
payment of dividends on the Preferred Stock in accordance with their current terms and (civ) the Company shall not: Spin-Off, (ix) declare, set aside or pay any dividend dividends on, or make any other distribution payable actual, constructive or deemed distributions in cashrespect of, stock or property with respect to any of its capital stock; , or otherwise make any payments to its stockholders in their capacity as such, other than dividends declared prior to the date of this Agreement, (iiy) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (z) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(b) issue, deliver, sell, pledge, dispose of or otherwise encumber any additional shares ofof its capital stock, any other voting securities or equity equivalent or any securities convertible into, or securities convertible into any rights, warrants or exchangeable for, or options, warrants, calls, commitments or rights of any kind options to acquire, any shares of capital stock of any class of the Companysuch shares, voting securities or convertible securities or equity equivalent (other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; as specified in clauses (iiii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or through (iv) redeem, purchase of paragraph (a) above);
(c) amend its certificate of incorporation or otherwise acquire directly or indirectly any of its capital stockby-laws;
(d) acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the Company shall not: assets of or equity in, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets that in the aggregate have a value in excess of 1% of the Company's assets (except for the purchase of supplies and raw materials in the ordinary course of the Company's business), provided that (i) grant any increase in Purchaser shall not unreasonably withhold its consent to the compensation payable or to become payable Company's acquisition of additional plasma collection centers with an aggregate purchase price not exceeding $1,000,000 and (ii) Purchaser's consent shall not be required for the acquisition by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable underplasma collection center described in that certain bid letter, any existing bonusdated May 9, incentive compensation2001, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of prepared by the Company, grant any severance or termination pay a copy of which has been previously provided to any officer, director or employee of the CompanyPurchaser;
(e) the Company shall not modifysell, amend lease or terminate otherwise dispose of, or agree to sell, lease or otherwise dispose of, any of its material contracts or waiveassets that in the aggregate have a value in excess of 1% of the Company's assets (except for sales of assets, release or assign any material rights or claimsincluding the sale of inventory, except in the ordinary course of business and consistent with past practicethe Company's business);
(f) amend or otherwise modify in any material respect, or terminate, any material Contract, or enter into any joint venture, material lease or material management agreement or other material agreement of the Company shall or any of its Subsidiaries, except where any such action would not, individually or in the aggregate, have a Material Adverse Effect on the Company, provided that the Company may amend its contract with Centeon Bio-Services, Inc. without the consent of Purchaser so long as such amendment does not permit any insurance policy naming it as a beneficiary or a loss payable payee (i) increase the volume of plasma to be cancelled provided by the Company under such agreement, (ii) extend the term of such agreement, or terminated without notice (iii) modify the pricing terms of such agreement in a manner materially adverse to the Purchaser, Company.
(g) except for borrowings in the ordinary course under its credit facility and incurrence of trade payables in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of Company's business, incur any additional indebtedness (including for this purpose any indebtedness evidenced by notes, debentures, bonds, leases or assume other similar instruments, or secured by any short-term indebtedness lien on any property, conditional sale obligations, obligations under any title retention agreement and obligations under letters of credit or similar credit transaction) in amounts not consistent with past practice; (ii) assumea single transaction or a group of related transactions, guaranteeenter into a guaranty, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of engage in any other Personfinancing arrangements having a value in excess of 1% of the Company's assets, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, or make any loans, advances or capital contributions to, or investments in, any other Person; provided, however, that Purchaser's consent shall not be required for borrowings by the Company or (iv) enter into any material commitment of its Subsidiaries in connection with asset acquisitions consented to by Purchaser or transaction (including, but for which consent is not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estaterequired pursuant to Section 7.1(d);
(h) the Company shall not alter through merger, liquidation, reorganization, restructuring or similar action its corporate structure or ownership;
(i) except as may be required as a result of a change in law or in generally accepted accounting principles, change any of the accounting methods principles or practices used by it unless it;
(j) except as required by GAAP; in accordance with generally accepted accounting principles, revalue any of its assets, including, without limitation, writing down the value of its inventory or (ii) writing off notes or accounts receivable, other than related to a QEF Election, in the ordinary course of business;
(k) make any material Tax tax election, change any material Tax election already madeannual tax accounting period, adopt amend any material Tax accounting methodtax return, change settle or compromise any material Tax accounting method unless required by GAAPincome tax liability, enter into any closing agreement, settle any material Tax tax claim or assessment assessment, surrender any right to claim a tax refund or fail to make the payments or consent to any material Tax claim extension or assessment or any waiver of the statute of limitations for period applicable to any such material tax claim or assessment, except where any such action would not have a Material Adverse Effect on the Company;
(l) settle or compromise any pending suit, action or claim for an amount exceeding $100,000, provided that (i) Purchaser's consent is not required for any settlement in respect of the current arbitration involving Life Sciences up to the amount reserved in the Company Financial Statements as of the date hereof, and (ii) Purchaser's consent shall not paybe required where the Company or any of its Subsidiaries is the plaintiff party and is paying less than $100,000 to settle or compromise such pending suit, discharge action or satisfy claim;
(m) except for the payment of bonuses up to an aggregate amount of $500,000 to directors, officers and/or other employees based on fiscal year 2001 performance, materially increase in any claimsmanner the compensation or fringe benefits of any of its directors, liabilities officers and other key employees or obligations (absolutepay any material benefit not required by any existing plan or agreement to any such employees, accruedor become a party to, asserted amend or unassertedcommit itself to any pension, contingent retirement, profit-sharing or otherwise)welfare benefit plan or agreement or employment agreement or any other type of Company Benefit Plan with or for the benefit of any employee, other than increases in the payment, discharge compensation of employees who are not officers or satisfaction directors of the Company or any such claims, liabilities or obligations, of its Subsidiaries made in the ordinary course of business and consistent with past practice, or, except to the extent required by law, voluntarily accelerate the vesting of any compensation or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Companybenefit;
(jn) waive, amend or allow to lapse any material term or material condition of any material confidentiality or "standstill" agreement to which the Company shall not adopt is a plan of complete party;
(o) change the Company's dividend policy;
(p) enter into any transaction with a director or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization executive officer of the Company or any of its Subsidiaries or any Immediate Family Member of any such director or executive officer other than in the ordinary course of business consistent with past practices;
(q) enter into any business other than the Merger)ownership, management, operation and development of the Company Products and Services and business related thereto;
(kr) pursuant to or within the meaning of any bankruptcy law, (i) commence a voluntary case, (ii) consent to the entry of an order for relief against it in an involuntary case, (iii) consent to the appointment of a custodian of it or for all or substantially all of its property or (iv) make a general assignment for the benefit of its creditors;
(s) purchase or lease or enter into a binding agreement to purchase or lease any material real property; provided, however, that Purchaser's consent shall not be required (i) for leases entered into by the Company or any of its Subsidiaries in connection with asset acquisitions consented to by Purchaser or for which consent is not required pursuant to Section 7.1(d), (ii) to the exercise by the Company or any of its Subsidiaries of renewal or extension options on existing leases and (iii) to the renegotiation by the Company or any of its Subsidiaries of existing leases to extend the term of any such leases; provided that in the case of either clause (ii) or (iii) of this Section 7.1(s), such exercise of renewal or extension options on existing leases or renegotiation of existing leases shall not be effected on the basis of market rates applicable to the geographic areas in respect of such leases;
(t) enter into any employment agreement with any officer or key employee; or
(u) take, or agree to commit in writing or otherwise to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingforegoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Grupo Grifols Sa), Merger Agreement (Seracare Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) except Except as otherwise expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed consented in writing by Parent, as set forth in the PurchaserDisclosure Schedule or as required by applicable Law, after during the period from the date hereofof this Agreement to the earlier to occur of (x) the date of the termination of this Agreement or (y) the Effective Time, the Company shall, and prior to the time the directors shall cause each of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only its Subsidiaries to, in all material respects carry on their respective businesses in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its reasonable best reasonable efforts to preserve intact its current business organization intact organizations, keep available the services of its current officers and maintain employees and preserve its existing relations relationships with customers, suppliers, employees, creditors suppliers and others having significant business partners;
(b) dealings with the Company will notor any of its Subsidiaries. Without limiting the generality of the foregoing, directly and except as otherwise expressly contemplated by this Agreement or indirectlyas set forth in Section 5.1 of the Disclosure Schedule or as required by applicable Law, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant and subject to the Option Plans outstanding on the date hereof or upon exercise provisions of outstanding Warrants or conversion of Voting DebtARTICLE VIII, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: , and shall cause each of its Subsidiaries not to, without the prior written consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) (i) split, combine, reclassify, subdivide or amend the terms of any of its capital stock, (ii) declare, set aside or pay any dividend dividends on, or make any other distribution payable distributions (whether in cash, stock or property property) in respect of, any shares of its capital stock or enter into any agreement with respect to the voting or registration of any shares of its capital stock, or (iii) repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exchangeable or exercisable for shares of its capital stock; provided that (iiA) the Company may acquire Options, RSUs and SARs upon their exercise, settlement or forfeiture and (B) each wholly-owned Subsidiary of the Company may repurchase, redeem or otherwise acquire shares of its capital stock or other equity interests or securities convertible into or exchangeable or exercisable for any shares of its capital stock or other equity interests;
(b) issue, deliver, sell, pledge, transfer, convey, dispose of or encumber any additional shares ofof its capital stock, other equity securities or any securities convertible into, or securities convertible into any rights, warrants or exchangeable for, or options, warrants, calls, commitments or rights of any kind options to acquire, any such shares of its capital stock of any class of stock, such other equity securities or such convertible securities (provided that the Company, other than Company may issue shares of Company Common Stock reserved for issuance on the date hereof pursuant to the upon exercise of Options and/or vesting of RSUs);
(c) amend the Company’s certificate of incorporation or Warrants by-laws or conversion other organizational documents of Voting Debt outstanding on the date hereof; Company or its Subsidiaries;
(iiid) merge or consolidate with any other Person, except for any such transactions between wholly-owned Subsidiaries of the Company or between the Company and any of its wholly-owned Subsidiaries;
(e) make any acquisition or agree to make any acquisition of any business, by merger or otherwise;
(f) transfer, sell, lease, license, dispose of or encumber, or agree to transfer, sell, mortgagelease, pledgelicense, dispose ofof or encumber, any of assets of the Company or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase Subsidiaries that have a value in excess of $1,000,000 individually and $5,000,000 in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with oraggregate, except in accordance with the existing written policies sales of the Company, grant any severance inventory or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except obsolete assets in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practicebusiness;
(g) except for trade payables of the Company shall not (i) incur or assume any long-term debt, or, except of its Subsidiaries incurred in the ordinary course of business, (i) incur or assume any short-term indebtedness in amounts not consistent with past practiceadditional indebtedness; (ii) issue any debt securities or assume, guaranteeguarantee or endorse, endorse or otherwise become liable or responsible for (whether directly, contingently or otherwise) for ), the obligations of any other Person, except in the ordinary course of business and consistent with past practicePerson for borrowed money; or (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or Person (iv) enter into other than any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease wholly-owned Subsidiary of assets or real estatethe Company);
(h) the Company shall not except as may be required as a result of a change in regulatory accounting standards and practice or in U.S. GAAP (i) or any interpretation), change any of the accounting methods principles or practices used by it unless materially affecting the reported consolidated assets, liabilities or results of operations of the Company and its Subsidiaries;
(i) waive, settle or compromise any Proceeding, other than waivers, settlements or compromises that involve only the payment of monetary damages by the Company or any of its Subsidiaries of no more than $2,000,000 individually and $6,000,000 in the aggregate, in any case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company or any of its Subsidiaries;
(j) (i) terminate, establish, adopt, enter into, make any new grants or awards of stock based compensation or other benefits under, amend or otherwise modify, any Company Stock Plans, Employee Benefit Plans or employment agreements (or any plan or arrangement that would be a Company Stock Plan, Employee Benefit Plan or employment agreement if in existence on the date hereof) or increase the salary, wage, bonus or other compensation of any directors or employee of the Company or any of its Subsidiaries except (A) with respect to employees with a designation or title that is below the level of “Vice President,” or the equivalent, increases in compensation in connection with annual performance and salary reviews or upon promotion, payment of annual bonuses or non-material increases in benefits, in each case, in the ordinary course of business, (B) for grants of RSUs as permitted under Section 5.1(b) or (C) to the extent required by GAAPany of the Employee Benefit Plans, Company Stock Plans or employment agreements existing as of the date of this Agreement; (ii) enter into any severance, change of control, termination or retention arrangements with, or accelerate the compensation or benefits of, any employee or director; (iii) hire any Person or promote any Person (A) to be an officer or an employee with a designation of “Vice President” or above, except to fill a vacancy in the ordinary course of business or (B) with an annual base salary in excess of $200,000, other than Persons hired (x) to replace employees who are no longer with the Company or its Subsidiaries, or (y) to fill vacancies created by employee promotions; or (iiiv) make or forgive any loan to employees or directors (other than related to a QEF Electionmaking advances of reasonable travel and other business expenses in the ordinary course of business);
(k) except as required by applicable Law, make or change any material Tax election, change any material Tax election already madeaccounting period, adopt or change any material Tax accounting method, change amend any material Tax accounting method unless required by GAAPReturn, enter into any material closing agreement, settle any material Tax claim or assessment relating to the Company or any of its Subsidiaries, surrender any right to claim a refund of material Taxes, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any waiver of the statute of limitations for any such material claim or assessmentits Subsidiaries;
(il) the Company shall not payauthorize, discharge recommend, adopt, propose or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not announce an intention to adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummationits Subsidiaries;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) make or commit to any capital expenditures in excess of the capital expenditures budget set forth in Section 5.1(m) of the Disclosure Schedule, except to the extent that such excess is not greater than $10,000,000 in the aggregate;
(n) (i) except for Material Contracts of the type described in Section 3.17(b)(i) and entered into in the ordinary course of business with respect to customers and suppliers, enter into, terminate (except at the end of its term) or modify in any material respect any Material Contract (or any contract or agreement that if in existence on the date hereof would be a Material Contract) or waive, release or assign any material rights or claims thereunder, (ii) grant or acquire, agree to grant or to acquire from any third party, or dispose of or permit to lapse any right, title or interest to, any Intellectual Property, or encumber, impair, abandon, fail to diligently maintain, transfer or otherwise dispose of any right, title or interest of the Company shall or any of its Subsidiaries in any Company Intellectual Property (other than, in each case, pursuant to any Company Contract that is (A) a material transfer or sponsored research agreement, (B) a clinical trial agreement, or (C) a clinical research agreement entered into with a clinical research organization, in each case, that solely grants non-exclusive rights in the ordinary course of business consistent with past practices), or (iii) divulge, furnish to or make accessible any trade secrets within the Company Intellectual Property to any Person who is not subject to an enforceable written agreement to maintain the confidentiality of such trade secrets;
(o) announce, implement or effect any reduction in force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company or any of its Subsidiaries;
(p) enter into, amend or cancel any insurance policies other than in ordinary course of business;
(q) adopt or enter into an agreement, contract, commitment stockholder rights agreement or arrangement “poison pill”;
(r) acquire or dispose of any manufacturing facilities; or
(s) agree in writing or otherwise to do take any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingforegoing actions.
Appears in 2 contracts
Samples: Merger Agreement (Celgene Corp /De/), Merger Agreement (Abraxis BioScience, Inc.)
Conduct of Business by the Company Pending the Merger. (a) The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 7.1, except (i) except as expressly contemplated may be required by this AgreementLaw, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedulemay be consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (iii) as agreed may be expressly contemplated pursuant to this Agreement or (iv) as set forth in writing by the Purchaser, after the date hereof, and prior to the time the directors Section 5.1(a) of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 Company Disclosure Letter, (the "Appointment Date"):
(ax) the business of the Company and its subsidiaries and Affiliated Entities shall be conducted only in the ordinary course of business and usual course andin a manner consistent with past practice in all material respects, to the extent consistent therewith, the Company (y) it shall use its reasonable best reasonable efforts to keep available the services of the current executive officers and key employees of the Company and each of its subsidiaries and Affiliated Entities and to preserve the current relationships of the Company and each of its business organization intact subsidiaries and maintain its existing relations Affiliated Entities with each of the distributors, franchisees, customers, suppliers, employeesGovernmental Authorities and other persons with whom the Company or any of its subsidiaries and Affiliated Entities has material business relations and (z) the Company shall not and shall not permit any of its subsidiaries or Affiliated Entities to:
(i) amend, creditors restate, waive or otherwise change, in any respect, the Certificate of Incorporation or the Bylaws (or, in any material respect, the equivalent organizational or governing documents of any of the Company’s subsidiaries and business partnersAffiliated Entities);
(bii) except for transactions solely among the Company and its wholly owned subsidiaries or among the Company’s wholly owned subsidiaries, issue, sell, pledge, transfer, dispose, encumber or grant any shares of, or economic, ownership or voting interest of a nature accruing to holders of, its or its subsidiaries’ capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its subsidiaries’ capital stock; provided, however, that (A) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase may issue shares of Company Common Stock upon the exercise, vesting or settlement of any Company Equity Award issued and outstanding as of the Measurement Date, upon the exercise of rights granted under the ESPP, or as may be granted after the date hereof in accordance with Section 5.1(a)(ii)(B), in each case pursuant to the Option Plans outstanding terms and subject to the limitations (including limitations on shares of Company Common Stock authorized for issuance thereunder) thereof and (B) the Company may issue shares of its capital stock, or grant options, warrants, convertible securities or other rights to acquire shares of its capital stock (including Company Equity Awards) required pursuant to each employment agreement or offer letter as in effect as of the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock and set forth on Section 5.1(a)(ii) of the Company beneficially owned by itDisclosure Letter, (iior as otherwise set forth on Section 5.1(a)(ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding SharesCompany Disclosure Letter;
(c) the Company shall not: (iiii) declare, set aside aside, authorize, make or pay any dividend or other distribution distribution, payable in cash, stock stock, property or property otherwise, with respect to the Company’s or any of its capital stock; (ii) issue, sell, pledge, dispose of subsidiaries’ or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of Affiliated Entities’ capital stock or set any record date thereof, other than dividends paid by any subsidiary of the Company to the Company or any class wholly owned subsidiary of the Company, other than shares ;
(iv) except as required pursuant to the terms of Company Common Stock reserved for issuance on Benefit Plans as in effect as of the date hereof pursuant or as otherwise required by Law, (A) increase the compensation or other benefits payable or to become payable to current or former employees, directors or officers of the exercise Company or any of Options its subsidiaries or Warrants or conversion of Voting Debt outstanding on the date hereof; Affiliated Entities, except for increases in cash compensation to employees (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than officers and directors) in the ordinary and usual course of business and consistent with past practice, (B) grant any rights to severance or incur or modify any indebtedness termination pay or other liabilitytermination benefit, or enter into or amend any employment or severance agreement with, any current or former employees, directors, or officers of the Company or any of its subsidiaries or Affiliated Entities, other than in the ordinary and usual course of business and consistent with past practice; practice to employees (other than officers and directors) in connection with promotions or the hiring of new employees (ivother than officers and directors) redeemor the filling of a vacancy (other than officers and directors), purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iiiC) enter into any employment consulting, bonus, retention, retirement or severance similar agreement with orany employee, officer or director of the Company (including any change to performance targets associated therewith), (D) establish, adopt, enter into or amend any collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former employees, directors or officers or any of their beneficiaries, except, in each case, such action with respect to current or former employees that would not result in an increase to the Company in the cost of maintaining such collective bargaining agreement, plan, trust, fund, policy or arrangement; (E) amend or adopt any Company Benefit Plans (other than any such adoption or amendment that is not material to and does not increase the cost to the Company of maintaining such Company Benefit Plan or is required pursuant to the terms of such Company Benefit Plan in effect as of the date of this Agreement) or (F) accelerate the vesting, exercisability or payment of (or waive any performance conditions with respect to) or take any action to fund, any compensation or benefit (including any Company Equity Awards), except as otherwise expressly set forth in accordance with the existing written policies this Agreement; or (G) grant any additional equity based awards.
(v) acquire (including by merger, consolidation, or acquisition of stock or substantially all of the assets) or make any investment in any interest in (except in respect of any merger, consolidation, business combination among the Company and its wholly owned subsidiaries or among the Company, grant any severance or termination pay to any officer, director or employee ’s wholly owned subsidiaries which would not result in a material increase in the Tax liability of the Company;
(e) the Company shall not modify, amend or terminate any of its subsidiaries or the Affiliated Entities) any corporation, partnership, limited liability company, other business organization or any division or material contracts or waive, release or assign any material rights or claimsamount of assets thereof, except with respect to acquisitions of hospitalist and related practices and assets in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, each case in the ordinary course of business and consistent with past practice, or claimssuch acquisitions not to exceed $60 million in the aggregate; provided, liabilities or obligations reflected or reserved against in, or contemplated by, that the consolidated financial statements Company will provide Parent with prompt notice of the entry into any agreement related to any such acquisition;
(or vi) except for borrowings under the notes theretoCompany’s existing credit facilities (including any exercise of the accordion feature under the Credit Agreement) (which credit facilities have been disclosed to Parent as set forth on Section 5.1(a)(vi) of the Company Disclosure Letter) in accordance with the terms thereof, which borrowings shall not to exceed $60 million in the aggregate, incur or modify the terms of any indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than (a) pursuant to letters of credit in the ordinary course of business consistent with past practice or (b) any commodity, currency, sale or hedging agreements, in each case, in the ordinary course of business consistent with past practice and which (I) can be terminated on ninety 90 days or less notice without penalty or (II) expire no later than ninety (90) days from the date of such agreement; provided, that the Company provides Parent with prompt notice of the entry into any such commodity, currency, sale or hedging agreement;
(jvii) (a) enter into or become bound by any agreement that, if entered into prior to the date hereof, would be a Company Material Contract, other than in the ordinary course of business consistent with past practice which agreement has a term no longer than one (1) year, can be terminated by the Company without material penalty or other material adverse effect on the Company or its subsidiaries or Affiliated Entities upon notice of ninety (90) days or less, and which would not otherwise require Parent’s consent pursuant to this Section 5.1(a), (b) extend, modify or amend, fail to perform the terms of, fail to renew, or grant any release or relinquish any material rights under, any Company Material Contract or (c) terminate any Company Material Contract, other than business terminations in the ordinary course of business consistent with past practice that do not result in material penalty to the Company or any of its subsidiaries;
(viii) make any material change to its methods of accounting, except (A) as required by a change in GAAP (or any regulatory interpretation thereof), Regulation S-X promulgated by the SEC or a Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization) or (B) as required by a change in applicable Law;
(ix) reclassify, combine, split or subdivide any of its capital stock;
(x) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock, other than (A) the acquisition by the Company shall of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Options in order to pay the exercise price of the Company Option pursuant to the terms of such Company Options, (B) the withholding or disposition of shares of Company Common Stock to satisfy withholding Tax obligations with respect to Company Equity Awards, (C) the acquisition by the Company in the ordinary course of business consistent with past practice in connection with terminated employees of Company Equity Awards in connection with the forfeiture of such awards pursuant to the terms of the Company Equity Plans and in any event at a price per share not in excess of the fair market value of such award based on Merger Consideration and (D) the acquisition by the Company under the ESPP in order to satisfy participant elections under the ESPP;
(xi) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company recapitalization, merger (other than the Merger), consolidation or other reorganization (other than reorganizations involving only wholly owned subsidiaries of the Company which would not result in a material increase in the Tax liability of the Company or any of its subsidiaries);
(kxii) without limiting clause (vii), (A) assign, sell, transfer, license or sublicense, mortgage, abandon or encumber or subject to a Lien any (I) material Company IP, except for non-exclusive licenses or non-exclusive sublicenses of such Company IP in the ordinary course of business consistent with past practice or (II) any other material properties or assets, other than sales of inventory, assignments of leases or sub-leases, in each case, in the ordinary course of business consistent with past practice or equipment that is no longer used or useful in the operations of the Company or its subsidiaries or Affiliated Entities, or (B) fail to pay any fee, take any action, protect any trade secret, or make any filing reasonably necessary to maintain the material Company IP;
(xiii) enter into any new line of business outside of the Company’s and its subsidiaries’ and Affiliated Entities’ existing business on the date of this Agreement;
(xiv) settle any claim or Proceeding or agree to any remedies with respect to any Proceedings or settlement thereof, in each case made or pending against the Company or any of its subsidiaries or Affiliated Entities, other than the settlement of claims or Proceedings in the ordinary course of business consistent with past practice that (A) require payments by the Company or any of its subsidiaries Affiliated Entities (net of insurance proceeds) in an amount not to exceed, individually or in the aggregate, $3,000,000 and (B) do not involve any admission of wrongdoing, misconduct or provide any relief other than monetary damages subject to the limitations set forth in clause (A); provided, that the settlement of any stockholder litigation related solely to this Agreement or the transactions contemplated hereby shall not takerequire consent hereunder except as set forth on Section 5.1(a)(xiv) of the Company Disclosure Letter or apply toward the aggregate basket set forth in this Section 5.1(a)(xiv);
(xv) commit, authorize or make any capital expenditures, other than (A) in accordance with the Company’s capital expenditure plan as previously disclosed by the Company to Parent, and (B) otherwise in an aggregate amount for all such capital expenditures made pursuant to this clause (B) not to exceed $4,000,000;
(xvi) (i) make, change or rescind (or file a request to make, change or rescind) any material Tax election, (ii) settle or compromise any material Tax liability, audit claim or assessment, (iii) surrender any right to claim a material Tax refund, (iv) change in any material respect (or file a request to make any such change) any accounting method in respect of Taxes, (v) file any material amendment to a Tax Return, (vi) enter into any closing agreement, settle or compromise any material claim or material assessment in respect of any material Taxes, or (vii) consent to any extension or waiver of the statute of limitations applicable to any claim or assessment in respect of any material Taxes, except, in each case, as required by applicable Law;
(A) implement any employee layoffs that implicate the WARN Act or (B) recognize any union or other labor organization as the representative of any Company Employee or enter into any collective bargaining agreement; or
(xviii) authorize, or agree to or commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth actions described in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(lSection 5.1(a)(i) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingthrough Section 5.1(a)(xvii).
Appears in 2 contracts
Samples: Merger Agreement (IPC Healthcare, Inc.), Merger Agreement (Team Health Holdings Inc.)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees thatDuring the period from the date of this Agreement until the Closing or earlier termination of this Agreement, (i) except as otherwise expressly contemplated or permitted by this Agreement, as set forth in Section 6.01 of the Option Agreement Company Disclosure Letter, as required by applicable Law or the Stockholders AgreementOrder, or with the prior written consent of CF Corp (iiwhich consent shall not be unreasonably withheld, delayed or conditioned), (x) as disclosed on Schedule 5.2 the Company shall and shall cause each of its Subsidiaries to conduct their respective businesses and operations in the Disclosure Scheduleordinary course of business in all material respects consistent with past practices, or (iiiy) as agreed in writing by the Purchaser, after the date hereof, and prior subject to the time the directors of the Purchaser have been elected to limitations, restrictions and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
prohibitions set forth in clauses (a) the business through (w) of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewiththis Section 6.01, the Company shall use its reasonable best reasonable efforts to preserve intact its business organization intact and, its assets, keep available the services of its current officers, employees and maintain consultants and preserve its existing relations goodwill and its relationships with customers, suppliersreinsurers, employeesagents, creditors service providers and others having business partnersdealings with it, and (z) the Company shall not and shall cause each of its Subsidiaries not to:
(a) declare, set aside, make or pay any dividends or other distributions (whether in cash, stock or property) in respect of any of its or its Subsidiaries’ capital stock, other than (i) any dividends or distributions by a Subsidiary of the Company to the Company or to any other Subsidiary of the Company or (ii) quarterly cash dividends paid by the Company on the Company Common Stock not in excess of $0.065 per share, per quarter, with record and payment dates generally consistent with the timing of record and payment dates in the most recent comparable prior year fiscal quarter prior to the date of this Agreement;
(b) adjust, split, combine, subdivide or reclassify any of its capital stock or that of its Subsidiaries or issue or authorize or propose the Company will notissuance of any other securities in respect of, in lieu of or in substitution for, shares of its capital stock or that of its Subsidiaries;
(c) repurchase, redeem or otherwise acquire or offer to repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock or any Company Stock Rights;
(id) except upon exercise issue, deliver, offer, grant or sell any shares of stock options its capital stock, Company Stock Rights or Subsidiary Stock Rights, other rights to purchase than the issuance of shares of Company Common Stock pursuant to upon the Option Plans vesting or exercise of Company Stock Options, Company Performance RSUs or Company Restricted Stock Rights outstanding on as of the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Companyterms thereof;
(e) amend the Company shall Certificate of Incorporation or Company By-laws or equivalent organizational documents of the Company’s Subsidiaries;
(f) purchase an equity interest in, or a portion of the assets of, any Person or any division or business thereof or merge, combine, amalgamate or consolidate with any Person, in each case, other than (i) any such action solely between or among the Company and its wholly-owned Subsidiaries or solely between or among two or more wholly-owned Subsidiaries of the Company, (ii) in the ordinary course of business consistent with past practice with consideration not modify, amend to exceed $2,000,000 individually or terminate any of its material contracts in the aggregate or waive, release or assign any material rights or claims, except (iii) investment portfolio transactions in the ordinary course of business and consistent with past practicenot in violation of the Investment Guidelines in effect as of the date hereof;
(fg) sell, lease, license, allow to lapse, abandon, mortgage, encumber or otherwise dispose of, discontinue, abandon or fail to maintain any of its properties or assets (including capital stock of any Subsidiary of the Company) that are material, individually or in the aggregate, to the Company shall not permit any insurance policy naming it and its Subsidiaries, taken as a beneficiary whole, other than the sale or a loss payable payee to be cancelled other disposition or terminated without notice to any lease or license of assets (other than the Purchaser, except capital stock of any Subsidiary of the Company) (i) solely between or among the Company and its wholly-owned Subsidiaries or solely between or among two or more wholly-owned Subsidiaries of the Company or (ii) investment portfolio transactions in the ordinary course of business and consistent with past practicenot in violation of the Investment Guidelines as in effect as of the date of this Agreement;
(gh) incur, create or assume any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company shall not or any of its Subsidiaries, guarantee any such indebtedness or any debt securities of another Person, or enter into any “keep well” or other agreement to maintain any financial statement condition of another Person (collectively, “Indebtedness”), other than (i) incur guarantees by the Company of permitted Indebtedness of its wholly-owned Subsidiaries or assume any longguarantees by the wholly-term debtowned Subsidiaries of the Company of permitted Indebtedness of the Company, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except investment portfolio transactions in the ordinary course of business and consistent with past practice; not in violation of the Investment Guidelines as in effect as of the date of this Agreement or (iii) other than ordinary course expense advances, borrowings under the Company Existing Credit Agreement; provided that the Company shall consult with CF Corp before making any such borrowings under the Company Existing Credit Agreement in excess of $25,000,000;
(i) make any loans, advances advance or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not payor any of its wholly-owned Subsidiaries, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, ii) investment portfolio transactions in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) not in violation of the CompanyInvestment Guidelines as in effect as of the date of this Agreement;
(j) settle, commence or discharge any material Action made or pending against the Company shall or any of its Subsidiaries, or any of their respective directors or officers in their capacities as such, other than the settlement of Actions that would not reasonably be expected to prohibit or materially restrict the Company and its Subsidiaries from operating their business in substantially the same manner as operated on the date of this Agreement or require the waiver or release of any material rights or claims;
(k) cancel any material Indebtedness or waive any material benefits, claims or rights in connection therewith, in each case, other than in the ordinary course of business consistent with past practice;
(l) make any material change (i) in any accounting methods, principles or practices (including such methods, principles or practices relating to the estimation of Reserves), (ii) to the Investment Guidelines of the Company Insurance Entities as in effect as of the date of this Agreement, or (iii) to any of the actuarial, underwriting, claims administration or reinsurance policies, practices or principles of any Company Insurance Entity, in each case, except as required by GAAP or SAP;
(m) conduct any material revaluation of any asset, including any material writing-off of accounts receivable or reinsurance recoverables, other than as required by GAAP or SAP;
(n) except as required by a Benefit Plan as of the date hereof, grant any increases in the compensation or benefits of any of its directors, officers or employees;
(o) except as required by a Benefit Plan as of the date hereof, (i) make any grant of, or increase in, any severance or enter into any agreements or understandings concerning any type of compensation (whether present, deferred, or contingent) that is based on or otherwise relates to any acquisition, merger, consolidation, sale, or other disposition of all or substantially all of the assets of the Company payable to any director, officer or employee, (ii) accelerate the time of payment or vesting of, or the lapsing of any restrictions with respect to, or fund or otherwise secure the payment of, any compensation or material benefits under any Benefit Plan, or (iii) establish, adopt, enter into, amend or terminate any material Benefit Plan (or any plan, program, agreement, or arrangement that would constitute a material Benefit Plan if in effect on the date hereof);
(p) make or change any material Tax election, settle or compromise any material Tax liability, change its method of accounting, file any material amended Tax Return, fail to file any material Tax Return when due, surrender any right to claim a material Tax refund, offset or other reduction in Tax liability or consent to join any affiliated, consolidated, combined or unitary group for Tax purposes;
(q) enter into or amend or modify in any material respect, terminate, cancel or extend any Material Contract or enter into any contract or agreement that if in effect as of the date hereof would be a Material Contract or Reinsurance Contract, other than in the ordinary course of business consistent with past practice;
(r) enter into or amend in any significant manner any contract, agreement or commitment with any former or present director or officer of the Company or any of its Subsidiaries or with any Affiliate of any of the foregoing Persons or any other Person covered under Item 404(a) of Regulation S-K under the Securities Act, other than as would not be adverse to the Company and its Subsidiaries;
(s) authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of with respect to the Company (other than the Merger)or any of its Subsidiaries;
(kt) the Company shall not take(i) enter into any new line of business or (ii) change in any material respect any material products or any material operating or enterprise risk management policies, in each case, except as required by Law or by policies imposed, or agree to commit to takerequests made, by a Governmental Authority;
(u) enter into any action that wouldagreement or commitment with any insurance regulatory authority other than in the ordinary course of business consistent with past practice;
(v) enter into (i) any material funding obligations of any kind, or is reasonably likely tomaterial obligation to make any additional advances or investments (including any obligation relating to any currency or interest rate swap, result hedge or similar arrangement) in respect of, any of the conditions Investment Assets or (ii) any material outstanding commitments, options, put agreements or other arrangements relating to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of Investment Assets to which the Company contained herein inaccurate or any of its Subsidiaries may be subject upon or after the Closing, in any respect ateach case, other than as would not, individually or as of any time prior toin the aggregate, the Effective Time, or that would materially impair the ability of the reasonably be likely to have a Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;Material Adverse Effect; or
(lw) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior agree to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do take any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingactions described in this Section 6.01.
Appears in 2 contracts
Samples: Merger Agreement (CF Corp), Merger Agreement (Fidelity & Guaranty Life)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) during the period from the date of this Agreement and continuing until the earlier to occur of the termination of this Agreement or the Effective Time, except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, required by applicable law or (ii) as disclosed on Schedule 5.2 rule of the Disclosure ScheduleNew York Stock Exchange, or (iii) as agreed unless Parent shall otherwise agree in writing by the Purchaser(such agreement not to be unreasonably withheld, after the date hereofconditioned or delayed), and prior to the time the directors except as set forth in Section 5.1 of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):Company Disclosure Letter:
(a) the Company shall conduct its business and shall cause the businesses of its Subsidiaries to be conducted, only in, and the Company and its Subsidiaries shall be conducted only in not take any action except in, the ordinary course of business, consistent with past practice; and usual course and, to the extent consistent therewith, the Company shall use its reasonable best reasonable efforts to preserve intact the business organizations of the Company and its business organization intact Subsidiaries, and to maintain (i) the services of the present officers, employees and consultants of the Company and its Subsidiaries and (ii) its existing relations with customers, suppliers, employeescreditors, creditors business associates and others having business partners;dealings with it; and
(b) without limiting the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock generality of the Company beneficially owned by itforegoing, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: , and shall cause its Subsidiaries not to, take any of the following actions:
(i) declare, set aside amend its certificate of incorporation or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; by-laws;
(ii) issue, sell, pledge, dispose of or encumber any additional shares ofencumber, or securities convertible into authorize the issuance, sale, pledge, disposition or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquireencumbrance of, any shares of capital stock of any class or any other equity interest, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other equity interest in the Company, other than Company or any of its Subsidiaries (except for the issuance of shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; );
(iii) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock or any other equity interest, including any constructive or deemed distributions, and any distribution in connection with the adoption of a shareholders rights plan, or make any other payments to stockholders in their capacity as such, except that a wholly owned Subsidiary of the Company may declare and pay a dividend to its parent;
(iv) split, combine or reclassify any of its capital stock or any other equity interest or 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 any other equity interest;
(v) redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or any other equity interests;
(vi) (A) purchase, acquire, sell, transfer, lease, license, sell, mortgage, pledgeencumber or dispose of any material assets, dispose of, or encumber any assets other than the purchase, sale, rental and lease of vehicles in the ordinary and usual course of business and business, consistent with past practice; (B) acquire (by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof; (C) sell, transfer or dispose of any Subsidiary of the Company (by merger, consolidation, sale of stock or assets or otherwise); (D) incur or modify assume any indebtedness for borrowed money or other liability, other than in connection with the financing of vehicles in the ordinary and usual course of business and business, consistent with past practice; or (ivE) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of confidentiality agreements, standstill agreements or Company Material Contracts to which the Company or its material contracts Subsidiaries is a party or by which it is bound, or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except other than in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (iiF) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except other than in the ordinary course of business and business, consistent with past practice; (iiiG) other than ordinary course expense advances, make any material loans, advances or capital contributions to, or investments in, any other PersonPerson (other than to its wholly owned Subsidiaries in the ordinary course of business, consistent with past practice); (H) repurchase, redeem, repay or take any other action with respect to the issued and outstanding 11% Senior Subordinated Notes of the Company due May 2009 (the "Notes"), other than pursuant to Section 5.7; or (ivI) other than in the ordinary course of business, consistent with past practice, enter into any material commitment commitment, transaction, contract or transaction agreement, including any of the following entered into outside the ordinary course of business (includingi) any material capital expenditure, but (ii) any material contract or agreement outside the ordinary course of business, (iii) any contracts or agreements that cannot limited to, be cancelled on notice of thirty (30) days or less and (iv) any borrowing, capital expenditure noncompete agreements or purchase, sale or lease other agreements that limit the ability of assets or real estate)the Company to conduct any line of business;
(hvii) increase the compensation, severance or other benefits payable or to become payable to its directors, officers or employees, other than increases in salary or wages of employees of the Company shall or its Subsidiaries (who are not directors or executive officers of the Company) in accordance with past practice or pursuant to binding commitments made prior to the date hereof, or grant any severance or termination pay (iexcept payments required to be made under the Plans or other obligations existing on the date hereof in accordance with the terms of such obligations) change to, or enter into any employment or severance agreement with, any employee of the Company or any of the accounting methods used by it unless required by GAAP; its Subsidiaries, or (ii) other than related to a QEF Electionestablish, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAPadopt, enter into or amend any closing collective bargaining agreement, settle Plan, trust, fund, policy or arrangement for the benefit of any material Tax claim current or assessment former directors, officers or consent to any material Tax claim or assessment employees or any waiver of their beneficiaries, except, in each case, as may be required by law or as would not result in a material increase in the statute cost of limitations for any maintaining such material claim collective bargaining agreement, Plan, trust, fund, policy or assessmentarrangement;
(iviii) the Company shall not pay, repurchase, discharge or satisfy any of its material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and business, consistent with past practice, or pursuant to contractual requirements existing on the date hereof, of claims, liabilities or obligations reflected or reserved against against, in, or contemplated by, the consolidated financial statements (or the notes thereto) of the CompanyCompany and its Subsidiaries;
(jix) the Company shall not adopt a plan take any action to change accounting policies or procedures or any of complete or partial liquidationits methods of reporting income, dissolution, merger, consolidation, restructuring, recapitalization deductions or other reorganization items for income tax purposes, except as required by a change in GAAP, SEC position or applicable law occurring after the date hereof;
(x) approve or authorize any action to be submitted to the stockholders of the Company (for approval other than the Merger)pursuant to this Agreement;
(kxi) the Company shall not takemake or change any material election with respect to Taxes, agree or settle any material claim or assessment in respect of Taxes, or agree to an extension or waiver of the limitation period to any material claim or assessment in respect of Taxes;
(xii) voluntarily take, or commit to take, any action that would, would or is reasonably likely to, to result in any of the conditions to the Merger set forth in Article VII VI not being satisfied, satisfied or would make many any representation or warranty of the Company contained herein that is not qualified as to materiality inaccurate in any material respect, or any representation or warranty that is qualified as to materiality untrue in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company Company, Parent, PHH or Merger Sub to consummate the Merger Transactions, including the Merger, in accordance with the terms hereof or materially delay such consummation;; or
(lxiii) the Company shall not redeem the Rights agree, authorize or terminate, amend or otherwise modify the Rights Agreement prior announce to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do take any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingactions described in subsections (i) through (xii) above.
Appears in 2 contracts
Samples: Merger Agreement (Cendant Corp), Agreement and Plan of Merger (Cendant Corp)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors Effective Time, unless Purchaser shall otherwise agree in writing (which consent shall not be unreasonably withheld) or as otherwise expressly contemplated or permitted by this Agreement (including Section 5.1 of the Purchaser have been elected to Company Disclosure Schedule and shall constitute a majority Section 6.11 of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"Company Disclosure Schedule):
(a) The Company shall use reasonable efforts to conduct the business businesses and affairs of the Company shall be conducted and its subsidiaries only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(fb) except as set forth in Section 5.1 of the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, Disclosure Schedule and except in connection with the ordinary course of business and consistent with past practice;
(g) adoption by the Company shall of a shareholder rights plan that would not be applicable to, or adversely affect the transactions contemplated hereby among the parties to this Agreement, neither the Company nor any of its subsidiaries shall: (i) incur issue (except pursuant to employee and non-employee director stock options outstanding on the date hereof) sell, pledge, dispose of or assume encumber (or permit any long-term debtof its subsidiaries to issue, orsell, pledge, dispose of or encumber): (A) any additional shares of, or any options, warrants, conversion privileges or rights of any kind to acquire any shares of, any capital stock of the Company or any of its subsidiaries, or (B) any material assets of the Company or any of its subsidiaries except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assumeamend or propose to amend the certificate or articles of incorporation or bylaws or similar governing instruments of the Company or any of its subsidiaries; (iii) split, guaranteecombine or reclassify any outstanding Shares, endorse or declare, set aside or pay any dividend or other distribution, payable in cash, stock, property or otherwise become liable with respect to the Shares; (iv) redeem, purchase or responsible acquire, or offer to acquire (whether directlyor permit any of its subsidiaries to redeem, contingently purchase or acquire or offer to acquire) any Shares or other securities of the Company; or (v) enter into or modify any contract, agreement, commitment or arrangement with respect to any of the matters set forth in this Section 5.1(b);
(c) neither the Company nor any of its subsidiaries shall (i) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division or material assets thereof for aggregate consideration for all such acquisitions in excess of $25,000,000; (ii) incur any indebtedness for borrowed money or issue any debt securities except the obligations borrowing of any other Person, except working capital in the ordinary course of business and consistent with past practice; or (iii) enter into or materially modify any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) except as set forth in Section 5.1 of the Company Disclosure Schedule, or in the ordinary course of business in accordance with past practice, neither the Company nor any of its subsidiaries shall enter into or modify any employment, severance or similar agreements or arrangements with, or grant any bonuses, salary increases, severance or termination pay to, any officers, directors or employees;
(e) except as set forth in Section 5.1 of the Company Disclosure Schedule, or contemplated by this Agreement (including Section 2.6(a)), neither the Company nor any of its subsidiaries shall adopt or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or arrangement for the benefit or welfare of any officer, director or employee, other than (i) in the ordinary course expense advancesof business consistent with past practice for the benefit or welfare of any employee, make any loans(ii) for the purpose of accelerating the vesting of restricted stock and stock options, advances or capital contributions to, or investments in, any other Person; (iii) to the extent required by law or (iv) enter into with respect to new hires or promotions in the ordinary course of business;
(f) the Company shall use reasonable efforts (i) to cause its current insurance (or reinsurance) policies not to be cancelled or terminated; and (ii) to not permit any material commitment of the coverage thereunder to lapse, in any such case unless prior to or transaction promptly after such termination, cancellation or lapse, replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing;
(includingg) the Company shall use reasonable efforts, but not limited toand cause each of its subsidiaries to use reasonable efforts, any borrowingto keep substantially intact their respective business organizations and good will, capital expenditure or purchase, sale or lease keep available the services of assets or real estate);their officers and employees as a group and maintain their present relationships with suppliers and customers and others having business relationships with them; and
(h) the Company shall not (i) change any make no awards of the accounting methods used by it unless required by GAAP; restricted stock or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver grants of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingoptions.
Appears in 2 contracts
Samples: Merger Agreement (Quebecor Printing Inc), Agreement and Plan of Merger (World Color Press Inc /De/)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) prior to the Effective Time, unless Parent shall otherwise consent in writing or except as expressly contemplated by permitted or required pursuant to this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 including Section 5.1 of the Company Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"Letter):
(a) the business of The Company and the Company Subsidiaries shall be conducted (i) conduct their business only in the ordinary and usual course andof business and consistent with past practices and (ii) use their respective commercially reasonable efforts to maintain and preserve intact their respective business organizations, to maintain their significant beneficial business relationships with suppliers, contractors, distributors, customers, licensors, licensees and others having material business relationships with them, to retain the services of their present officers and key employees and to comply in all material respects with all applicable Laws and the requirements of all Contracts that are material to the Company and the Company Subsidiaries, taken as a whole, in each case, to the extent consistent therewithend that their goodwill and ongoing business shall be unimpaired at the Effective Time.
(b) Without limiting the generality of the foregoing Section 5.1(a), the Company shall use its best reasonable efforts not, and shall not permit any of the Company Subsidiaries to, do any of the following:
(i) other than in ordinary course of business consistent with past practice, purchase or otherwise acquire, sell, lease, transfer or dispose of or encumber any assets, rights or securities of the Company and the Company Subsidiaries that are material to preserve its business organization intact the Company and maintain its existing relations with customers, suppliers, employees, creditors and business partnersthe Company Subsidiaries taken as a whole;
(bii) acquire by merging or consolidating with or by purchasing all or a substantial equity interest in or a substantial portion of the Company will notassets of, directly or indirectlyby any other manner, (i) except upon exercise of stock options any business, corporation, partnership, association or other rights business organization or division thereof;
(iii) amend or propose to purchase shares amend its certificate of Company Common Stock pursuant to incorporation or bylaws or, in the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock case of the Company beneficially owned by itSubsidiaries, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational their respective constituent documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (iiv) declare, set aside or pay any dividend or other distribution payable in cash, stock capital stock, property or property otherwise with respect to any shares of its capital stock; ;
(iiv) 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, other than in connection with (x) the relinquishment of shares by former or current employees and directors of the Company in payment of withholding tax upon the vesting of Restricted Stock or (y) the cashless or net exercise of Options or Warrants;
(vi) split, combine, subdivide or reclassify its outstanding securities;
(vii) except for the Company Common Stock issuable upon the exercise or conversion of Options outstanding on the date hereof, the Notes or the Warrants, or pursuant to the Rights Agreement, and the vesting of Restricted Stock awards granted prior to the execution of this Agreement, issue, sell, pledgegrant, dispose of, pledge or otherwise encumber or authorize, propose or agree to the issuance, sale or disposition by the Company or any of or encumber the Company Subsidiaries of, any additional shares of, or securities convertible into or exchangeable for, or any options, warrants, calls, commitments or rights of any kind or any other agreements of any character to acquire, acquire any shares of of, or any securities convertible into or exchangeable for any shares of, its capital stock of any class, or any voting securities or equity interests or any other securities in respect of, in lieu of, or in substitution for any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt its capital stock outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(dviii) incur any indebtedness for borrowed money (other than trade payables) or guarantee any such indebtedness or enter into a “keep well” or similar agreement or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company shall not: or any Company Subsidiaries;
(iix) grant except as required by Law or in order to replace any key employee whose employment is terminated with the Company or a Company Subsidiary after the date hereof (but any increase in compensation paid to the employee who replaces such departed employee shall not cause the total compensation payable to be paid to the replacement employee to exceed the total compensation paid to the departed employee), (A) grant or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant increase any severance or termination pay to any officercurrent or former director, director executive officer or employee of the CompanyCompany or any Company Subsidiary, (B) execute any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any such director, executive officer or employee of the Company or any Company Subsidiary, (C) increase the benefits payable under any existing severance or termination pay policies or employment agreements, (D) increase the compensation, bonus or other benefits of current or former directors, executive officers or employees of the Company or any Company Subsidiary, (E) adopt or establish any new employee benefit plan or amend in any material respect any existing employee benefit plan, (F) provide any material benefit to a current or former director, executive officer or employee of the Company or any Company Subsidiary not required by any existing agreement or employee benefit plan, or (G) take any action that would result in its incurring any obligation for any payments or benefits described in subsections (i), (ii) or (iii) of Section 3.10(h) (without regard to whether the Transactions are consummated) except to the extent required in a written contract or agreement in existence as of the date of this Agreement;
(ex) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except other than in the ordinary course of business and consistent with past practice, execute or amend (other than as required by existing employee benefit plans or employment agreements or by applicable Law) in any material respect any material employment, consulting, severance or indemnification agreement between the Company or any of the Company Subsidiaries and any of their respective directors, officers, agents, consultants or employees, or any collective bargaining agreement or other obligation to any labor organization or employee incurred or entered into by the Company or any of the Company Subsidiaries (other than as required by existing employee benefit plans or employment agreements, or in order to comply with Section 409A of the Code, or other applicable Law);
(fxi) make any changes in its reporting for taxes or accounting methods, principles or practices (or change an annual accounting period or the Company shall not permit Company’s fiscal year) other than as required by GAAP or applicable Law; change or rescind any insurance policy naming it as a beneficiary Tax election; make any change to its method of reporting income, deductions, or a loss payable payee to be cancelled other Tax items for Tax purposes; settle or terminated without notice to the Purchaser, except in compromise any Tax liability or enter into any transaction with an affiliate outside the ordinary course of business and consistent with past practiceif such transaction would give rise to a material tax liability;
(gxii) settle, compromise or otherwise resolve any litigation or other legal proceedings material to the Company shall not (i) incur and the Company Subsidiaries taken as a whole or assume as would result in any long-term debt, or, except liability in excess of the amount reserved therefor or reflected on the balance sheets included in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)Company Financial Statements;
(hxiii) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Electionpay, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreementdischarge, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or Liens, obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)) involving more than $250,000 individually or $1,000,000 in the aggregate, other than which are not reserved for or reflected on the payment, discharge balance sheets included in the Company Financial Statements or satisfaction incurred since the date of any such claims, liabilities or obligations, financial statements in the ordinary course of business and consistent with past practice, other than fees and expenses of advisors or claims, liabilities or obligations reflected or reserved against in, or other transaction costs related to this Agreement and the transactions contemplated by, the consolidated financial statements (or the notes thereto) of the Companyhereunder substantially as previously disclosed to Parent;
(jxiv) make or commit to make capital expenditures in excess of $100,000 individually or $500,000 in the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger)aggregate;
(kxv) enter into any agreement, arrangement or commitment that materially limits or otherwise materially restricts the Company shall not takeor any Company Subsidiary, or agree to commit to take, any action that would, or is would reasonably likely be expected to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, after the Effective Time, materially limit or restrict the Parent or any of its Subsidiaries or any of their respective affiliates or any successor thereto, from engaging or competing in any line of business in which it is currently engaged or in any geographic area material to the business or operations of Parent or any of its Subsidiaries;
(xvi) enter into any lease or sublease of real property (whether as lessor, sublessor, lessee or sublessee) or modify, amend, terminate or fail to exercise any right to renew any lease or sublease of real property;
(xvii) (A) enter into, terminate or amend any Material Contract that is material to the Company and the Company Subsidiaries (taken as a whole), (B) enter into any Contract that would materially impair be breached by, or require the ability consent of any third party in order to continue in full force following consummation of the Transactions, or (C) enter into any Contract with any third party that grants such third party any rights upon a change of control of the Company or that provides for any diminution of rights of the Company or the Company Subsidiaries upon a change of control of the Company or that can be terminated by such third party upon a change of control of the Company or (D) release any Person from prior to consummate the Merger its expiration, or modify or waive any provision of, any confidentiality, standstill or similar agreement entered into since January 1, 2006 in accordance connection with the terms hereof Company’s review of strategic alternatives, or materially delay such consummation;
(lE) exempt any Person from the Company shall not redeem definition of “Acquiring Person” in the Rights Agreement or terminate, amend or otherwise modify the Rights Agreement prior to the consummation in any manner except as contemplated by Section 3.19;
(xviii) create any subsidiary of the Offer unless required Company or a Company Subsidiary, other than the Company Subsidiaries;
(xix) engage in any business or business activity other than the business and the business activities currently conducted;
(xx) fail to do use commercially reasonable efforts to keep in full force and effect all material insurance policies maintained by the Company and the Company Subsidiaries, other than such policies that expire by their terms (in which event the Company will use commercially reasonable efforts so by order that they will be renewed or replaced) or changes to such policies made in the ordinary course of a court of competent jurisdictionbusiness; and
(mxxi) except as permitted under Sections 5.1(b)(i) and (ii), make any investment (by contribution of capital, property transfers, purchase of securities or otherwise) in, or loan or advance to, any Person, other than (A) travel and similar advances to its employees or (B) to a direct or indirect wholly-owned Company Subsidiary, in each of (A) and (B) in the Company shall not enter into an agreement, contract, commitment ordinary course of business; or
(xxii) agree or arrangement commit to do take any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingactions precluded by Section 5.1(b).
Appears in 2 contracts
Samples: Merger Agreement (Pfizer Inc), Merger Agreement (Encysive Pharmaceuticals Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees on behalf of itself and its Subsidiaries that, during the period (hereafter, the “Interim Period”) from the date of this Agreement to the earliest of (i) except such time as expressly contemplated by this Agreement, the Option Agreement designees of Purchaser or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall Merger Sub first constitute at least a majority of the Company Board of Directors pursuant to Section 1.3 1.4(a), (the "Appointment Date"):
(aii) the business Effective Time, and (iii) the termination of this Agreement in accordance with Article VII, unless Purchaser and Merger Sub shall otherwise consent in writing, the businesses of the Company and its Subsidiaries shall be conducted only in the ordinary and usual course andof business consistent with past practice. Without limiting the generality of the foregoing, to except as (x) expressly contemplated by this Agreement or (y) set forth on Section 5.1 of the extent consistent therewithCompany Disclosure Schedule, during the Interim Period, the Company shall use not, and shall not permit any of its best reasonable efforts to preserve Subsidiaries to, without the prior written consent of Purchaser and Merger Sub, do any of the following:
(a) amend its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnersCertificate of Incorporation or By-Laws or any material term of any outstanding security issued by the Company;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; stock (other than dividends paid by wholly-owned Subsidiaries of the Company to the Company or another wholly-owned Subsidiary of the Company), (ii) other than pursuant to the exercise of the Company’s repurchase rights with respect to unvested shares held by individuals terminating employment or service with the Company or any Subsidiary, redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other securities, (iii) issue, sell, pledge, dispose of or encumber any additional (A) shares ofof its capital stock, or (B) securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or (C) other securities of the CompanyCompany or any of its Subsidiaries, other than as described in Section 4.3 of the Company Disclosure Schedule, except for the issuance of shares of Company Common Stock reserved for issuance on the date hereof (x) pursuant to the exercise of Options currently outstanding options and related securities under the Company’s Option Plans and the acceleration of options and related securities under the Company’s Option Plans as contemplated by existing plans and agreements, and (y) upon conversions, if any, of the Company’s 3.25% Convertible Senior Debentures Due 2034 issued and outstanding under that certain Indenture, dated as of June 1, 2004, between the Company and U.S. Bank National Association, as trustee or Warrants (iv) split, combine or conversion reclassify any of Voting Debt its outstanding on capital stock or issue or authorize or propose the issuance of any of other securities in respect of, in lieu of or in substitution for, shares of its capital stock;
(c) acquire or agree to acquire (i) by merging or consolidating with, or by purchasing a substantial portion of the equity interests of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (ii) any assets, including real estate, except, with respect to clause (ii) above, (A) non-exclusive licenses of IP in the ordinary course of business consistent with past practice, (B) leasehold interests, leasehold improvements, equipment, fixtures, initial inventory, supplies and certain other assets related to six new store openings, but only to the extent required to be made under binding commitments in effect as of the date hereof; hereof (iiithe “Committed Stores”), and (C) purchases of inventory, equipment and supplies in the ordinary course of business consistent with past practice;
(d) except in the ordinary course of business consistent with past practice, amend, enter into or terminate any Company Material Contract, or waive, release or assign any material rights or claims thereunder;
(e) transfer, lease, license, sell, mortgage, pledge, dispose of, encumber or encumber subject to any Lien any property or assets or cease to operate any assets, other than (i) sales of excess or obsolete assets, (ii) sales of inventory in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness (iii) licenses or other liability, other than dispositions of non-material IP in the ordinary and usual course of business and consistent with past practice; or course, (iv) redeemdispositions (including assignments and or subletting) of leasehold interests, purchase together with leasehold improvements, equipment, fixtures, inventory, supplies, and related assets, if any, of stores that are closed or otherwise acquire directly or indirectly any proposed to be closed as of its capital stockthe date hereof, and (v) other sales of assets not to exceed $500,000 in the aggregate;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any newenter into, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into terminate any employment or severance agreement with or, except as required to comply with applicable law or in accordance with the existing written policies obligations of the CompanyCompany or any of its Subsidiaries, grant any severance or termination pay to to, any officer, officer or director or employee of the CompanyCompany or any of its Subsidiaries or (ii) hire or agree to hire any new or additional officers at the Vice President level or above;
(eg) except (i) as required to comply with applicable law, (ii) in accordance with the existing obligations of the Company shall not modifyor any of its Subsidiaries or (iii) as required by Section 2.7 of this Agreement, (A) adopt, enter into, terminate, amend or terminate increase the amount or accelerate the payment or vesting of any benefit or award or amount payable under any Employee Plan or other arrangement for the current or future benefit or welfare of its material contracts any director, officer or waiveemployee (other than, release in the case of employees who are not officers or assign any material rights or claimsdirectors, except in the ordinary course of business and consistent with past practice;
), (fB) increase in any manner the Company shall not permit compensation or fringe benefits of, or pay any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaserbonus to, except any director or, other than in the ordinary course of business and consistent with past practice, officer or other employee, (C) other than benefits accrued through the date hereof and other than in the ordinary course of business for employees other than officers or directors of the Company, pay any benefit not provided for under any Employee Plan, (D) other than bonuses earned through the date hereof and other than in the ordinary course of business consistent with past practice for employees other than officers and directors, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Employee Plan; provided, that there shall be no grant or award to any Person of stock options, restricted stock, stock appreciation rights, stock based or stock related awards, performance units, units of phantom stock or restricted stock, or any removal of existing restrictions in any Employee Plan or agreements or awards made thereunder, or (E) take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or arrangement or Employee Plan;
(gh) the Company shall not (i) incur or assume any long-term debtindebtedness, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not other than normal fluctuations consistent with past practice; practice in the Company’s Bank Credit Agreement, (ii) incur or modify any material indebtedness or other liability, (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; practice or (iiiiv) other than except for advances or prepayments in the ordinary course expense advancesof business in amounts consistent with past practice, make any loans, advances or capital contributions to, or investments in, any other Person; Person (other than customary loans or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estateadvances to employees in accordance with past practice);
(h) the Company shall not (i) change any accounting policies or procedures (including procedures with respect to reserves, revenue recognition, payments of the accounting methods accounts payable and collection of accounts receivable) used by it unless required by a change in applicable law or GAAP; or (ii) , other than related the change in inventory valuation method disclosed in the footnotes to a QEF Electionfinancial statements contained in the 2006 Draft Form 10-K;
(j) make any change to any of its tax accounting principles or practices with respect to Taxes of the Company or any of its Subsidiaries;
(k) make any Tax election or change in any Tax election, make amend any material Tax electionReturns or, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAPsubject to Section 5.1(l) below, enter into any closing agreement, settle settlement or compromise of any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver liability of the statute of limitations for any such material claim Company or assessmentits Subsidiaries;
(il) the Company shall not pay, discharge discharge, satisfy, settle or satisfy compromise any claimsclaim, liabilities or obligations litigation, liability, obligation (absolute, accrued, asserted or unasserted, contingent or otherwise) or any legal proceeding (each, a “Claim”), except for any settlement or compromise (i) involving any Claim that has been reserved against in accordance with GAAP on the balance sheet (or footnotes thereto) in the 2006 Draft Form 10-K in an amount not to exceed the aggregate reserve relating to all such Claims, (ii) any payment, discharge, settlement, satisfaction or compromise of any Claim in accordance with Section 5.15 of this Agreement or (iii) any other Claim up to an aggregate maximum of $1,000,000, including, in the case of clauses (i) and (iii), all fees, costs and expenses associated therewith but excluding from such amounts any contribution from any insurance company or other parties to the litigation;
(m) except as required to comply with applicable law, enter into any negotiation with respect to, or adopt or amend in any respect, any collective bargaining agreement;
(n) enter into any new material agreement or arrangement with any of its officers, directors, employees or any “affiliate” or “associate” of any of its officers or directors (as such terms are defined in Rule 405 under the Securities Act);
(o) enter into any agreement, arrangement or contract to allocate, share or otherwise indemnify for Taxes;
(p) enter into or consummate any sale/leaseback agreement or arrangement;
(q) make, authorize or agree to make any capital expenditures other than pursuant to the capital expenditure budget agreed upon by the Purchaser and the Company and included as Schedule 5.1(q) hereto;
(r) enter into an agreement containing any provision or covenant limiting the ability of the Company or any of its Subsidiaries with respect to (i) selling any products or services of or to any other Person, (ii) engaging in any line of business, (iii) competing with or obtaining the products or services of any Person or limiting the ability of any Person to provide products or services to the Company or any of its Subsidiaries or (iv) selecting, opening or operating any store in any geographical area or location;
(s) terminate or fail to renew any Permit (beyond any applicable cure period) that is material to the conduct of the businesses of the Company or any of its Subsidiaries;
(t) revalue in any material respect any of its assets, including writing-down the value of inventory or writing-off notes or accounts receivable, other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practicepractice or as otherwise required by GAAP, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, and except as disclosed in the consolidated footnotes to the financial statements (or contained in the notes thereto) Draft 2006 Form 10-K related to revaluation of inventory under the Companycost valuation method;
(ju) fail to pay any Taxes or other material debts when due (without giving effect to any grace periods) other than a reserved claim described in Section 5.1(l) above;
(v) fail to maintain in full force and effect all self-insurance and insurance, as the case may be, currently in effect, provided that the Company shall not adopt a plan be deemed to be in breach of complete this covenant if the failure to maintain any particular policy of insurance would not reasonably be expected to have, individually or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or in the aggregate with any other reorganization of policy the Company (other than the Merger)fails to maintain, a Material Adverse Effect;
(kw) fail to make in a timely manner any and all filings with the Company shall SEC required to be made under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder or any filing required under applicable law, excluding Forms 3 and 4 where the failure to so timely file will not take, or agree to commit to take, any action that would, or is reasonably likely to, result in a Material Adverse Effect;
(x) except for the shortest allowable extensions or renewals of existing Real Property Leases that are scheduled to expire during the Interim Period as to same, (i) amend, extend, renew, otherwise modify or terminate or permit to expire any of the conditions to the Merger set forth in Article VII not being satisfiedReal Property Leases, (ii) enter into any new Real Property Lease or would make many representation or warranty of the Company contained herein inaccurate in (iii) open any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummationnew stores;
(ly) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingforegoing paragraphs (a)-(x) of this Section 5.1; and
(z) take any action or omit to take any action that would, or is reasonably likely to result in any of its representations and warranties contained in this Agreement becoming untrue, or in any of the conditions to the Merger set forth in Article VI of this Agreement not being satisfied.
Appears in 2 contracts
Samples: Merger Agreement (Whole Foods Market Inc), Merger Agreement (Wild Oats Markets Inc)
Conduct of Business by the Company Pending the Merger. (a) The Company covenants and agrees thatthat between the date of this Agreement and the Effective Time, unless Parent shall otherwise agree in writing (and except as set forth in Section 5.1 of the Company Disclosure Letter or as otherwise expressly contemplated, permitted or required by this Agreement), the Company shall and shall cause each of its Subsidiaries to use commercially reasonable efforts to, (i) except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by itexistence in good standing under applicable Law, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant subject to the exercise of Options restrictions and exceptions set forth in Section 5.1(b) or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transferelsewhere in this Agreement, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than conduct its business and operations in the ordinary and usual course of business and in a manner consistent with past practice, or incur or modify any indebtedness or other liability, other than prior practice (it being understood that the continuation of the process improvement initiatives set forth in Section 5.1 of the Company Disclosure Letter shall be considered to be in the ordinary and usual course of business), and (iii) preserve substantially intact its business organizations, to keep available the services of its current officers and consistent employees and to preserve the current relationships of the Company and its Subsidiaries with past practice; customers, suppliers, distributors and other Persons with which the Company or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its Subsidiaries has business relations that are material to the Company.
(b) Without limiting the foregoing, the Company covenants and agrees that between the date of this Agreement and the Effective Time, the Company shall not and shall cause each of its Subsidiaries not to (except as expressly contemplated, permitted or required by this Agreement, as set forth in the applicable subsection of Section 5.1(b) of the Company Disclosure Letter or with the prior written approval of Parent, such approval not to be unreasonably withheld or delayed):
(i) declare, set aside, make or pay any dividends or other distributions (whether in cash, stock or property) in respect of any of its or its Subsidiaries’ capital stock;
(dii) adjust, split, combine or reclassify any of its capital stock or that of its Subsidiaries or 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 that of its Subsidiaries;
(iii) repurchase, redeem or otherwise acquire or offer to repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock, capital stock or interests in any of its Subsidiaries or any Company Stock Rights or Subsidiary Stock Rights (other than (A) the withholding of shares of Company shall not: Common Stock to satisfy tax obligations with respect to awards granted pursuant to the Company Equity Plans and (iB) grant any increase in the compensation payable or to become payable acquisition by the Company to of Company Common Stock in connection with the forfeiture of awards granted under Company Equity Plans);
(iv) issue, deliver or sell any shares of its capital stock, capital stock or interests in any of its executive officers; Subsidiaries or Company Stock Rights or Subsidiary Stock Rights, other than the issuance of shares of Company Common Stock upon the settlement of Restricted Share Units or vesting of Restricted Shares outstanding as of the date of this Agreement in accordance with the terms thereof;
(ii)(A) adopt any new, or (Bv) amend or otherwise increase, change the Company Certificate of Incorporation or accelerate the payment Company Bylaws or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies equivalent organizational documents of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible ’s Subsidiaries (whether directlyby merger, contingently consolidation or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) purchase an equity interest in any Person or any division or business thereof, (ii) purchase the assets of any Person or any division or business thereof if the aggregate amount of the consideration paid or transferred by the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction and its Subsidiaries in connection with such purchase of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is assets would reasonably likely be expected to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Railamerica Inc /De), Merger Agreement (Genesee & Wyoming Inc)
Conduct of Business by the Company Pending the Merger. (a) The Company covenants and agrees thatthat between the date of this Agreement and the Effective Time, unless Parent shall otherwise agree in writing (and except as set forth in Section 5.1 of the Company Disclosure Letter or as otherwise expressly contemplated, permitted or required by this Agreement), the Company shall, (i) except as expressly contemplated by maintain its existence in good standing under applicable Law, (ii) maintain its existing insurance coverage, including its clinical trial insurance coverage, (iii) subject to the restrictions and exceptions set forth in Section 5.1(b) or elsewhere in this Agreement, conduct its business and operations in the Option Agreement or ordinary course of business and in a manner consistent with prior practice, (iv) use its reasonable best efforts to preserve substantially intact its business organizations, to keep available whenever possible, the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 services of its current officers and employees and to preserve the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business current relationships of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employeesresearch and clinical collaborators, creditors licensees and other Persons with which the Company has business partners;relations and shall promptly notify Parent if the Company receives written notice of resignation of any of its officers or employees and (v) comply in all material respects with all applicable Laws wherever its business is conducted, including the timely filing of all reports, forms or other documents with the SEC required pursuant to the Securities Act or the Exchange Act.
(b) Without limiting the foregoing, the Company will notcovenants and agrees that between the date of this Agreement and the Effective Time, directly the Company shall not (except as expressly contemplated, permitted or indirectlyrequired by this Agreement, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding as set forth on the date hereof or upon exercise applicable subsection of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock Section 5.1(b) of the Company beneficially owned by it, (ii) amend its Restated Certificate Disclosure Letter or with the prior written approval of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: Parent): (i) declare, set aside aside, make or pay any dividend dividends or other distribution payable distributions (whether in cash, stock or property property) in respect of any of its capital stock or enter into any contract or agreement with respect to the voting of any its capital stock; (ii) issueadjust, sellsplit, pledgecombine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, dispose in lieu of or encumber any additional in substitution for shares ofof its capital stock; (iii) repurchase, redeem or otherwise acquire, or securities convertible into offer to repurchase, redeem or exchangeable forotherwise acquire, directly or options, warrants, calls, commitments or rights of any kind to acquireindirectly, any shares of its capital stock of or any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereofRights; (iiiiv) transferissue, lease, license, deliver or sell, mortgage, pledge, dispose of, pledge or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any shares of its capital stock;
(d) the stock or any Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officersStock Rights; (ii)(Av) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, take any action that would, or is would reasonably likely to, be expected to result in any of the conditions to the Merger set forth in Article VII VI not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, satisfied or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;; (vi) amend the Company Certificate of Incorporation or the Company By-laws; (vii) incur, create, assume or otherwise become liable for any indebtedness for borrowed money, other than short-term borrowings under existing lines of credit incurred in the ordinary course of business consistent
(lA) make any material Tax election not consistent with prior practice, (B) settle or compromise any material income Tax liability (C) fail to file any material Tax Return when due, (D) fail to cause such Tax Returns when filed to be complete and accurate in all material respects, (E) amend any material Tax Returns or file claims for material Tax refunds, (F) enter into a material closing agreement, surrender in writing any right to claim a material Tax refund, offset or other reduction in Tax Liability, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company; (xvi) enter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Company Material Contract, any material Company Intellectual Property Contract and any contract related to leased real property to which the Company shall not redeem is a party; (xvii) institute, settle or compromise any suit, action or proceeding pending or threatened before any arbitrator, court or other Governmental Entity involving the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation payment of the Offer unless required to do so monetary damages by order of a court of competent jurisdiction; and
(m) the Company shall not of any amount exceeding $125,000; (xviii) enter into an any material agreement, contractagreement in principle, commitment letter of intent, memorandum of understanding or arrangement similar contract or agreement with respect to do any joint venture, strategic partnership or alliance; or (xix) agree to take any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingactions described in this Section 5.1(b).
Appears in 2 contracts
Samples: Merger Agreement (Trubion Pharmaceuticals, Inc), Merger Agreement (Emergent BioSolutions Inc.)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) between the date of this Agreement and the Effective Time, except as expressly contemplated by set forth in this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 Section 5.01 of the Company Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business businesses of the Company and its Subsidiaries shall be conducted only in the ordinary Ordinary Course, and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its substantially intact the business organization intact of the Company and maintain its existing relations Subsidiaries and to preserve the current relationships of the Company and its Subsidiaries with customers, suppliers, employees, creditors suppliers and business partners;
(b) other Persons with which the Company will notor any of its Subsidiaries has significant business relations. Except as expressly set forth in this Agreement or set forth in Section 5.01 of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Parent, which consent shall not be unreasonably withheld or delayed:
(ia) except upon exercise of stock options amend or other rights to purchase shares of otherwise change the Company Common Stock pursuant to the Option Plans outstanding on the date hereof Charter or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock Bylaws of the Company beneficially owned by it, (ii) amend its Restated Certificate or any equivalent organizational documents of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify any Significant Subsidiaries of the outstanding SharesCompany;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iib) issue, sell, pledge, dispose of or encumber any additional shares of, grant or securities convertible into or exchangeable forencumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any shares of any class of capital stock of the Company or any of its Subsidiaries, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock, or any other ownership interest, of the Company or any of its Subsidiaries;
(c) except to the extent necessary to maintain its status as a REIT (provided that any dividend or distribution materially in excess of dividends or distributions paid prior to the date hereof shall require prior consultation with Parent), declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock of except for (i) distributions by the Company or any class wholly-owned Subsidiary of the Company, other than shares Company to the Company or another wholly-owned Subsidiary of the Company and (ii) monthly dividends payable quarterly of $0.0592 or quarterly dividends of $0.1776 per share of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(fd) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock except in the Ordinary Course;
(e) (i) acquire any corporation, partnership, other business organization or any division thereof in any transaction or series of related transactions (including by merger, consolidation or acquisition of stock or assets or any other business combination) other than acquisitions pursuant to agreements or commitments in effect as of the date hereof which agreements are listed on Schedule 5.01 hereto; (ii) acquire any asset having a value in excess of $500,000 without first providing Parent five (5) Business Days’ prior notice and consulting with Parent with respect thereto and acquire any asset with a value or for consideration in excess of $5,000,000 or in excess of the Aggregate Limit in the aggregate, other than acquisitions pursuant to contracts or agreements in effect as of the date of this Agreement (including by merger, consolidation, or acquisition of stock or assets or any other business combination) and provided that the agreements with respect to any asset acquisitions entered into as permitted under this clause (i) are on an arm’s-length basis; (iii) except for borrowings under that certain Amended and Restated Credit Agreement dated as of August 23, 2005 by and among the Company (and various CNL entities) and Bank of America, N.A. and various other financial institutions in an amount not to exceed $25,000,000 and indebtedness for borrowed money assumed in connection with any asset acquisition permitted under Section 5.01(e)(ii) incur 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, or make any loans or advances, or grant any security interest in any of its assets; (iv) enter into or amend or modify in any material respect or terminate any material contract or agreement other than (1) renewals or extensions of Company Leases on terms substantially equivalent to such Company Lease so renewed or extended, (2) leases with respect to real property entered into by the Company or a Subsidiary of the Company as landlord in connection with any asset acquisition permitted under Section 5.02(e)(ii) (provided that, in connection with any asset acquisition permitted under such Section without the prior consent of Parent, the Company shall not permit also have consulted with Parent on such leases during the five (5) Business Day period referred to therein), (3) any insurance policy naming it as a beneficiary other lease of real property entered into by the Company or a loss payable payee Subsidiary of the Company as landlord provided that the lease does not represent in excess of 10% of the gross leasable area with respect thereto and (4) any other material contract other than a lease provided that such contract is terminable by the Company or one of its Subsidiaries on no more than 90 days’ notice without the payment of a penalty or premium, and provided that any material contract or amendment or modification of any material contract under any of clauses (1) through (4) is on an arm’s-length basis; or (v) authorize, or make any commitment with respect to be cancelled or terminated without notice to make any single capital expenditure that is in excess of $5,000,000 or capital expenditures that are, in the Purchaseraggregate, in excess of the Aggregate Limit, except for capital expenditures in accordance with and on the ordinary course timetable contemplated by the capital budget of business and consistent with past practicethe Company attached hereto as Schedule 5.01(e);
(f) voluntarily create or incur any Lien material to it or any of its Subsidiaries on any of its assets or any assets of its Subsidiaries having a value in excess of $500,000;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, to or investments in, in any Person (other Person; than between itself and any of its direct or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estateindirect wholly-owned Subsidiaries);
(h) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $5,000,000 or settle any litigation or other proceedings before a Governmental Authority or arbitrator or make any payments in respect thereof in excess of $100,000 for any individual litigation or proceeding or $750,000 in the Company aggregate (it being understood that this clause shall not apply to any fees and expenses paid in connection with the defense of any such litigation or proceeding);
(i) change transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, including (with respect to assets of the accounting methods used by it unless required by GAAP; Company) capital stock of any of its Subsidiaries, having a value in excess of $500,000 individually or (ii) $1,500,000 in the aggregate other than related pursuant to agreements or contracts in effect as of the date of this Agreement and provided that all contracts entered into as permitted under this clause (i) shall be on an arm’s-length basis;
(j) take any material action with respect to accounting policies or procedures;
(k) enter into an agreement with respect to any merger, consolidation, liquidation or business combination, or any acquisition or disposition of all or substantially all of the assets or securities of the Company or any of its Significant Subsidiaries;
(l) except to the extent reasonably necessary to maintain the Company’s status as a QEF ElectionREIT, make or rescind any material Tax election, change settle or compromise any material Tax election already made, adopt liability or make any material amendment to any Tax accounting method, change Return;
(m) enter into any material Prohibited Transaction (as defined in Section 857 of the Code);
(n) take any action (or fail to take any action) that would cause the Company to fail to qualify as a REIT;
(o) fail to timely file any Tax accounting method unless Returns that are required to be filed by GAAPthe Company or any Company Tax Subsidiary; or
(p) announce an intention, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend agreement or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of make a court of competent jurisdiction; and
(m) the Company shall not enter into an agreementcommitment, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants During the period from the date of this Agreement and agrees that, (i) except as expressly contemplated by continuing until the earlier of the termination of this Agreement, the Option Agreement or the Stockholders AgreementEffective Time, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only agrees to carry on its business in the usual, regular and ordinary course and usual course in substantially the same manner as previously conducted, to pay its debts and Taxes when due (subject to good faith disputes over such debts or Taxes), to pay or perform other obligations when due and, to the extent consistent therewithwith such business, the Company shall to use its best all reasonable efforts consistent with past practices and policies to preserve intact its present business organization intact organization, keep available the services of its present officers and maintain key employees and consultants and preserve its existing relations relationships with customers, suppliers, employeesdistributors, creditors licensors, licensees, and others having business partners;
(b) dealings with it, to the end that its goodwill and ongoing businesses would be unimpaired at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business of the Company. By way of amplification and not limitation, except as specifically contemplated by this Agreement or as specifically set forth in Section 5.01 of the Company will Disclosure Schedule, the Company shall not, between the date of this Agreement and the Effective Time, directly or indirectly, (i) except upon exercise of stock options do, or other rights propose to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtdo, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, following without the prior written consent of Parent (iiwhich shall not be unreasonably withheld or delayed):
(a) amend or otherwise change its Restated Certificate of Incorporation or Bylaws or similar equivalent organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iib) issue, sell, pledge, dispose of or encumber any additional shares of, grant, encumber, authorize or securities convertible into propose the issuance, sale, pledge, disposition, grant or exchangeable forencumbrance of any shares of its capital stock of any class, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of or any class other ownership interest (including, without limitation, any phantom interest), of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof except pursuant to the exercise terms of Options options, warrants or Warrants or conversion of Voting Debt preferred stock outstanding on the date hereof; of this Agreement;
(iiic) transfersell, lease, license, sell, mortgage, pledge, grant, encumber or otherwise dispose ofof any of its Assets which are material, individually or encumber any assets other than in the ordinary and usual course of business and consistent with past practiceaggregate, to its business;
(d) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, other than payable in the ordinary and usual course of business and consistent cash, stock, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock;
(de) split, combine, subdivide, redeem or reclassify any of its capital stock or issue or authorize the Company shall not: issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or purchase or otherwise acquire, directly or indirectly, any shares of its capital stock except from former employees, directors and consultants in accordance with agreements providing for the repurchase of shares in connection with any termination of service by such party;
(f) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest or any assets in any corporation, partnership, other business organization or any division thereof;
(g) institute or settle any Legal Proceeding;
(h) 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 obligations of any person, or make any loans or advances;
(i) grant authorize any increase capital expenditure in excess of $10,000, individually or in the aggregate;
(j) enter into any lease or contract for the purchase or sale of any property, real or personal;
(k) waive or release any material right or claim;
(l) increase, or agree to increase, the compensation payable payable, or to become payable by the Company payable, to any of its executive officers; (ii)(A) adopt any newofficers or employees, or (B) amend grant any severance or otherwise increasetermination pay to, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with orwith, any of its directors, officers or other employees, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other Company Benefit Plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; provided, however, that the foregoing provisions of this subsection shall not apply to any amendments to employee benefit plans described in Section 3(3) of ERISA that may be required by Law;
(m) accelerate, amend or change the period of exercisability or the vesting schedule of restricted stock or Company Options granted under the Stock Plan, any option plan, employee stock plan or other agreement or authorize cash payments in exchange for any Company Options granted under any of such plans except as specifically required by the terms of such plans or any such agreement or any related agreement in accordance with the existing written policies effect as of the Companydate of this Agreement and disclosed in the Company Disclosure Schedule;
(n) extend any offers of employment to potential employees, grant consultants or independent contractors or terminate any severance existing employment relationships;
(o) amend or termination pay terminate any Material Contract;
(p) enter into, amend or terminate any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.01;
(q) other than in the ordinary course of business consistent with past practice, enter into any licensing, distribution, OEM agreements, sponsorship, advertising, merchant program or other similar contracts, agreements or obligations;
(r) enter into any contract or agreement material to any officerthe business, director results of operations or employee financial condition of the Company;
(es) pay, discharge or satisfy any material claim, liability or obligation (absolute, accrued, asserted, unasserted, contingent or otherwise);
(t) take any action, with respect to accounting policies, principles or procedures;
(u) make or change any Tax or accounting election, change any annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the Company, surrender any right to claim refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company, or take any other action or omit to take any action that would have the effect of increasing the Tax liability of the Company shall not modifyor Parent;
(v) (i) sell, amend assign, lease, terminate, abandon, transfer, permit to be encumbered or terminate otherwise dispose of or grant any security interest in and to any item of the Company Intellectual Property, in whole or in part, (ii) grant any license with respect to any Company Intellectual Property, (iii) develop, create or invent any Intellectual Property jointly with any third party, or (iv) disclose, or allow to be disclosed, any Confidential Information, unless such Confidential Information is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof;
(w) make (or become obligated to make) any bonus payments to any of its material contracts officers or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practiceemployees;
(fx) revalue any of its assets, including writing down the value of inventory or writing off notes or accounts receivable;
(y) fail to maintain its equipment and other assets in good working condition and repair according to the standards it has maintained up to the date of this Agreement, subject only to ordinary wear and tear;
(z) take any action or fail to take any action that would reasonably be expected to cause there to be a Company shall not Material Adverse Effect;
(aa) permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practiceParent;
(gbb) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions towrite off as uncollectible, or investments in, establish any other Person; or (iv) enter into any material commitment or transaction (including, but not limited extraordinary reserve with respect to, any borrowingaccount receivable or other indebtedness in excess of $10,000 with respect to a single matter, capital expenditure or purchase, sale or lease in excess of assets or real estate);$25,000 in the aggregate; or
(hcc) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit in writing or otherwise to take, any action that wouldof the actions described in subsections (a) through (bb) above, or any action which is reasonably likely to, result in to make any of the conditions Company’s representations or warranties contained in this Agreement untrue or incorrect on the date made (to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, extent so limited) or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) except Except as expressly otherwise contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, hereof and prior to the time Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, the directors of the Purchaser have been elected to Company shall, and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):cause each Company Subsidiary to:
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than conduct their respective businesses in the ordinary and usual course of business and consistent with past practicepractice and continue to observe their obligations to comply with the requirements of all applicable Laws;
(b) not (i) amend or propose to amend the Articles of Incorporation or By-Laws of the Company or any material term of any outstanding security issued by, the Company, (ii) amend or incur propose to amend the Articles of Incorporation or modify By-Laws of any indebtedness Company Subsidiary or other liabilityany material term of any outstanding security issued by, other than any Company Subsidiary, (iii) split, combine or reclassify the Company Stock or otherwise change the capitalization or capital structure of the Company or any Company Subsidiary in any manner from the ordinary and usual course of business and consistent with past practice; way it existed on the date hereof, or (iv) redeemdeclare, purchase set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for cash distributions by a Company Subsidiary to the Company;
(c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of or otherwise cause to become outstanding, any additional shares of, or any options, warrants or rights of any kind to acquire directly any shares of Company Stock or indirectly capital stock of any Company Subsidiary or any debt or equity securities convertible into or exchangeable for Company Stock capital stock of its any Company Subsidiary or any units or other rights that are tied to Company Stock (e.g., restricted stock units or stock appreciation rights) or capital stockstock of any Company Subsidiary;
(d) the Company shall not: not (i) grant incur or become contingently liable with respect to any increase material Indebtedness for borrowed money other than (x) borrowings in the compensation payable ordinary course of business, or (y) borrowings to become payable refinance existing Indebtedness, (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of Company Common Stock or any options, warrants or rights to acquire any Company Stock or any security convertible into or exchangeable for Company Stock, except in accordance with certain Stock Restriction Agreements currently in effect by and between the Company and certain persons, (iii) except for budgeted capital expenditures related to equipment purchases and tenant improvements that have been previously disclosed to Parent, make any acquisition of any assets and expenditures for fixed or capital assets other than expenditures set forth on the Company Disclosure Letter (in each case, after consultation with Parent) or expenditures in the ordinary course of business which, in such cases of $100,000 or more in the aggregate, shall be on terms reasonably acceptable to Parent, (iv) sell, pledge, dispose of or encumber any assets or businesses other than sales of inventory and sales of assets in the ordinary course of business which, in such cases involving $100,000 or more in the aggregate, shall be on terms reasonably acceptable to Parent, or (v) enter into any contract, agreement, commitment or arrangement with respect to any of its executive officers; the foregoing;
(ii)(Ae) adopt use all commercially reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers, vendors and others having business relationships with them and not engage in any newaction, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement;
(Bf) not enter into or amend or otherwise increaseany employment, or accelerate the payment or vesting of the amounts payable or to become payable undercollective bargaining, any existing bonusseverance, incentive compensationretirement, deferred compensation, bonus, change of control, or special pay arrangement with respect to termination of employment, change in the terms of employment or other similar arrangements or agreements with any directors, officers or employees to increase the benefits provided or to provide additional or new benefits to any such person;
(g) not adopt, accelerate, enter into or amend any severance, bonus, profit sharing, compensation, stock option, stock purchase, insurance, pension, retirement retirement, deferred compensation, health care, retiree medical, change of control, employment or other employee benefit plan, agreement agreement, trust, fund or arrangement; arrangement for the benefit or (iii) enter into welfare of any employment employee or severance agreement with orretiree, except as required by the terms thereof or as required to comply with changes in accordance with applicable Law and not increase the existing written policies wages of the Companyany directors, grant any severance officers or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, employees except in the ordinary course of business and consistent with past practice;
(fh) the Company shall not permit any maintain with adequately capitalized insurance policy naming it companies insurance coverage for their assets and their businesses in such amounts and against such risks and losses as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and are consistent with past practice; and
(i) not enter into any Company Affiliated Transaction.
(j) not transfer to any third Person ownership of material Company Intellectual Property;
(gk) not change any method of accounting or accounting practice by the Company shall or any Company Subsidiary, except for any such change required by reason of a change in GAAP or with prior agreement with the Company’s auditor;
(l) not commence a lawsuit other than: (i) incur for the routine collection of bills; or assume (ii) in such cases where the Company in good faith determines that failure to commence a suit would result in a material impairment of a valuable aspect of the Company’s business, provided the Company consults with Parent prior to filing such suit;
(m) not extend an offer of employment to a candidate for an officer position of vice president or above or any long-term debtposition with annual compensation equal to or greater than $80,000 without prior consultation with Parent;
(n) not enter into any joint venture, orpartnership, limited liability company, or operating agreement with any Person;
(o) not acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association, or other business organization or division thereof, or otherwise acquire or agree to acquire any assets that are material, individually or in the aggregate, to the business of the Company;
(p) not breach, materially modify, materially amend, or terminate any of the Contracts, or waive, release, or assign any material rights or claims under any of the Contracts, except as expressly required by this Agreement or except in the ordinary course of business;
(q) not settle, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assumecompromise, guarantee, endorse or otherwise become liable or responsible (whether directlyterminate any litigation, contingently or otherwise) for the obligations of any other Personclaim, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions toinvestigation, or investments in, any other Person; or settlement negotiation;
(ivr) not enter into any material commitment contract that would require the Company or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease Company Subsidiary to expend a sum in excess of assets or real estate)$100,000;
(hs) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization recapitalization, or other reorganization of the Company (other than the Merger);
(kt) the Company shall not takepay or make any accrual or arrangement for payment of any pension, retirement allowance, or other employee benefit pursuant to any existing plan, agreement, or arrangement to any officer, director, or employee or pay or agree to commit pay or make any accrual or arrangement for payment to takeany officers, directors, or employees of Company of any amount relating to unused vacation days, except payments, arrangements, and accruals made in the ordinary course of business consistent with past practice or otherwise required by law or by the terms of a Company Plan;
(u) except as required or permitted under this Agreement, not knowingly take any action that would, would or is reasonably likely toto (i) make any representation or warranty of the Company contained herein inaccurate, (ii) result in any of the conditions to the Merger set forth in Article VII IX not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially (iii) impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdictionhereof; and
(mv) the Company shall not enter into an agreementauthorize, contractcommit, commitment or arrangement agree to do take any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingforegoing actions except as otherwise permitted by this Agreement.
Appears in 1 contract
Samples: Merger Agreement (Labor Ready Inc)
Conduct of Business by the Company Pending the Merger. 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 its terms (the “Pre-Closing Period”), except (1) as contemplated by any other provision of this Agreement, (2) as set forth in Section 5.01 of the Company Disclosure Schedule, (3) as required by applicable Law or (4) consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall, and shall cause each of the Company Subsidiaries to, (x) conduct the businesses of the Company and the Company Subsidiaries in the ordinary course of business and (y) use commercially reasonable efforts to preserve substantially intact the business organization of the Company and the Company Subsidiaries. The foregoing notwithstanding, except (1) as contemplated by any other provision of this Agreement, (2) as set forth in Section 5.01 of the Company Disclosure Schedule, (3) as required by applicable Law, or (4) consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed), the Company shall not and shall cause each Company Subsidiary not to, during the Pre-Closing Period, do any of the following:
(a) amend or otherwise change its certificate of incorporation, bylaws or other similar organizational documents;
(b) issue, grant, sell, dispose of, encumber (other than Permitted Liens), or authorize such issuance, grant, sale, disposition or encumbrance of, (i) Company Common Stock, Company Preferred Stock or Other Company Securities (except for the issuance of Shares issuable pursuant to Company Stock Options or Restricted Stock Units that are outstanding as expressly contemplated by this Agreementof the Reference Date and are disclosed on Section 3.02(c) of the Company Disclosure Schedule, the Option Agreement or the Stockholders Agreementin accordance with their terms, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business any material assets of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the or any Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claimsSubsidiary, except in the ordinary course of business or pursuant to existing Contracts;
(c) declare, authorize, establish a record date for, set aside, make or pay any dividend or other distribution, payable in cash, shares, property, a combination thereof or otherwise, with respect to any of its share capital, except for dividends or other distributions by any direct or indirect wholly-owned Company Subsidiary to the Company or any other direct or indirect wholly-owned Company Subsidiary;
(d) reclassify, combine, split, redeem, purchase or otherwise acquire, directly or indirectly, any share capital of the Company or any Company Subsidiary, other than (i) the acquisition by the Company of Company Stock Options and consistent Restricted Stock Units outstanding as of the Reference Date and listed on Section 3.02(c) of the Company Disclosure Schedule, and (ii) any “cashless exercise” or “net exercise” provision relating to any Company Stock Options outstanding as of the Reference Date and listed on Section 3.02(c) of the Company Disclosure Schedule or in connection with past practiceany required Tax withholding upon the exercise of Company Stock Options or the vesting of Restricted Stock Units, in each case, outstanding as of the Reference Date;
(e) acquire, directly or indirectly, whether by amalgamation, merger, consolidation, or acquisition of equity interests, assets or any other business combination, (i) all or substantially all of the equity interests or assets of any company, corporation, partnership, other business organization (or any division thereof) or other person, or (ii) with respect to any Franchisee that is not in default under a Franchise Agreement, any real property (including entering into any leases for real property) or any restaurants in an amount not to exceed $1,000,000 in the aggregate;
(f) sell, transfer, lease, license, sublicense, abandon or otherwise dispose of any of its material properties or assets (including capital stock of any Subsidiary of the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaserand intangible property), except in the ordinary course of business and consistent with past practice;
(g) the Company shall not other than (i) incur sales or assume any long-term debt, or, except other dispositions of properties or assets in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assumesales or other dispositions of properties or assets that are no longer used in the operations of the Company or any Company Subsidiary; provided, guaranteehowever, endorse that, notwithstanding anything in this Agreement to the contrary, neither the Company nor any of its Subsidiaries may sell or refranchise any restaurant;
(g) (i) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any Subsidiary of the Company or guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” or similar agreement to maintain any financial statement condition of another person (other than the Company or any wholly-owned Subsidiary of the Company) (collectively, “Indebtedness”), other than (A) intercompany Indebtedness between the Company and a Company Subsidiary or between Company Subsidiaries, and (B) Indebtedness incurred, assumed or otherwise become liable or responsible entered into under the Company’s existing credit facilities and in respect of letters of credit (whether directly, contingently or otherwise1) for the obligations of any other Person, except in the ordinary course of business as necessary to conduct the business and consistent with past practice; (iii2) other than ordinary course expense advancesas necessary to pay any fees and expenses related to the Transactions, including the Merger, or (ii) make any loans, advances loans or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (includingperson, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)other than to a Company Subsidiary;
(h) the Company shall not voluntarily (i) change terminate, amend, modify or waive material rights or material claims under any of the accounting methods used by it unless required by GAAP; Selected Contract, or (ii) enter into any Contract that would have been considered a Selected Contract if it had been entered into prior to the date of this Agreement, in each case, other than related in the ordinary course of business (provided, that in all cases the Company shall provide reasonable advance notice to, and reasonably consult with, Parent prior to taking any such actions described in this clause (h));
(i) make any capital expenditures, other than (i) cash capital expenditures in an amount not to exceed $6,000,000 during the fourth quarter of 2018, (ii) cash capital expenditures in an amount not to exceed $3,000,000 per quarter of 2019, (iii) any capital expenditures in respect of capital leases for store equipment and vehicles entered into in the ordinary course of business, or (iv) any other capital expenditures in an amount not to exceed, in the aggregate, $3,000,000;
(j) except as otherwise required under any Plan disclosed on Section 3.10(a) of the Company Disclosure Schedule in existence as of the date of this Agreement: (i) increase the compensation payable or to become payable or the benefits provided or to be provided to any current or former directors, officers, employees or independent contractors of the Company or of any Company Subsidiary, except for increases in base salary or base wage rate in the ordinary course of business to a QEF Electioncurrent employee whose total annualized cash compensation for 2018 is expected to be less than $100,000, (ii) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement, (iii) hire or terminate (other than for cause) any individual employed by the Company or any Company Subsidiary in the positions disclosed on Section 5.01(j)(iii) of the Company Disclosure Schedule, (iv) grant any retention, severance, Tax gross-up, Tax indemnity, reimbursement of Taxes or termination payments, rights and/or benefits to, or enter into any employment, bonus, change of control or severance agreement or other similar arrangement with, any current or former director, officer, employee or independent contractor of the Company or of any Company Subsidiary, (v) loan or advance any money or other property to any present or former director, officer, employee or independent contractor of the Company or any Company Subsidiary, or (vi) establish, adopt, enter into, terminate or amend any Plan, or establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement, for the benefit of any current or former director, officer, independent contractor or employee of the Company or any Company Subsidiary;
(k) implement any reduction-in-force or other mass termination program that would implicate WARN or any similar state or local law;
(l) enter into any collective bargaining agreement or any other agreement with a labor union or other labor organization, or recognize or certify any labor union or other labor organization as the bargaining representative for any group of employees of the Company or any Company Subsidiary, unless required by Law;
(m) fail to maintain in full force and effect the existing insurance policies (or alternative policies with comparable terms and conditions) covering the Company and the Company Subsidiaries and their respective properties, assets and businesses;
(n) settle any Action other than (i) settlements involving (x) payments by the Company of not more than $1,000,000 in the aggregate (net of insurance proceeds), and (y) third party indemnification recoveries payable to the Company or any of the Company Subsidiaries in connection with such settlement, or (ii) subject to Section 6.11, stockholder litigation arising out of, or related to, the Transactions;
(o) make any material change in accounting methods, principles or practices by the Company or any Company Subsidiary materially affecting the consolidated assets, liabilities or results of operations of the Company, except as required (i) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (ii) by Law;
(p) make any material change to the terms of the Company’s or any of the Company Subsidiaries’ system-wide policies or procedures which would alter the current status quo with respect to (i) franchisee royalty or other fees and charges, or maintenance of the funds administered by or paid to or by the Company or any Company Subsidiary by or on behalf of any Franchisee, or (ii) franchisee incentives or franchisee economic assistance, in each case, other than in the ordinary course of business (provided, that in all cases the Company shall provide reasonable advance notice to, and reasonably consult with, Parent prior to any taking such material actions in this clause (p));
(q) make, change or revoke any material Tax election, file any amended material Tax Return, adopt or change any material method of Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAPaccounting, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or non-U.S. law) with respect to any material amount of Taxes or settle or compromise any material Tax liability, surrender any right to claim or assessment a refund of a material amount of Taxes, seek any Tax ruling from any taxing authority in respect of a material Tax matter, or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction pursuant to an extension of any such claims, liabilities or obligations, time to file Tax Returns obtained in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;business); or
(jr) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention agreement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Bojangles', Inc.)
Conduct of Business by the Company Pending the Merger. The During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company covenants and agrees that, (i) unless Parent shall otherwise agree in writing, the Company shall 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; and the Company shall use reasonable commercial efforts to preserve substantially intact the business organization of the Company , to keep available the services of the present officers, employees, agents and consultants of the Company and to 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 expressly contemplated by this Agreement, each of the Option Company shall not, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Stockholders AgreementEffective Time, directly or indirectly do, or (ii) as disclosed on Schedule 5.2 propose to do, any of the Disclosure Schedule, or (iii) as agreed in writing by following without the Purchaser, after the date hereof, and prior to the time the directors written consent of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):Parent:
(a) amend or otherwise change the business Company's Certificate of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnersIncorporation or Bylaws;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares ofencumber, or securities convertible into authorize the issuance, sale, pledge, disposition or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquireencumbrance of, any shares of capital stock of any class class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including, without limitation, any phantom interest) in the CompanyCompany or any of its Affiliates, other than except for the issuance of shares of Company Common Stock reserved for issuance on the date hereof pursuant to issuable upon the exercise of the Stock Options or and Warrants or conversion and other commitments listed in Section 2.4 of Voting Debt outstanding on the date hereof; Company Disclosure Schedule;
(iiic) sell, transfer, leaselease to others or otherwise dispose of or subject to any Encumbrance any material assets or properties of the Company or purchase, license, sell, mortgage, pledge, dispose of, lease from others or encumber otherwise acquire any material assets other than or properties (except for (i) purchases or sales of assets in the ordinary and usual course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or incur worthless assets, and (iii) purchases or modify sales of immaterial assets not in excess of $20,000);
(i) declare, set aside, make or pay any indebtedness dividend or other liabilitydistribution (whether in cash, other than stock or property or any combination thereof) in the ordinary and usual course respect of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
, (dii) the Company shall not: (i) grant any increase in the compensation payable split, combine or to become payable by the Company to reclassify any of its executive officers; (ii)(A) adopt capital stock or issue or authorize or propose the issuance of any newother securities in respect of, in lieu of or (B) amend or otherwise increasein substitution for shares of its capital stock, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any employment Person to purchase, repurchase, redeem or severance agreement with orotherwise acquire, except in accordance with the existing written policies any of the Companyits securities, grant including shares of Company Common Stock or any severance option, warrant or termination pay right, directly or indirectly, to any officer, director or employee acquire shares of the CompanyCompany Common Stock;
(ei) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money, except for borrowings and reborrowing under the Company shall not modifyCompany's existing credit facilities or issue any debt securities or assume, amend guarantee or terminate endorse or otherwise as an accommodation become responsible for, the obligations of any of its material contracts Person, or waive, release make any loans or assign any material rights or claimsadvances, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advancesauthorize any capital expenditures or purchases of fixed assets which are, make any loansin the aggregate, advances or capital contributions to, or investments in, any other Personin excess of the amount set forth in Section 4.1 of the Company Disclosure Schedule for the Company taken as a whole; or (iv) enter into or amend any material contract, agreement, commitment or transaction arrangement to effect any of the matters prohibited by this Section 4.1(e);
(includingf) make any change in the rate of compensation, but not limited tocommission, bonus or other remuneration payable, or pay or agree or promise to pay, conditionally or otherwise, any borrowingbonus, capital expenditure extra compensation, pension or purchaseseverance or vacation pay, sale to any director, officer, employee, salesman or lease agent of assets the Company except in the ordinary course of business consistent with prior practice and pursuant to or real estatein accordance with plans disclosed in Section 2.14(a) of the Company Disclosure Schedule that were in effect as of December 31, 1999 or make any increase in or commitment to increase any employee benefits, adopt or make any commitment to adopt any additional employee benefit plan or make any contribution, other than regularly scheduled contributions, to any Employee Benefit Plan;
(g) take any action to change accounting practices, policies or procedures (including procedures with respect to revenue recognition, payments of accounts payable or collection of accounts receivable);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim liability or assessment or consent agree to any material Tax claim or assessment or any waiver an extension of the a statute of limitations for limitations, except to the extent the amount of any such material claim or assessmentsettlement has been reserved for in the Company Financial Statements;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligationswhen due, in the ordinary course of business and consistent with past practice, or claims, practice of liabilities or obligations reflected or reserved against inin the Company Financial Statements or incurred after December 31, or contemplated by, 1999 in the consolidated financial statements (or the notes thereto) ordinary course of the Companybusiness and consistent with past practice;
(j) the Company shall not adopt a plan of complete enter into any transaction, contract or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (commitment other than in the Merger);ordinary course of business; or
(k) the Company shall not take, or agree to commit in writing or otherwise to take, any action that wouldof the actions described in Sections 4.1(a) through (j) above, or is reasonably likely to, result in any action which would make any of the conditions to the Merger set forth in Article VII not being satisfied, representations or would make many representation or warranty warranties of the Company contained herein inaccurate in any respect at, this Agreement untrue or as of any time prior to, the Effective Time, incorrect or that would materially impair the ability of prevent the Company to consummate the Merger in accordance with the terms hereof from performing or materially delay such consummation;
(l) cause the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingperform its covenants herein.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Option Agreement, or (ii) as disclosed on set forth in Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the PurchaserParent, after the date hereof, and prior to the time the directors of the Purchaser have been elected to to, and shall constitute a majority of the Board of Directors of the Company pursuant to Section 1.3 (the "Appointment Date"):
): (a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
; (b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants warrants or conversion of Voting Debtoutstanding Series D Shares, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws By-Laws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
; (c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock Shares reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt warrants outstanding on the date hereofhereof or upon the conversion of the Series D Shares; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
; (d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; officers or (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, under any 21 existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
; (e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
; (f) the Company shall (i) not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the PurchaserParent, except in the ordinary course of business and consistent with past practice;
(g) practice unless the Company shall have obtained a comparable replacement policy; the Company shall not (i) incur or assume any long-term debt, or, or except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice except for borrowings under the Company's existing credit facility with Xxxxxxxxx LLC in the ordinary course of business and consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Personperson, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances (other than travel and expense advances to employees in the ordinary course of business and consistent with past practice) or capital contributions to, or investments in, any other Personperson; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
; (hg) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; GAAP or (ii) other than related to a QEF Election, make any material Tax election, election change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
; and (ih) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
; (ji) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
; (kj) the Company shall not take, or agree to commit to take, any action that would, would or is reasonably likely to, to result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
; (lk) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement Plan prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) except Except as expressly otherwise contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 in Section 6.1 of the Company Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, hereof and prior to the time Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, the directors of the Purchaser have been elected to Company shall, and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):cause its subsidiaries to:
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than conduct their respective businesses in the ordinary and usual course of business and consistent with past practice;
(b) not (i) amend or propose to amend their respective charters or bylaws, (ii) split, combine or reclassify their outstanding capital stock or (iii) declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise, except for the payment of dividends or distributions by a wholly-owned subsidiary of the Company to the Company;
(c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional share of, or any options, warrants or rights of any kind to acquire any share of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that the Company may issue shares upon conversion of convertible securities and exercise of options and warrants outstanding on the date hereof;
(d) not (i) incur or modify become contingently liable with respect to any indebtedness or other liability, for borrowed money other than (A) borrowing required for working capital purposes in the ordinary and usual course of business or (B) borrowing to refinance existing indebtedness on terms which are reasonably acceptable to Parent, (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its capital stock or any security convertible into or exchangeable for its capital stock, (iii) make any acquisition of any assets or businesses other than expenditures for fixed or capital assets in the ordinary course of business, (iv) sell, pledge, dispose of or encumber any assets or businesses other than sales in the ordinary course of business or (v) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement;
(f) subject to restrictions imposed by applicable law, confer on a regular and frequent basis with one or more representatives of Parent to report operational matters of materiality and the general status of ongoing operations;
(g) not enter into or amend any employment, severance, special pay arrangement with respect to termination of employment or other similar arrangements or agreements with any directors, officers, or key employees, except in the ordinary course and consistent with past practice; or (iv) redeemprovided however, purchase or otherwise acquire directly or indirectly that the Company and its subsidiaries shall in no event enter into any of its capital stockwritten employment agreement;
(dh) the Company shall not: (i) grant not adopt, enter into or amend any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive profit sharing, compensation, stock option, pension, retirement, deferred compensation, severancehealth care, profit sharing, stock option, stock purchase, insurance, pension, retirement employment or other employee benefit plan, agreement agreement, trust fund or arrangement; arrangement for the benefit or (iii) enter into welfare of any employment employee or severance agreement with orretiree, except as required to comply with changes in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Companyapplicable law;
(ei) the Company shall not modify, amend or terminate any of use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its material contracts or waive, release or assign any material rights or claims, except tangible assets and its businesses in the ordinary course of business such amounts and against such risks and losses as are consistent with past practice;
(fj) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax electionmake, change or revoke any material Tax election already made, adopt or make any material Tax accounting method, change agreement or settlement regarding Taxes with any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger)taxing authority;
(k) give prompt written notice to Parent of the Company shall not takecommencement of any Environmental Claim, or agree non-routine inspection by any Governmental Authority with responsibility for enforcing or implementing any applicable Environmental Laws, and provide to commit to takePurchaser such information as Purchaser may reasonably request regarding such Environmental Claim, any action that woulddevelopments in connection therewith, or is reasonably likely toand, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior toapplicable, the Effective Time, Company's or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof its subsidiary's anticipated or materially delay such consummationactual response thereto;
(l) use its commercially reasonable efforts to cause the Company shall not redeem transfer of Environmental Permits (on the Rights same terms and conditions), and any financial assurance required thereunder to Parent or terminate, amend or otherwise modify the Rights Agreement prior to Subsidiary as may be necessary under applicable Environmental Laws in connection with the consummation of the Offer unless required transactions under this Agreement to do so by order allow Parent or Subsidiary to conduct the business of a court of competent jurisdictionthe Company and its subsidiaries, as currently conducted; and
(m) in the event that the Company shall not enter into an agreementincurs indebtedness or uses its restricted cash after the date hereof, contract, commitment or arrangement to do any the Company will notify Parent of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.such action and related amounts. 22
Appears in 1 contract
Samples: Merger Agreement (Transamerican Waste Industries Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees thatUnless Amazxx.xxx xxxll otherwise agree in writing, (i) except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted in and only in in, and the Company shall not take any action except in, the ordinary course of business and usual course and, to the extent consistent therewith, in accordance with applicable law; and the Company shall use its best reasonable efforts to preserve its intact the business organization intact of the Company, to keep available the services of the current officers, employees and maintain its existing relations with consultants of the Company and to preserve the current relationships of the Company with, and the goodwill of, customers, supplierssuppliers and other Persons with which the Company has significant business relations. By way of amplification and not limitation, employeesexcept as otherwise contemplated by this Agreement or in the corresponding portion of Section 6.1 to the Company Disclosure Schedules, creditors the Company shall not, between the date of this Agreement and business partnersthe Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Amazxx.xxx, xxich will not be unreasonably withheld:
(a) amend or otherwise change its Articles of Incorporation or Bylaws;
(b) except for the Company will not, directly or indirectly, (i) except upon exercise issuance of stock options or other rights to purchase shares of Company Common Capital Stock pursuant to upon the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtcurrently outstanding Stock Purchase Rights or Options, issue, sell, transfer contract to issue or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, grant, encumber or securities convertible into authorize the issuance, sale, pledge, disposition, grant or exchangeable forEncumbrance of (i) any assets of the Company, except in the ordinary course of business and in a manner consistent with past practice, or options, warrants, calls, commitments or rights of any kind to acquire, (ii) any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment options, warrants, convertible securities or severance agreement with orother rights of any kind to acquire any shares of such capital stock, except in accordance with the existing written policies of the Companyor any other ownership interest (including, grant without limitation, any severance or termination pay to any officer, director or employee phantom interest) of the Company;
(ec) the Company shall not modifydeclare, amend set aside, make or terminate pay any dividend or other distribution, payable in cash, stock or other securities, property or otherwise, with respect to any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course capital stock other than repurchases of business and consistent with past practiceemployee shares at cost pursuant to contractual arrangements;
(fd) the Company shall not permit reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire, directly or indirectly, any insurance policy naming it as a beneficiary of its capital stock or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practiceother securities;
(ge) the Company shall not (i) incur acquire (including, without limitation, by merger, consolidation, or assume acquisition of stock or assets) any long-term debtcorporation, orpartnership, except in the ordinary course other business organization or division thereof or any material amount of business, incur or assume any short-term indebtedness in amounts not consistent with past practiceassets; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guaranteeguarantee or endorse, endorse or otherwise as an accommodation become liable or responsible (whether directlyfor, contingently or otherwise) for the obligations of any other Person, or make any loans or advances, except in the ordinary course of business and consistent with past practice; (iii) enter into any contract or agreement other than in the ordinary course expense advancesof business, make consistent with past practice; (iv) authorize any loans, advances single capital expenditure which is in excess of $30,000 or capital contributions toexpenditures which are, or investments inin the aggregate, any other Personin excess of $40,000 for the Company taken as a whole; or (ivv) enter into any material agreement in which the obligation of the Company exceeds $40,000 or which shall not terminate or be subject to termination for convenience within 180 days following execution; (vi) license any Technology or IP Rights other than customer downloading of software from the Internet in the ordinary course of business; or (vii) amend any contract, agreement, commitment or transaction arrangement with respect to any matter set forth in this subsection (e);
(f) enter into or amend any employment, consulting or agency agreement, or increase the compensation payable or to become payable to its officers, employees, agents or consultants, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance, benefit, Employee Benefit Plan or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(g) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting methods, policies or procedures (including, but not limited towithout limitation, any borrowing, capital expenditure procedures with respect to the payment of accounts payable and collection of accounts receivable) or purchase, sale as required as a result in a change in law or lease of assets or real estate)GAAP;
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt or settle or compromise any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessmentliability;
(i) the Company shall not pay, discharge or satisfy any claimsclaim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, practice or claims, liabilities or obligations reflected or as reserved against in, or contemplated by, on the consolidated financial statements (or the notes thereto) books of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, take any action that would, would or is reasonably likely toto result in any of the representations and warranties of the Company set forth in this Agreement being untrue in any material respect, result or in any covenant of the Company set forth in this Agreement being breached, or in any of the conditions to the Merger set forth specified in Article VII IV hereof not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;; or
(lk) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention agree to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Amazon Com Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants (a) During the period from the date of this Agreement and agrees that, (i) except as expressly contemplated by continuing until the earlier of the termination of this Agreement, the Option Agreement or the Stockholders AgreementEffective Time, unless Parent shall otherwise agree in writing, which agreement shall not be unreasonably withheld, delayed or (ii) as disclosed on Schedule 5.2 conditioned, neither the Board nor the Special Committee shall take or direct any officer, employee or agent of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior Company to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
take any action (a) that shall cause the business of the Company shall or any of its Subsidiaries to be conducted only other than in the ordinary and usual course and, to the extent of business consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
past practice or (b) that shall result in the Company will not, directly or indirectly, (i) except upon exercise issuance of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class class, or any options, warrants or other convertible or exchangeable securities or other rights of the Company, other than any kind to acquire shares of capital stock of any class, or any other ownership interest in the Company Common Stock reserved or any of its Subsidiaries (except for the issuance on the date hereof of Shares issuable pursuant to the exercise of Options or Warrants or conversion of Voting Debt Warrant that is outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;).
(db) During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, unless the Special Committee shall otherwise agree in writing, the Parent shall not take or direct any officer, employee, agent or member of the Board of Directors of the Company shall not: or the Company's Subsidiaries to take any action (i) grant that proximately causes any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate to be materially untrue, except where such untrue representation would not reasonably be expected to have a Material Consequence (defined below) or (ii) that shall result in the issuance of any respect atshares of capital stock of any class, or as any options, warrants or other convertible or exchangeable securities or other rights of any time prior to, the Effective Timekind to acquire shares of capital stock of any class, or any other ownership interest in the Company or any of its Subsidiaries (except for the issuance of Shares issuable pursuant to the Warrant that would is outstanding on the date hereof). For purposes of this Section 4.2(b), "Material Consequence" means any change, effect or circumstance that is materially impair adverse to (x) the ability business, assets, financial condition or results of operations of the Company and its Subsidiaries taken as a whole or (y) the Company's (including its Subsidiaries) ability to satisfy Section 6.2(a) or consummate the Merger in accordance with the terms hereof transactions contemplated by this Agreement without material delay; other than any fact or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.circumstance resulting from:
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) except Except as expressly contemplated by this Agreement, during the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after period from the date hereof, and prior of this Agreement to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewithEffective Time, the Company shall use will conduct its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than operations only in the ordinary and usual course of business and consistent with past practicepractice and will use its best efforts to preserve intact its present business organization, or incur or modify any indebtedness or other liability, other than in keep available the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any services of its capital stock;
(d) present officers and key employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and on-going business shall not be impaired at the Effective Time. During such period the Company shall not: (i) grant promptly report to Parent any increase in the compensation payable occurrence or to become payable by the Company to omission which shall have caused any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or hereunder to become untrue as of any the time of such occurrence or omission, and shall confer on a regular and frequent basis with representatives of Parent to report operational matters of a material nature and to report the general status of the ongoing operations of the business of the Company. Without limiting the generality of the foregoing, and except as contemplated by this Agreement and the Company Disclosure Schedule, the Company will not, prior to, to the Effective Time, without the prior written consent of Parent in each instance:
(a) issue, sell or that would materially impair pledge, or authorize or propose the ability issuance, sale or pledge of (i) any shares of capital stock of any class of the Company (including Company Shares), or securities convertible into any such shares, or any rights, warrants or options to consummate the Merger acquire any such shares or convertible securities, or (ii) any other securities in accordance with the terms hereof respect of, in lieu of or materially delay such consummationin substitution for Outstanding Company Shares;
(lb) the Company shall not purchase or redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior acquire, or propose to the consummation purchase or redeem or otherwise acquire, any outstanding shares of the Offer unless required capital stock of any class (including Company Shares), or securities convertible into any such shares, or any rights, warrants or options to do so by order of a court of competent jurisdiction; andacquire any such shares or convertible securities;
(mc) the Company shall not enter into an agreement, contract, commitment declare or arrangement to do pay any dividend or distribution on any shares of the foregoing, or to its capital stock other than as approved in writing by Parent;
(d) authorize, recommend, propose or announce an intention to do authorize, recommend or propose, or enter into a letter of intent (whether or not binding), an agreement in principle or an agreement with respect to any merger, consolidation or business combination (other than the Merger), any acquisition of assets or securities, any disposition of assets or securities, or any change in the Company's capitalization, or an entry into a material contract other than in the ordinary course of business or any amendment or modification of any material contract rights;
(e) except as may be contemplated herein, take any action which would make any representation or warranty in this Agreement (other than any representation or warranty that speaks as of a particular date) untrue or incorrect, as if made as of such time;
(f) enter into any agreement, contract or commitment (other than in the ordinary course of business and other than agreements, contracts or commitments which were under negotiation on the date hereof and which are disclosed on the Company Disclosure Schedule) which, if entered into prior to the date hereof, would be required to be listed in Section 4.13 of the Company Disclosure Schedule and which involves a payment, obligation or commitment in excess of $10,000;
(g) enter into any contract, agreement, license or commitment which would be breached or violated or in respect of which a right of acceleration would be created by the Company's execution, delivery and performance of this Agreement and the transactions contemplated hereby;
(h) (i) increase or agree to increase the compensation payable or to become payable to its officers or employees, (ii) grant any severance or termination pay to, or enter into any employment or severance agreement, with any employee, (iii) enter into any collective bargaining agreement, (iv) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; or
(i) agree in writing or otherwise to take any of the foregoingforegoing actions.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees thatExcept as set forth on Schedule 5.01, (i) except prior to the Effective Time, unless Parent or SubCo shall otherwise agree in writing or as expressly otherwise contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):other agreements contemplated hereby:
(a) the business of the hte Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnerscourse;
(b) the Company will not, directly or indirectly, shall not (i) except upon exercise of stock options directly or other rights to indirectly redeem, purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge otherwise acquire or agree to sellredeem, transfer purchase or pledge otherwise acquire any treasury stock shares of the Company beneficially owned by it, its capital stock; (ii) amend its Restated Certificate of Incorporation or Bylaws By-laws except to effectuate the transactions contemplated herein or similar organizational documents; therein or in the Disclosures or (iii) split, combine or reclassify the outstanding SharesCompany Stock or declare, set aside or pay any dividend payable in cash, stock or property or make any distribution with respect to any such stock;
(c) the Company shall not: not (i) declare, set aside issue or pay any dividend or other distribution payable in cash, stock or property with respect agree to its capital stock; (ii) issue, sell, pledge, dispose of or encumber issue any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments warrants or rights of any kind to acquire, acquire any shares of capital stock of any class of the Companyof, other than Company Stock, except to issue shares of Company Common Stock reserved for issuance on the date hereof pursuant in connection with any matter contemplated herein or therein or relating to the exercise Disclosures (ii) acquire or dispose of Options any fixed assets or Warrants acquire or conversion dispose of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any other substantial assets other than in the ordinary and usual course of business and consistent with past practice, business; (iii) incur additional Indebtedness or incur any other liabilities or modify enter into any indebtedness or other liability, transaction other than in the ordinary and usual course of business and consistent business; (iv) enter into any contract, agreement, commitment or arrangement with past practicerespect to any of the foregoing; or (ivv) redeemexcept as contemplated by this Agreement, purchase enter into any contract, agreement, commitment or otherwise acquire directly arrangement to dissolve, merge, consolidate or indirectly enter into any of its capital stockother material business combination;
(d) the Company shall not: (i) grant any increase in use its best efforts to preserve intact the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies business organization of the Company, grant any severance or termination pay to any officerkeep available the service of its present officers and key employees, director or employee and to preserve the good will of the Company;those having business relationships with it; and
(e) the Company shall not modifywill not, amend nor will it authorize any director or terminate any of its material contracts authorize or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming officer or employee or any attorney, accountant or other representative retained by it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaserto, except in the ordinary course of business and consistent make, solicit, encourage any inquiries with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions respect to, or investments inengage in any negotiations concerning, any other Person; or Acquisition Proposal (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease as defined below for purposes of assets or real estatethis paragraph);
(h) the . The Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction will promptly advise Parent orally and in writing of any such claims, liabilities inquiries or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements proposals (or requests for information) and the notes thereto) of the Company;
(j) substance thereof. As used in this paragraph, "Acquisition Proposal" shall mean any proposal for a merger or other business combination involving the Company shall not adopt or for the acquisition of a plan substantial equity interest in it or any material assets of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (it other than the Merger);
(k) the as contemplated by this Agreement. The Company shall not takewill immediately cease and cause to be terminated any existing activities, discussions or agree negotiations with any Person conducted heretofore with respect to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) between the date of this Agreement and the Effective Time, except as expressly contemplated by any other provision of this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 set forth in Section 5.01 of the Company Disclosure Schedule, or (iii) as agreed unless Parent shall otherwise consent in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):writing:
(a) the business businesses of the Company and its Subsidiaries shall be conducted only in in, and the Company and its Subsidiaries shall not take any action except in, the ordinary course of business and usual course in a manner consistent with past practice; and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will notshall use commercially reasonable efforts to preserve substantially intact the business organization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other Persons with which the Company or any Subsidiary has significant business relations. Except as expressly contemplated by any other provision of this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule, neither the Company nor any Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, (i) except upon exercise of stock options do, or other rights propose to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtdo, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, following without the prior written consent of Parent:
(iia) amend or otherwise change its Restated Certificate of Incorporation or Bylaws By-laws or similar equivalent organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iib) issue, sell, pledge, dispose of or encumber any additional shares of, grant or securities convertible into or exchangeable forencumber, or authorize such issuance, sale, pledge, disposition, grant, or encumbrance of:
(i) any shares of any class of capital stock of the Company or any Subsidiary, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of stock, or any class other ownership interest (including, without limitation, any phantom interest), of the Company, other than shares Company or any Subsidiary (except for the issuance of Company Common Stock reserved for issuance on the date hereof Shares issuable pursuant to the exercise of Options or Warrants or conversion of Voting Debt employee stock options outstanding on the date hereofof this Agreement and granted under Company Stock Option Plans in effect on the date of this Agreement); or
(iiiii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than of the Company or any Subsidiary, except in the ordinary and usual course of business and in a manner consistent with past practice;
(c) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, other than payable in the ordinary and usual course of business and consistent cash, stock, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock;
(d) the Company shall not: reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) grant any increase in the compensation payable or to become payable acquire (including, without limitation, by the Company to any of its executive officers; (ii)(A) adopt any newmerger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or any significant amount of assets;
(Bii) amend issue any debt securities or assume, guarantee or endorse, or otherwise increasebecome responsible for, the obligations of any Person, or accelerate the payment make any loans or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangementadvances; or or
(iii) enter into or amend any employment contract or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay respect to any officermatter set forth in this Section 5.01(e), director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except other than in the ordinary course of business and consistent with past practice;
(fi) hire any additional employees other than in the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaserordinary course of business, except (A) to fill vacancies arising after the date of this Agreement; (B) to hire non-executive employees for the Company's Beijing office; or (C) to meet increased production demand.
(ii) make any offers to any employee of an employment position other than the employment position he or she currently holds, except for offers of an employment position made in the ordinary course of business and consistent with past practicepractice in connection with the promotion or demotion of any employee of the Company or any of its Subsidiaries who is not a director or officer of the Company;
(giii) increase the Company shall not (i) incur compensation payable or assume any long-term debtto become payable or the benefits provided to its directors, orofficers or employees, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except increases in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make practice in salaries or wages of employees of the Company or any loans, advances of its Subsidiaries who are not directors or capital contributions to, or investments in, any other Person; or officers of the Company;
(iv) except as set forth in Section 5.01 of the Company Disclosure Schedule, grant any loan, advance, extensions of credit to current or former employees or forgiveness or deferral of any loans due from any employee, other than any loan, advance or extension of credit to a current employee in circumstances and in amounts consistent with past practice, in any event not to exceed $10,000 for any one employee and $25,000 in the aggregate;
(v) establish, adopt, enter into, terminate or amend any Plan or establish, adopt or enter into any material commitment plan, agreement, program, policy, trust, fund or transaction other arrangement that would be a Plan if it were in existence as of the date of this Agreement for the benefit of any director, officer or employee except as required by this Agreement or the Transactions contemplated hereby, or as required by ERISA, the Code or to otherwise comply with applicable Law;
(including, but not limited to, vi) grant any borrowing, capital expenditure equity or purchase, sale equity based awards (provided that equity awards may be transferred in accordance with the applicable plan document or lease of assets or real estateagreement);
(hg) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; enter into, amend or (ii) other than related to a QEF Election, make modify in any material Tax electionrespect, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to the termination of, any Material Contract, or amend, waive or modify in any material Tax claim respect, or assessment consent to the termination of, the Company's or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), Subsidiary's rights thereunder other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice;
(h) fail to make in a timely manner any material filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(i) change any Tax election, annual tax accounting period, or claimsmethod of tax accounting, liabilities file amended Tax Returns or obligations reflected claims for Tax refunds by the Company or reserved against inits Subsidiaries, enter into a closing agreement relating to Taxes or contemplated byany settlement of any Tax claim, the consolidated financial statements (audit or the notes thereto) of the Companyassessment;
(j) make any changes in its accounting methods, principles or practices currently in effect, except as required by changes in GAAP or by Regulation S-X under the Company shall not Exchange Act, in each case as concurred in by its independent public accountants;
(k) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the MergerTransactions);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) except as required by applicable Law or GAAP, revalue in any material respect any of its assets, including writing down the Company shall not redeem the Rights value of inventory in any material manner, or terminate, amend writing-off notices or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdictionaccounts receivable in any material manner; andor
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose agree or announce an intention commit to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Naturex S.A.)
Conduct of Business by the Company Pending the Merger. The Except for the transactions contemplated by this Agreement, the Company covenants and agrees that, (i) except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after between the date hereofof this Agreement and the Effective Time, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only in in, and the Company shall not take any action except in, the ordinary and usual course andof business, consistent in all material respects with past practice. The Company shall use its commercially reasonable best efforts to preserve intact its business organizations, to keep available the extent consistent therewithservices of their current officers, employees and consultants, and to preserve their present relationships with customers, suppliers and other persons with which they have significant business relations. By way of amplification and not limitation, except as set forth on SCHEDULE 4.1, the Company shall use its best reasonable efforts to preserve its business organization intact not, between the date of this Agreement and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will notEffective Time, directly or indirectly, (i) except upon exercise of stock options do or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge propose or agree to sell, transfer or pledge do any treasury stock of the Company beneficially owned by it, following without the prior written consent of AVS:
(iia) amend or otherwise change its Restated Certificate articles of Incorporation incorporation or Bylaws bylaws or similar equivalent organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iib) issue, sell, pledge, dispose of or encumber any additional shares of, encumber, or, authorize the issuance, sale, pledge, disposition, grant or securities convertible into or exchangeable forencumbrance of (i) any shares of its capital stock of any class, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose ofstock, or encumber any assets other than ownership interest, of it or (ii) any of its assets, tangible or intangible, except in the ordinary and usual course of business and consistent in all material respects with past practice;
(c) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, other than payable in the ordinary and usual course of business and consistent cash, stock, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable reclassify, combine, split, subdivide or to become payable by the Company to redeem, purchase or otherwise acquire, directly or indirectly, any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Companycapital stock;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur acquire (including, without limitation, for cash or assume shares of stock, by merger, consolidation, or acquisition of stock or assets) any long-term debtinterest in any corporation, partnership or other business organization or division thereof or any assets, or make any investment either by purchase of stock or securities, contributions of capital or property transfer, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse purchase any property or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations assets of any other Person, (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 obligations of any Person, except endorsement of checks payable to the Company in the ordinary course of business, or make any loans or advances, or (iii) enter into any Contract other than in the ordinary course of business, consistent with past practice;
(f) increase the compensation payable or to become payable to its officers or employees, or, except as presently bound to do, grant any severance or termination pay to, or enter into any employment or severance agreement with, any of its directors, officers or other employees, or establish, adopt, enter into or amend or take any action to accelerate any rights or benefits which any collective bargaining, bonus, profit sharing, trust, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees;
(g) take any action other than in the ordinary course of business and in a manner consistent in all material respects with past practice; (iii) other than ordinary course expense advances, make any loans, advances practice with respect to accounting policies or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)procedures;
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any existing claims, liabilities or obligations (absolute, accrued, asserted or unassertedunassorted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent in all material respects with past practice, or claims, practice of due and payable liabilities or obligations reflected or reserved against inin its financial statements, as appropriate, or contemplated byliabilities incurred after the date hereof in the ordinary course of business and consistent in all material respects with past practice;
(i) increase or decrease in any material respect prices charged to its customers, except for previously announced price changes, or take any other action which might reasonably result in any material increase in the consolidated financial statements (loss of customers through non-renewal or the notes thereto) termination of the Company;service contracts or other causes; or
(j) the Company shall not adopt a plan of complete agree, in writing or partial liquidationotherwise, dissolution, merger, consolidation, restructuring, recapitalization to take or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in authorize any of the conditions to the Merger set forth in Article VII not being satisfied, foregoing actions or any action which would make many any representation or warranty of the Company contained herein inaccurate in any respect at, Article III untrue or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingincorrect.
Appears in 1 contract
Samples: Merger Agreement (Aviation Sales Co)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees thatUnless Parent shall otherwise agree in writing, (i) except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted in and only in in, and the Company shall not take any action except in, the ordinary course of business and usual course andin a manner consistent with past practice and in accordance with applicable law. The Company shall use commercially reasonable efforts to preserve intact the business organization of the Company, to keep available the extent consistent therewithservices of the current officers, employees and consultants of the Company and to preserve the current relationships of the Company with, and the goodwill of, customers, suppliers and other Persons with which the Company has significant business relations. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, the Company shall use not, between the date of this Agreement and the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent, which consent shall not be unreasonably withheld or delayed:
(a) amend or otherwise change its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnersArticles of Incorporation or Bylaws;
(b) except for the Company will not, directly or indirectly, (i) except upon exercise issuance of stock options or other rights to purchase shares of Company Common Stock pursuant to or Company Preferred Stock upon the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtcurrently outstanding options, warrants or convertible notes, issue, sell, transfer contract to issue or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, grant, encumber or securities convertible into authorize the issuance, sale, pledge, disposition, grant or exchangeable for, or options, warrants, calls, commitments or rights Encumbrance of any kind to acquire, (i) any shares of capital stock of any class of the Company, (ii) any options, warrants, convertible securities or other than rights of any kind to acquire any shares of Company Common Stock reserved for issuance on such capital stock, or any other ownership interest (including, without limitation, any phantom interest) of the date hereof pursuant to the exercise of Options Company, or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in of the ordinary and usual course of business and consistent with past practiceCompany;
(c) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, payable in cash, stock or other than in the ordinary and usual course of business and consistent securities, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable reclassify, combine, split, subdivide, redeem, purchase or to become payable by the Company to otherwise acquire, directly or indirectly, any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, capital stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Companysecurities;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur acquire (including, without limitation, by merger, consolidation, or assume acquisition of stock or assets) any long-term debtcorporation, orpartnership, except in the ordinary course other business organization or division thereof or any material amount of business, incur or assume any short-term indebtedness in amounts not consistent with past practiceassets; (ii) incur any indebtedness for borrowed money or issue any debt securities (except for the issuance of promissory notes to existing shareholders of the Company up to the principal amount of $1.5 million) or assume, guaranteeguarantee or endorse, endorse or otherwise as an accommodation become liable or responsible (whether directlyfor, contingently or otherwise) for the obligations of any other Person, or make any loans or advances, except in the ordinary course of business and consistent with past practice; (iii) enter into any contract or agreement other than in the ordinary course expense advancesof business, make consistent with past practice; (iv) authorize any loans, advances single capital expenditure which is in excess of $25,000 or capital contributions toexpenditures which are, or investments inin the aggregate, any other Personin excess of $100,000 for the Company taken as a whole; or (ivv) enter into any material agreement in which the obligation of the Company exceeds $25,000 or which shall not terminate or be subject to termination for convenience within 30 days following execution; (vi) license any Technology or IP Rights, except nonexclusive licenses to end users of the Company's products granted in the ordinary course of the Company's business, consistent with past practice; or (vii) enter into or amend any contract, agreement, commitment or transaction arrangement with respect to any matter set forth in this subsection (e);
(f) enter into or amend any employment, consulting or agency agreement, or increase the compensation payable or to become payable to its officers, employees, agents or consultants, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company, or establish, adopt, enter into or amend any Employee Benefit Plan, collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance, benefit or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(g) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting methods, policies or procedures (including, but not limited towithout limitation, any borrowing, capital expenditure or purchase, sale or lease procedures with respect to the payment of assets or real estateaccounts payable and collection of accounts receivable);
(h) take any action that would prevent Parent from being able to account for the Company shall Merger as a pooling of interests whether or not (i) change any permitted by the provisions of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessmentthis Article VI;
(i) the Company shall not make any material Tax election or settle or compromise any Tax liability;
(j) pay, discharge or satisfy any claimsclaim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, take any action that would, would or is reasonably likely toto result in any of the representations or warranties of the Company set forth in this Agreement being untrue in any material respect, result or in any covenant of the Company set forth in this Agreement being breached, or in any of the conditions to the Merger set forth specified in Article VII IV not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation take any action of the Offer unless required to do so by order of a court of competent jurisdictiontype covered in Section 2.7 above; andor
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention agree to do any of the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Except as would not cause a Material Adverse Effect on the Company covenants or as required by Section 8.6, the Company and agrees thatthe Subsidiaries shall carry on their business, (i) and not enter into any transaction other than in accordance with the ordinary course consistent with past practice, and, to the extent consistent therewith, use their best efforts to preserve intact their current business organization, keep available the services of their current officers and preserve their relationships with customers, suppliers and others having business dealings with them except, in each case, with the prior written consent of Parent. Without limiting the generality of the foregoing, and except as expressly contemplated by this Agreement, the Option Agreement or Company and the Stockholders AgreementSubsidiaries shall not, or (ii) as disclosed on Schedule 5.2 without the prior written consent of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):Parent:
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend dividends on, or make any other distribution payable actual, constructive or deemed distributions in cash, stock respect of any of its membership interests or property with respect to its capital stock, or otherwise make any payments to their shareholders in their capacity as such (other than any such payments or distributions otherwise permitted to be made under this Agreement), except that the Subsidiaries shall be entitled to make dividend payments commencing the calendar quarter beginning July 1, 2003; (ii) split, combine or reclassify any of its membership interests or capital stock or issue, sell or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its membership interests or capital stock (other than any issuances of its securities upon exercise of options to purchase Company Shares set forth on Schedule 5.1(b)) or (iii) purchase, redeem or otherwise acquire any shares of capital stock or membership interests of the Company and the Subsidiaries or any other securities thereof;
(b) issue, deliver, sell, pledge, dispose of or otherwise encumber any additional membership interests or shares ofof its capital stock or other securities (including, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquirewithout limitation, any rights, warrants or options to acquire any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock, membership interests or other securities);
(c) amend its Certificate of Formation, LLC Agreement, articles of incorporation or other governing documents;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debtindebtedness for borrowed money, orenter into (as lessee) any capitalized lease obligation, except in the ordinary course guarantee any such indebtedness or obligation, issue or sell any debt securities, or guarantee any debt securities of business, incur others or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; , except for (i) routine investment of excess funds, (ii) incurrence and/or guarantee of indebtedness to fund operations or working capital, and (iviii) enter into any material commitment or transaction as otherwise consistent with current practice;
(includinge) for the period from July 1, but not limited to2003, any borrowingthrough the day that is two days before the Closing Date (measured on the Closing Date as a single, capital expenditure or purchase, sale or lease rolling period on a cumulative basis) allow the quotient of assets or real estatethe total branch commission and foreign exchange revenue divided by the total branch transactions to fall outside the range set forth on Schedule 7.3(e);
(hf) make or incur any new capital expenditure or expenditures which, individually, is in excess of $100,000 or, in the Company shall not (i) change any aggregate, are in excess of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment$2,500,000;
(ig) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than payments made to BNP Paribas as lender or agent, and other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, thereof in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against inincluding without limitation payments to other lenders, or as are necessary to accomplish the transactions contemplated byby this Agreement in accordance with its terms;
(h) alter through merger, liquidation, reorganization, restructuring or in any other fashion its corporate structure;
(i) enter into or adopt, or amend, any bonus, incentive, deferred compensation, insurance, medical, hospital, disability or severance plan, agreement or arrangement or enter into or amend any employee benefit plan or employment, consulting or management agreement, other than any such amendment to an employee benefit plan that is made to maintain the consolidated financial statements (qualified status of such plan or the notes thereto) of the Companyits continued compliance with applicable law;
(j) except as may be requested by a Governmental Body or as required by GAAP, make any change in accounting practices or policies applied in the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization preparation of the Company (other than the Merger)financial statements referred to in Section 5.4;
(k) modify any of the Company shall not takeagreements, understandings, obligations, commitments, indebtedness or agree to commit to take, any action that would, or is reasonably likely to, result other obligations set forth in any of the conditions Schedules to this Agreement, enter into any agreement, understanding, obligation or commitment (other than settlement agreements with financial institutions, which shall not be restricted by this clause (x)), or incur any indebtedness or obligation, of the type that would have been required to be listed on Schedule 5.14 if in existence on the date hereof, or enter into any contract which requires any approval or consent by any other Person to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummationtransactions contemplated by this Agreement;
(l) enter into any contract for the Company shall not redeem purchase of real property or for the Rights sale of any Owned Real Property or terminate, amend or otherwise modify the Rights Agreement prior exercise any option to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; andpurchase real property listed in Schedule 5.8;
(m) sell, lease (as lessor), transfer or otherwise dispose of (including any transfers from the Company shall not enter into an agreementor the Subsidiaries to any Shareholder Group Member), contractor mortgage or pledge, commitment or arrangement impose or suffer to do be imposed any Encumbrance on, any of the foregoingCompany’s or the Subsidiaries’ assets, other than inventory and minor amounts of personal property sold or otherwise disposed of, or real property leased to authorizethird parties for fair value in the ordinary course of business consistent with past practice;
(n) cancel any debts owed to or claims held by the Company or the Subsidiaries (including the settlement of any claims or litigation) other than in the ordinary course of business consistent with past practice;
(o) prepare or file any Tax Return inconsistent with past practice or, recommendon any such Tax Return, propose take any position, make any election, or announce an intention to do adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods) other than in the ordinary course of business;
(p) voluntarily close or otherwise voluntarily cease business operations at any branch locations open and operating as of the foregoingdate hereof;
(q) terminate any Employees without cause, it being understood that for cause shall include, for those Employees working in the United States, an Employee’s failure to demonstrate, to the Company’s or a Subsidiary’s reasonable satisfaction, that the Employee is legally entitled to work in the United States; or
(r) except as set forth in Article 6 of the Earnout Agreement or in the business plan provided by Company to Parent prior to the date hereof, open any additional branch locations; provided, however that the Company may not open any branches in the States of New York or New Jersey without the express written consent of Parent even if such additional branches are contemplated in the business plan provided to Parent.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) between the date of this Agreement and the Effective Time, except as expressly contemplated by set forth in this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 Section 5.01 of the Company Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business businesses of the Company and its Subsidiaries shall be conducted only in the ordinary Ordinary Course, and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its substantially intact the business organization intact of the Company and maintain its existing relations Subsidiaries and to preserve the current relationships of the Company and its Subsidiaries with customers, suppliers, employees, creditors suppliers and business partners;
(b) other Persons with which the Company will notor any of its Subsidiaries has significant business relations. Except as expressly set forth in this Agreement or set forth in Section 5.01 of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Parent, which consent shall not be unreasonably withheld or delayed:
(ia) except upon exercise of stock options amend or other rights to purchase shares of otherwise change the Company Common Stock pursuant to the Option Plans outstanding on the date hereof Charter or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock Bylaws of the Company beneficially owned by it, (ii) amend its Restated Certificate or any equivalent organizational documents of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify any Significant Subsidiaries of the outstanding SharesCompany;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iib) issue, sell, pledge, dispose of or encumber any additional shares of, grant or securities convertible into or exchangeable forencumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, any shares of any class of capital stock of the Company or any of its Subsidiaries, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock, or any other ownership interest, of the Company or any of its Subsidiaries;
(c) except to the extent necessary to maintain its status as a REIT (provided that any dividend or distribution materially in excess of dividends or distributions paid prior to the date hereof shall require prior consultation with Parent), declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock of except for (i) distributions by the Company or any class wholly-owned Subsidiary of the Company, other than shares Company to the Company or another wholly-owned Subsidiary of the Company and (ii) monthly dividends payable quarterly of $0.0592 or quarterly dividends of $0.1776 per share of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(fd) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock except in the Ordinary Course;
(i) acquire any corporation, partnership, other business organization or any division thereof in any transaction or series of related transactions (including by merger, consolidation or acquisition of stock or assets or any other business combination) other than acquisitions pursuant to agreements or commitments in effect as of the date hereof which agreements are listed on Schedule 5.01 hereto; (ii) acquire any asset having a value in excess of $500,000 without first providing Parent five (5) Business Days’ prior notice and consulting with Parent with respect thereto and acquire any asset with a value or for consideration in excess of $5,000,000 or in excess of the Aggregate Limit in the aggregate, other than acquisitions pursuant to contracts or agreements in effect as of the date of this Agreement (including by merger, consolidation, or acquisition of stock or assets or any other business combination) and provided that the agreements with respect to any asset acquisitions entered into as permitted under this clause (i) are on an arm’s-length basis; (iii) except for borrowings under that certain Amended and Restated Credit Agreement dated as of August 23, 2005 by and among the Company (and various CNL entities) and Bank of America, N.A. and various other financial institutions in an amount not to exceed $25,000,000 and indebtedness for borrowed money assumed in connection with any asset acquisition permitted under Section 5.01(e)(ii) incur 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, or make any loans or advances, or grant any security interest in any of its assets; (iv) enter into or amend or modify in any material respect or terminate any material contract or agreement other than (1) renewals or extensions of Company Leases on terms substantially equivalent to such Company Lease so renewed or extended, (2) leases with respect to real property entered into by the Company or a Subsidiary of the Company as landlord in connection with any asset acquisition permitted under Section 5.02(e)(ii) (provided that, in connection with any asset acquisition permitted under such Section without the prior consent of Parent, the Company shall not permit also have consulted with Parent on such leases during the five (5) Business Day period referred to therein), (3) any insurance policy naming it as a beneficiary other lease of real property entered into by the Company or a loss payable payee Subsidiary of the Company as landlord provided that the lease does not represent in excess of 10% of the gross leasable area with respect thereto and (4) any other material contract other than a lease provided that such contract is terminable by the Company or one of its Subsidiaries on no more than 90 days’ notice without the payment of a penalty or premium, and provided that any material contract or amendment or modification of any material contract under any of clauses (1) through (4) is on an arm’s-length basis; or (v) authorize, or make any commitment with respect to be cancelled or terminated without notice to make any single capital expenditure that is in excess of $5,000,000 or capital expenditures that are, in the Purchaseraggregate, in excess of the Aggregate Limit, except for capital expenditures in accordance with and on the ordinary course timetable contemplated by the capital budget of business and consistent with past practicethe Company attached hereto as Schedule 5.01(e);
(f) voluntarily create or incur any Lien material to it or any of its Subsidiaries on any of its assets or any assets of its Subsidiaries having a value in excess of $500,000;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, to or investments in, in any Person (other Person; than between itself and any of its direct or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estateindirect wholly-owned Subsidiaries);
(h) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $5,000,000 or settle any litigation or other proceedings before a Governmental Authority or arbitrator or make any payments in respect thereof in excess of $100,000 for any individual litigation or proceeding or $750,000 in the Company aggregate (it being understood that this clause shall not apply to any fees and expenses paid in connection with the defense of any such litigation or proceeding);
(i) change transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its assets, including (with respect to assets of the accounting methods used by it unless required by GAAP; Company) capital stock of any of its Subsidiaries, having a value in excess of $500,000 individually or (ii) $1,500,000 in the aggregate other than related pursuant to agreements or contracts in effect as of the date of this Agreement and provided that all contracts entered into as permitted under this clause (i) shall be on an arm’s-length basis;
(j) take any material action with respect to accounting policies or procedures;
(k) enter into an agreement with respect to any merger, consolidation, liquidation or business combination, or any acquisition or disposition of all or substantially all of the assets or securities of the Company or any of its Significant Subsidiaries;
(l) except to the extent reasonably necessary to maintain the Company’s status as a QEF ElectionREIT, make or rescind any material Tax election, change settle or compromise any material Tax election already made, adopt liability or make any material amendment to any Tax accounting method, change Return;
(m) enter into any material Prohibited Transaction (as defined in Section 857 of the Code);
(n) take any action (or fail to take any action) that would cause the Company to fail to qualify as a REIT;
(o) fail to timely file any Tax accounting method unless Returns that are required to be filed by GAAPthe Company or any Company Tax Subsidiary; or
(p) announce an intention, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend agreement or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of make a court of competent jurisdiction; and
(m) the Company shall not enter into an agreementcommitment, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Health Care Property Investors Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees thatUnless InnerSpace shall otherwise agree in writing, (i) except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted in and only in in, and the Company shall not take any action except in, the ordinary course of business and usual course andin a manner consistent with past practice and in accordance with applicable law; and the Company shall use commercially reasonable efforts to preserve intact the business organization of the Company, to keep available the extent consistent therewithservices of the current officers, employees and consultants of the Company and to preserve the current relationships of the Company with, and the goodwill of, customers, suppliers and other Persons with which the Company has significant business relations. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, the Company shall use not, between the date of this Agreement and the Effective Time, directly or indirectly do any of the following without the prior written consent of InnerSpace:
(a) amend or otherwise change its best reasonable efforts Articles of Incorporation or Bylaws, other than to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnerseffect a change in the Company's corporate name;
(b) except for the Company will not, directly or indirectly, (i) except upon exercise issuance of stock options or other rights to purchase shares of Company Common Capital Stock pursuant to upon the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtcurrently outstanding Stock Purchase Rights, issue, sell, transfer contract to issue or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, grant, encumber or securities convertible into authorize the issuance, sale, pledge, disposition, grant or exchangeable forEncumbrance of (i) any assets of the Company, or optionsexcept in the ordinary course of business and in a manner consistent with past practice, warrants, calls, commitments or rights of any kind to acquire, (ii) any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transferany options, leasewarrants, license, sell, mortgage, pledge, dispose ofconvertible securities or other rights of any kind to acquire any shares of such capital stock, or encumber any assets other than in ownership interest (including, without limitation, any phantom interest) of the ordinary and usual course of business and consistent with past practiceCompany;
(c) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, payable in cash, stock or other than in the ordinary and usual course of business and consistent securities, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable reclassify, combine, split, subdivide, redeem, purchase or to become payable by the Company to otherwise acquire, directly or indirectly, any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, capital stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except securities other than as provided in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the CompanySection 6.10;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur acquire (including, without limitation, by merger, consolidation, or assume acquisition of stock or assets) any long-term debtcorporation, orpartnership, except in the ordinary course other business organization or division thereof or any material amount of business, incur or assume any short-term indebtedness in amounts not consistent with past practiceassets; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guaranteeguarantee or endorse, endorse or otherwise as an accommodation become liable or responsible (whether directlyfor, contingently or otherwise) for the any obligations of any other Person, or make any loans or advances, except in the ordinary course of business and consistent with past practice; (iii) enter into any contract or agreement other than in the ordinary course expense advancesof business, make consistent with past practice; (iv) authorize any loans, advances single capital expenditure which is in excess of $1,000 or capital contributions toexpenditures which are, or investments inin the aggregate, any other Personin excess of $10,000 for the Company taken as a whole; or (ivv) enter into any material agreement in which the obligation of the Company exceeds $1,000 or which shall not terminate or be subject to termination for convenience within 30 days following execution; (vi) license any Technology or IP Rights; or (vii) enter into or amend any contract, agreement, commitment or transaction arrangement with respect to any matter set forth in this subsection (e);
(f) enter into or amend any employment, consulting or agency agreement, or increase the compensation payable or to become payable to any of its officers, employees, agents or consultants, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance, benefit, Employee Benefit Plan or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; provided, however, that the Company shall terminate prior to any enrollment thereunder and prior to the Closing Date its Code section 401(k) plan;
(g) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting methods, policies or procedures (including, but not limited towithout limitation, any borrowing, capital expenditure or purchase, sale or lease procedures with respect to the payment of assets or real estateaccounts payable and collection of accounts receivable);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt or settle or compromise any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessmentliability;
(i) the Company shall not pay, discharge or satisfy any claimsclaim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, take any action that would, would or is reasonably likely toto result in any of the representations or warranties of the Company set forth in this Agreement being untrue in any material respect, result or in any covenant of the Company set forth in this Agreement being breached, or in any of the conditions to the Merger set forth specified in Article VII 5 hereof not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;; or
(lk) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention agree to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Innerspace Corp)
Conduct of Business by the Company Pending the Merger. 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 its terms (ithe “Pre-Closing Period”), except (1) except as expressly contemplated by any other provision of this Agreement, (2) as set forth in Section 6.01 of the Option Agreement Company Disclosure Schedule or (3) as required by applicable Law, the Stockholders Company shall (x) conduct the businesses of the Company and the Company Subsidiaries in the ordinary course of business and (y) use its commercially reasonable efforts to preserve substantially intact the business organization of the Company and the Company Subsidiaries. Except (1) as contemplated by any other provision of this Agreement, (2) as set forth in Section 6.01 of the Company Disclosure Schedule or (ii3) as disclosed on Schedule 5.2 required by applicable Law, neither the Company nor any Company Subsidiary shall, during the Pre-Closing Period, do any of the Disclosure Schedulefollowing without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):delayed:
(a) the business amend or otherwise change its certificate of the Company shall be conducted only in the ordinary and usual course andincorporation, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnersbylaws or other similar organizational documents;
(b) the Company will not, directly or indirectly, (i) except upon exercise issue, sell, grant, dispose of, encumber (other than Permitted Liens), or authorize such issuance, sale, grant, disposition or encumbrance of, any shares of stock options any class of share capital of the Company or any Company Subsidiary, or any options, warrants, convertible securities or other rights of any kind to purchase acquire any shares of such share capital, or any other ownership interest, of the Company Common Stock or any Company Subsidiary (except for the issuance of Shares issuable pursuant to the Option Plans Company Stock Options or Restricted Stock Units or conversion of Convertible Securities that are outstanding on the date hereof of this Agreement) or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, (ii) sell, transfer dispose of, encumber (other than Permitted Liens), transfer, lease, sublease, license, pledge, discontinue, abandon, allow to lapse or pledge expire, fail to maintain, or agree to sellauthorize any of the foregoing with respect to, transfer any material assets, properties, rights, title or pledge any treasury stock interests of the Company beneficially owned by itor any Company Subsidiary except, in the case of this clause (ii), in the ordinary course of business or pursuant to existing Contracts set forth on Section 6.01(b) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding SharesCompany Disclosure Schedule;
(c) the Company shall not: (i) declare, set aside aside, establish a record date for, make or pay any dividend or other distribution distribution, payable in cash, stock shares, property or property otherwise, with respect to any of its share capital, except for dividends or other distributions by any direct or indirect wholly-owned Company Subsidiary to the Company or any other direct or indirect wholly-owned Company Subsidiary;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any share capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such share capital stock of or other equity or voting interests of, the Company or any class of the CompanyCompany Subsidiary, other than shares (i) the acquisition by the Company of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt Options, Restricted Shares, Performance Shares and Restricted Stock Units outstanding on the date of this Agreement as required by the terms of an agreement outstanding as of the date hereof, (ii) as required pursuant to the terms of the Convertible Securities and (iii) any “cashless exercise” or “net exercise” provision relating to any Company Stock Options outstanding as of the date of this Agreement or awarded or granted following the date of this Agreement in accordance with the terms of this Agreement or in connection with tax withholding upon the exercise of Company Stock Options or the vesting of Restricted Shares, Performance Shares or Restricted Stock Units;
(e) (i) acquire (including by amalgamation, merger, consolidation, or acquisition of equity interests or assets or any other business combination), or make any investment in, any asset, property, company, corporation, partnership, other business organization (or any division thereof), except for purchases of assets or property in the ordinary course of business or that would otherwise be permitted pursuant to clause (iv); (ii) except for letters of credit, bank guarantees, security of performance bonds or similar credit support instruments, overdraft facilities or cash management programs, in each case, issued, made or entered into in the ordinary course of business or intercompany indebtedness, incur, prepay, refinance, amend the terms of any indebtedness for borrowed money or issue any debt securities, warrants or other rights to acquire any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person (including by entering into any “keep well” or other agreement to maintain any financial statement condition of another person); (iii) transferenter into, leaseextend, licenseterminate, sellmodify, mortgage, pledge, dispose of, waive rights under or encumber amend any assets other than in Selected Contract (or Contract that would be a Selected Contract if entered into as of the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liabilitydate hereof), other than in the ordinary and usual course of business and consistent with past practicebusiness; or (iv) redeemmake, purchase authorize, or otherwise acquire directly make any commitment with respect to, capital expenditures that in the aggregate exceed by $5,000,000 the aggregate amount of the annual capital expenditures budget of the Company and the Company Subsidiaries, taken as a whole, set forth on Section 6.01(e)(iv) of the Company Disclosure Schedule or indirectly (v) enter into any swap or hedging transaction or other derivative agreements, other than in the ordinary course of its capital stockbusiness;
(df) except as otherwise required under any Plan in existence as of the Company shall notdate of this Agreement: (i) grant any increase in the compensation payable or to become payable by or the benefits provided to its Company Service Providers, except for increases in compensation to any Excluded Employees in the ordinary course of its executive officersbusiness; (ii)(Aii) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any retention, severance or termination pay to to, or enter into any officeremployment, director bonus, change of control or employee severance agreement with, any Company Service Provider; (iii) establish, adopt, enter into, terminate or amend any Plan, or establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the Company;
(e) the Company shall not modify, amend or terminate any date of its material contracts or waive, release or assign any material rights or claimsthis Agreement, except as required by Law or as otherwise permitted in clause (i) above; (iv) hire or terminate, other than for cause, any executive officer; or (v) grant any equity or equity-based incentive compensation; except, in the case of the matters described in clauses (ii) and (iii), (x) in connection with the hiring of new employees or contractors who are not directors or executive officers in the ordinary course of business and consistent (y) in connection with past practice;
the promotion of employees who are not directors or executive officers (fand who will not be directors or executive officers after such promotion) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business;
(g) fail to maintain in full force and effect or materially modify (i) the existing insurance policies (or alternative policies with comparable terms and conditions) covering the Company and the Company Subsidiaries and their respective properties, incur assets and businesses or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Personpublished user-facing privacy policies, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)as required by Law;
(h) the Company shall not settle any Action other than (i) change settlements involving payments by the Company of not more than $5,000,000 in the aggregate (net of insurance proceeds and third party indemnification recoveries payable to the Company or any of the accounting methods used by it unless required by GAAP; its Subsidiaries in connection with such settlement) or (ii) other than subject to Section 7.10, stockholder litigation arising out of or related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessmentTransactions;
(i) the Company shall not pay, discharge or satisfy enter into any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course new line of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) outside its existing line of business as of the Companydate of this Agreement;
(j) the Company shall not enter into or adopt any “poison pill” or similar stockholder rights plan;
(k) adopt a plan of complete or partial liquidation, liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummationdocument;
(l) except as required by GAAP or applicable Law, (i) revalue in any material respect any of its properties or assets, including writing-off notes or accounts receivable, other than in the Company shall not redeem the Rights ordinary course of business consistent with past practice or terminate(ii) make any change in financial accounting methods, amend principles, policies or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; andpractices or procedures;
(m) the Company shall not make, change or revoke any material Tax election, adopt or change any method of Tax accounting or Tax accounting period with respect to a material amount of taxes, materially amend any Tax Returns or file claims for material Tax refunds, enter into an any closing agreement, contract, commitment agree to an extension or arrangement to do any waiver of the foregoingstatute of limitations with respect to the assessment or determination of any material Tax, settle or compromise any material Tax liability, or surrender any right to claim a material Tax refund; or
(n) authorize, recommendcommit or enter into any agreement, propose whether written or announce an intention otherwise, to do any of the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants During the period from the date of this Agreement and agrees that, (i) except as expressly contemplated by continuing until the earlier of the termination of this Agreement, the Option Agreement or the Stockholders AgreementEffective Time, or the Company agrees (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior except to the time the directors of the Purchaser have been elected extent that Parent shall otherwise consent in writing), to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the carry on its business of the Company shall be conducted only in the usual, regular and ordinary course and usual course in substantially the same manner as previously conducted, to pay its debts and Taxes when due (subject to good faith disputes over such debts or Taxes), to pay or perform other obligations when due and, to the extent consistent therewithwith such business, the Company shall to use its best all reasonable efforts consistent with past practices and policies to preserve intact its present business organization intact organization, keep available the services of its present officers and maintain key employees and consultants and preserve its existing relations relationships with customers, suppliers, employeesdistributors, creditors licensors, licensees, and others having business partners;
(b) dealings with it, to the end that its goodwill and ongoing businesses would be unimpaired at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business of the Company. By way of amplification and not limitation, except as specifically contemplated by this Agreement or as specifically set forth in Section 5.1 of the Company will Disclosure Schedule, the Company shall not, between the date of this Agreement and the Effective Time, directly or indirectly, (i) except upon exercise of stock options do, or other rights propose to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtdo, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, following without the prior written consent of Parent:
(iia) amend or otherwise change its Restated Certificate Articles of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding SharesBylaws;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iib) issue, sell, pledge, dispose of or encumber any additional shares of, grant, encumber, authorize or securities convertible into propose the issuance, sale, pledge, disposition, grant or exchangeable forencumbrance of any shares of its capital stock of any class, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of or any class other ownership interest (including, without limitation, any phantom interest), of the CompanyCompany or any Subsidiary, other than shares of Company Common Stock reserved for issuance on the date hereof except pursuant to the exercise terms of Options options, warrants or Warrants or conversion of Voting Debt preferred stock outstanding on the date hereof; of this Agreement;
(iiic) transfersell, lease, license, sell, mortgage, pledge, grant, encumber or otherwise dispose ofof any of its properties or assets which are material, individually or encumber any assets other than in the aggregate, to its business, except in the ordinary and usual course of business and business, consistent with past practice;
(d) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, other than payable in the ordinary and usual course of business and consistent cash, stock, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock;
(de) split, combine, subdivide, redeem or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or purchase or otherwise acquire, directly or indirectly, any shares of its capital stock except from former employees, directors and consultants in accordance with agreements providing for the repurchase of shares in connection with any termination of service by such party;
(f) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest or any assets in any corporation, partnership, other business organization or any division thereof;
(g) institute or settle any Company shall not: Legal Proceeding;
(h) 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 obligations of any person, or make any loans or advances;
(i) grant authorize any increase capital expenditure in excess of $25,000 individually or in the aggregate;
(j) enter into any lease or contract for the purchase or sale of any property, real or personal;
(k) waive or release any material right or claim;
(l) increase, or agree to increase, the compensation payable payable, or to become payable by the Company payable, to any of its executive officers; (ii)(A) adopt any newofficers or employees, or (B) amend grant any severance or otherwise increasetermination pay to, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with orwith, any of its directors, officers or other employees, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; provided, however, that the foregoing provisions of this subsection shall not apply to any amendments to employee benefit plans described in Section 3(3) of ERISA that may be required by Law;
(m) accelerate, amend or change the period of exercisability or the vesting schedule of restricted stock or Company Options granted under any option plan, employee stock plan or other agreement or authorize cash payments in exchange for any Company Options granted under any of such plans, except as specifically required by the terms of such plans or any such agreement or any related agreement in accordance with the existing written policies effect as of the Companydate of this Agreement and disclosed in the Company Disclosure Schedule;
(n) extend any offers of employment to potential employees, grant consultants or independent contractors or terminate any severance existing employment relationships;
(o) amend or termination pay terminate any Company Material Contract;
(p) enter into, amend or terminate any contract, agreement, commitment or arrangement that, if fully performed, would not be permitted under this Section 5.1;
(q) other than in the ordinary course of business consistent with past practice, enter into any licensing, distribution, OEM, sponsorship, advertising, merchant program or other similar contracts, agreements or obligations that may not be cancelled without penalties by the Company upon notice of 30 days or less;
(r) enter into any contract or agreement material to any officerthe business, director results of operations or employee financial condition of the Company;
(es) pay, discharge or satisfy any material claim, liability or obligation (absolute, accrued, asserted, unasserted, contingent or otherwise);
(t) take any action with respect to accounting policies, principles or procedures;
(u) make or change any material Tax or accounting election, change any annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the Company shall not modifyor any Subsidiary, amend surrender any right to claim refund of Taxes, consent to any extension or terminate waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any Subsidiary, or take any other action or omit to take any action that would have the effect of its material contracts increasing the Tax liability of the Company or waiveany Subsidiary or Parent;
(v) (i) sell, release assign, lease, terminate, abandon, transfer, permit to be encumbered or assign otherwise dispose of or grant any material rights security interest in and to any item of the Company Intellectual Property, in whole or claimsin part, except (ii) grant any license with respect to any Company Intellectual Property, other than a license of software granted to customers of the Company or any Subsidiary to whom the Company or any Subsidiary licenses such software in the ordinary course of business and consistent business, (iii) develop, create or invent any Intellectual Property jointly with past practiceany third party, or (iv) disclose, or allow to be disclosed, any confidential Company Intellectual Property, unless such disclosure is subject to a confidentiality or non-disclosure covenant protecting against the loss of its confidentiality;
(fw) make (or become obligated to make) any bonus payments to any of its officers or employees;
(x) revalue any of its assets, including writing down the value of inventory or writing off notes or accounts receivable;
(y) fail to maintain its equipment and other assets in good working condition and repair according to the standards it has maintained up to the date of this Agreement, subject only to ordinary wear and tear;
(z) take any action or fail to take any action that would cause there to be a Company shall not Material Adverse Effect;
(aa) permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the PurchaserParent, except policies providing coverage for losses not in the ordinary course excess of business and consistent with past practice$25,000 which are replaced without diminution of or gaps in coverage;
(gbb) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions towrite off as uncollectible, or investments in, establish any other Person; or (iv) enter into any material commitment or transaction (including, but not limited extraordinary reserve with respect to, any borrowing, capital expenditure account receivable or purchase, sale or lease of assets or real estate);other indebtedness; or
(hcc) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit in writing or otherwise to take, any action that wouldof the actions described in subsections (a) through (bb) above, or any action which is reasonably likely to, result in to make any of the conditions Company’s representations or warranties contained in this Agreement untrue or incorrect in any material respect on the date made (to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, extent so limited) or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (DemandTec, Inc.)
Conduct of Business by the Company Pending the Merger. The Company covenants Stockholders covenant and agrees agree that, (i) except from the date of this Agreement until the Closing Date, unless Group 1 shall otherwise agree in writing or as otherwise expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date")::
(a) the The business of the Company shall be conducted only in, and the Company shall not take any action except in, the ordinary course of business and consistent with past practice. In connection therewith, the parties agree that the Company may dealer trade vehicles for similar models, but the Company shall not liquidate or otherwise dispose of any of their new vehicles other than in the ordinary course of business to retail buyers. The Company agrees to maintain their advertising expenditures and usual course and, to the extent consistent therewith, the activities commensurate with prior business practices. The Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnersnot advertise a "Going Out of Business" sale;
(b) the The Company will not, shall not directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge indirectly do any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall notfollowing: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber encumber, (A) any additional shares of, capital stock (or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class stock) of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iiiB) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practicepractice and not relating to the borrowing of money, any assets of the Company, (ii) amend or propose to amend the articles of incorporation or bylaws (or other organizational documents) of the Company, (iii) split, combine or reclassify any outstanding capital stock of the Company, or incur declare, set aside or modify pay any indebtedness dividend payable in cash, stock, property or other liabilityotherwise with respect to its capital stock whether now or hereafter outstanding (except as provided in Section 6.3(j) below), other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly offer to acquire any of its capital stock;
, (dv) the Company shall not: create, incur, assume, guarantee or otherwise become liable or obligated with respect to any indebtedness for borrowed money (i) grant any increase other than floor plan indebtedness incurred in the compensation payable or to become payable by the Company to any ordinary course of its executive officers; (ii)(A) adopt any newbusiness), or (Bvi) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice, enter into any contract, agreement, commitment or arrangement with respect to any of the matters set forth in this Section 6.3(b);
(c) The Company shall use its best efforts (i) to preserve intact the business organization of the Company, (ii) to maintain in effect any franchises, authorizations or similar rights of the Company, (iii) to keep available the services of its current officers and key employees, (iv) to preserve the goodwill of those having business relationships with it, (v) to maintain and keep its properties in as good a repair and condition as presently exists, except for deterioration due to ordinary wear and tear, (vi) to maintain in full force and effect insurance comparable in amount and scope of coverage to that currently maintained by it, (vii) to collect its accounts receivable, (viii) to preserve in full force and effect all leases, operating agreements, easements, rights-of-way, permits, licenses, contracts and other agreements which relate to its assets (other than those expiring by their terms), and (ix) to perform or cause to be performed all of its obligations in or under any of such leases, agreements and contracts.
(d) The Company shall not make or agree to make any single capital expenditure or enter into any purchase commitments in excess of $50,000;
(e) The Company shall perform its obligations under any contracts and agreements to which it is a party or to which its assets are subject, except for such obligations as the Company in good faith may dispute;
(f) the The Company shall not permit increase the salary, benefits, stock options, bonus or other compensation of any insurance policy naming it as a beneficiary officer, director or a loss payable payee to be cancelled or terminated without notice to employee of the Purchaser, except in the ordinary course of business and Company other than consistent with past practicebusiness practices of the Company; and shall not grant, to any individual, severance or termination pay that exceeds the lesser of (i) such individual's compensation for the calendar month immediately preceding such individual's grant of severance or termination pay, or (ii) $50,000;
(g) the The Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, take any action that would, or is that reasonably likely could be expected to, result in any of the representations and warranties set forth in this Agreement becoming untrue or any of the conditions to the Merger set forth in Article VII VIII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(lh) the The Company shall not redeem the Rights or terminate, (i) amend or otherwise modify terminate any Plan or Benefit Program or Agreement except as may be required by applicable law, (ii) increase or accelerate the Rights Agreement prior to the consummation payment or vesting of the Offer unless required to do so by order of a court of competent jurisdiction; andamounts payable under any Plan or Benefit Program or Agreement, or (iii) adopt or enter into any personnel policy, stock option plan, collective bargaining agreement, bonus plan or arrangement, incentive award plan or arrangement, vacation policy, severance pay plan, policy or agreement, deferred compensation agreement or arrangement, executive compensation or supplemental income arrangement, consulting agreement, employment agreement or any other employee benefit plan, agreement, arrangement, program, practice or understanding (other than the Plans and the Benefit Programs or Agreements);
(mi) the The Company shall not enter into an agreementany agreement or incur any obligation, contract, commitment or arrangement to do any the terms of which would be violated by the consummation of the foregoingtransactions contemplated by this Agreement; and
(j) Notwithstanding anything in this Agreement to the contrary, dividends or other form of distribution to authorize, recommend, propose or announce an intention to do any the Stockholders may be made after the date of the foregoingInterim Balance Sheet so long as such distributions do not cause the Company to be in violation of any manufacturer working capital or equity guidelines or requirements. In computing the Company's manufacturer working capital requirements, the effect of the approximately $1,000,000 misclassification relating to the renovation of the Perimeter facility shall be excluded.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Group 1 Automotive Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) between the date of this Agreement and the Effective Time, except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 set forth in Section 5.01 of the Company Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business businesses of the Company and the Subsidiaries shall be conducted only in the ordinary course of business and usual course and, to the extent in a manner consistent therewith, with past practice and the Company shall use its reasonable best reasonable efforts to preserve its substantially intact the business organization of the Company and the Subsidiaries and to preserve substantially intact the current relationships of the Company and maintain its existing relations the Subsidiaries with customers, supplierssuppliers and other persons with which the Company or any Subsidiary has material business relations. Without limiting the generality of the foregoing, employeesexcept as expressly contemplated by any other provision of this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule, creditors neither the Company nor any Subsidiary shall, between the date of this Agreement and business partnersthe Effective Time, do any of the following without the prior written consent of Parent:
(a) amend or otherwise change its Certificate of Incorporation, By-Laws or other similar organizational documents;
(b) the Company will notissue, directly sell, dispose of, encumber (other than Permitted Liens), or indirectlyauthorize such issuance, sale, disposition or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest, of the Company or any Subsidiary (except upon exercise for the issuance of Shares issuable pursuant to employee stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans restricted stock units, in each case, outstanding on the date hereof of this Agreement ) or upon exercise (ii) except in the ordinary course of outstanding Warrants or conversion of Voting Debtbusiness consistent with past practice, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock material assets of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Sharesany Subsidiary;
(c) the Company shall not: (i) declare, set aside aside, make or pay any dividend or other distribution distribution, payable in cash, stock stock, property or property otherwise, with respect to any of its capital stock, except for dividends or other distributions by any direct or indirect wholly owned Subsidiary to the Company or any other direct or indirect wholly owned Subsidiary;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any capital stock of the Company or any Subsidiary;
(e) (i) acquire (including by merger, consolidation, or acquisition of stock or all or substantially all of the assets or any other business combination) or make any loan to or investment in any corporation, partnership, other business organization (or any division thereof), except for the acquisitions set forth on Section 5.01(e) of the Company Disclosure Schedule; (ii) issueexcept for borrowings under existing revolving credit facilities, sellincur any indebtedness for borrowed money or issue any debt securities or assume, pledge, dispose of guarantee or encumber any additional shares ofendorse, or securities convertible otherwise become responsible for, the obligations of any person; (iii) enter into or exchangeable for, amend any Material Contract (or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding Contract that would be a Material Contract if in existence on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability), other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeemwith respect to any fiscal quarter, purchase authorize, or otherwise acquire directly make any commitment to incur in such quarter, capital expenditures for such quarter for which a third party is not obligated to reimburse the Company or indirectly any one of its Subsidiaries that in the aggregate exceed by 10% the aggregate amount of the capital stockexpenditures budget of the Company and the Subsidiaries for such quarter (a copy of which has been previously provided to Parent) or (v) incur any material Lien on any material asset of the Company or its Subsidiaries (other than Permitted Liens);
(df) the Company shall not: (i) grant any increase in the compensation payable or to become payable by or the Company benefits provided to any of its executive officers; (ii)(A) adopt any newcurrent or former directors, officers or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with oremployees, except for increases in accordance with the existing written policies cash compensation of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except officers and employees in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assumegrant any retention, guaranteeseverance or termination pay to, endorse or otherwise become liable enter into any employment, bonus, change of control or responsible severance or other agreement or transaction with, any current or former director, officer or other employee of the Company or of any Subsidiary or any Affiliate thereof; (whether directlyiii) establish, contingently adopt, enter into, terminate or otherwise) amend any collective bargaining agreement or Plan, or establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan or a collective bargaining agreement if it were in existence as of the date of this Agreement, for the obligations benefit of any director, officer or employee except as required by Law; or (iv) loan or advance any money or other Personproperty to any current or former director, except officer or employee of the Company or the Subsidiaries, except, in the case of the matters described in clauses (i) and (ii), (x) in connection with the hiring of new employees who are not directors or executive officers in the ordinary course of business and consistent (y) in connection with past practice; the promotion of employees who are not directors or executive officers (iiiand who will not be directors or executive officers after such promotion) in the ordinary course of business;
(g) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business or except as required by applicable Law, make, change or rescind any material Tax election, file any amended Tax Return, enter into any closing agreement relating to Taxes, waive or extend the statute of limitations in respect of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business) or settle or compromise any material income Tax liability;
(h) make any change to its methods of accounting, except as required by changes in GAAP or in applicable Law;
(i) fail to maintain in full force and consistent with past practiceeffect the existing insurance policies covering the Company and the Subsidiaries and their respective properties, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Companyassets and businesses;
(j) settle (x) any Action other than settlements involving not more than $5,000,000 in the Company shall aggregate (net of insurance proceeds) and that do not adopt a plan of complete require any actions or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization impose any material restrictions on the business or other reorganization operations of the Company and its Subsidiaries or (other than the Merger);y) any Action involving any holder or group of holders of Shares; or
(k) the Company shall not takeannounce an intention, enter into any formal or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend informal agreement or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of make a court of competent jurisdiction; and
(m) the Company shall not enter into an agreementcommitment, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Bright Horizons Family Solutions Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees thatUnless Parent shall otherwise agree in writing, (i) except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only in in, and the Company shall not take any action except in, the ordinary course of business and usual course andin a manner consistent with past practice and in accordance with applicable law; and the Company shall use commercially reasonable efforts to preserve intact the business organization of the Company, to keep available the extent consistent therewithservices of the current officers, employees and consultants of the Company and to preserve the current relationships of the Company with, and the goodwill of, customers, suppliers and other Persons with which the Company has significant business relations. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, the Company shall use not, between the date of this Agreement and the Effective Time, directly or indirectly do any of the following without the prior written consent of Parent:
(a) amend or otherwise change its best reasonable efforts Certificate of Incorporation or Bylaws, except for an amendment to preserve its business organization intact and maintain its Certificate of Incorporation limiting dividends payable on Company Preferred Stock or an amendment to increase the authorized capital of the Company solely to satisfy existing relations with customersdividend obligations; provided, suppliersin each case, employees, creditors and business partnersthat such amendment may not in any way adversely affect the ability of the Merger to be treated as a pooling of interests;
(b) except for the Company will not, directly or indirectly, (i) except upon exercise issuance of stock options or other rights to purchase shares of Company Common Capital Stock pursuant to upon the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtcurrently outstanding Options or Stock Purchase Rights and except for grants of options to new employees with an exercise price equal to the then current fair market value determined in good faith by the Board of Directors of the Company, in a manner consistent with past practice and in a manner which does not adversely affect the ability of the Merger to be treated as a pooling of interests, issue, sell, transfer contract to issue or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, grant, encumber or securities convertible into authorize the issuance, sale, pledge, disposition, grant or exchangeable for, or options, warrants, calls, commitments or rights Encumbrance of any kind to acquire, (i) any shares of capital stock of any class of the Company, (ii) any options, warrants, convertible securities or other than rights of any kind to acquire any shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose ofsuch capital stock, or encumber any assets other than in the ordinary and usual course of business and consistent with past practiceownership interest (including, or incur or modify without limitation, any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (ivphantom interest) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable underCompany, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies ordinary course of the Companybusiness, grant any severance or termination pay to any officer, director or employee assets of the Company;
(ec) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock or other securities, property or otherwise, with respect to any Company Capital Stock, except pursuant to the Company shall not modifyCertificate of Incorporation as a result of the transactions contemplated hereby;
(d) reclassify, amend combine, split, subdivide, redeem, purchase or terminate otherwise acquire, directly or indirectly, any of its material contracts capital stock or waiveother securities, release except pursuant to rights of repurchase or assign refusal with respect to employees or directors pursuant to currently outstanding agreements identified on the Disclosure Schedule which would not adversely affect the ability of the Merger to be treated as a pooling of interests;
(e) (i) acquire (including, without limitation, by merger, consolidation or acquisition of stock or assets) any corporation, partnership, other business organization or division thereof or, except in the ordinary course of business, any material rights amount of assets; (ii) incur any indebtedness for borrowed money or claimsissue 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 and consistent with past practice;
practice not in excess of $50,000 and except for equipment lease financings not to exceed $250,000 in the aggregate and capital expenditures made in accordance with a written budget agreed to by Parent that references this section of this Agreement; (fiii) enter into any contract or agreement other than in the Company shall ordinary course of business, consistent with past practice and the value of which does not permit exceed $500,000; (iv) authorize any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchasercapital expenditure, except in the ordinary course of business and consistent with past practice;
, in excess of $50,000 or make aggregate capital expenditures in excess of $250,000; (gv) enter into any purchasing or other similar agreement in which the cash obligation of the Company exceeds $100,000 or which shall not (i) incur terminate or assume any long-term debt, or, except in the ordinary course of business, incur be subject to termination for convenience upon 30 days' or assume any short-term indebtedness in amounts not consistent with past practiceless notice; (iivi) assume, guarantee, endorse license any Technology or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other PersonIP Rights, except in the ordinary course of business and consistent with past practice; or (iiivii) other than ordinary course expense advancesenter into or amend any contract, make agreement, commitment or arrangement with respect to any loansmatter set forth in this Section 6.1(e);
(f) increase the compensation payable or to become payable to its officers, advances employees, agents or capital contributions consultants, or grant any severance or termination pay to, or investments inenter into or amend any employment or severance agreement with, any director, officer or other Person; employee of the Company, or (iv) establish, adopt, enter into or amend any Employee Benefit Plan, compensation, stock option, employment, severance, benefit or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(g) make any material commitment change with respect to accounting methods or transaction policies or procedures (including, but not limited towithout limitation, any borrowing, capital expenditure or purchase, sale or lease procedures with respect to the payment of assets or real estateaccounts payable and collection of accounts receivable);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt or settle or compromise any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessmentliability;
(i) the Company shall not pay, discharge or satisfy any claimsmaterial claim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such business and consistent with past practice of claims, liabilities and obligations reflected or obligationsreserved against in the Company Balance Sheet or incurred in the ordinary course of business and consistent with past practice since the date of the Company Balance Sheet, or prepay any obligation having a fixed maturity of more than 90 days from the date such obligation was issued or incurred;
(j) write down the value of any inventory (including write-downs by reason of shrinkage or markdown) or write off as uncollectible any notes or accounts receivable, except for write-downs and write-offs that are in the aggregate less than $100,000, incurred in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) sell, transfer or otherwise dispose of any of its properties or assets (real, personal or mixed, tangible or intangible) with an aggregate net book value in excess of $50,000, except the sale of inventory in the ordinary course of business and consistent with past practice;
(l) except for transactions that are not material in the aggregate, loan or advance any amount to, or sell, transfer or lease any properties or assets (real, personal or mixed, tangible or intangible) to, or enter into any agreement or arrangement with, any of the Company's officers, directors or employees or any affiliate of the Company's officers, directors or employees, except (i) directors' fees and compensation paid to officers and employees at rates not exceeding the rates of compensation disclosed on Schedule 2.16 of the Disclosure Memorandum, (ii) travel or similar expenses advanced to employees in connection with their employment duties in the ordinary course of business, and (iii) agreements and arrangements that are expressly provided to be entered into with such persons under the terms of this Agreement;
(m) take any action, other than the execution of this Agreement or consummation of the transactions contemplated hereby, that would result in loss of or contract cancellation by any current customer, supplier or licenser of the Company, which loss or contract cancellation would result in lost annual revenues to the Company shall not takeof at least $1,000,000;
(n) forgive or cancel any indebtedness or waive any claims or rights of material value (including, without limitation, any indebtedness owing by any stockholder, officer, director, employee or agree to commit to take, affiliate of the Company);
(o) knowingly take any action that would, would or is reasonably likely toto result in any of the representations or warranties of the Company set forth in this Agreement being untrue in any material respect, result or in any covenant of the Company set forth in this Agreement being breached, or in any of the conditions to the Merger set forth specified in Article VII IV not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;; or
(lp) the Company shall not redeem the Rights agree, whether in writing or terminateotherwise, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Advanced Digital Information Corp)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) except Except as described on the DISCLOSURE SCHEDULE or as otherwise expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and Effective Time, unless Parent shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):otherwise agree in writing:
(a) the The business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the with past practices.
(b) The Company shall use its commercially reasonable best reasonable efforts to preserve its intact in all material respects the business organization intact of the Company, to keep available the services of its officers and maintain its existing relations employees and to preserve the goodwill of those having business relationships with customers, suppliers, employees, creditors and business partners;it.
(bc) the The Company will not, directly or indirectly, shall not (i) except upon exercise amend its certificate of stock options incorporation or other rights by-laws; (ii) split, combine, reclassify or take similar action with respect to purchase shares any of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtits capital stock; (iii) authorize for issuance, issue, sell, transfer or pledge deliver or agree or commit to sellissue, transfer sell or pledge deliver any treasury additional shares, or rights of any kind to acquire any shares (whether through the granting or issuance of options, warrants, commitments, subscriptions, rights to purchase or otherwise), of its capital stock of any class or any other securities or equity equivalents (including without limitation stock appreciation rights), other than Shares issuable upon the exercise of Company beneficially owned by itOptions outstanding on the date hereof; (iv) purchase, redeem or otherwise acquire any Shares or any other securities of the Company; (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (iv) declare, set aside or pay any dividend or other distribution payable in cash, stock or property or make any other distributions with respect to Shares or any other shares of its capital stockstock of any class; (vi) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization of the Company; or (vii) make any commitment to do any of the foregoing.
(d) The Company shall not (i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or make any investment in any other person, either by purchase of stock or securities, contribution to capital, property transfer or purchase of any material amount of property or assets; (ii) issueother than sales of inventory and manufactured goods in the ordinary course of its business consistent with past practices, sell, pledgelease, grant any security interest in or otherwise dispose of or encumber any additional shares of, material amount of its assets or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereofproperties; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber incur any assets indebtedness for borrowed money other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except borrowings in the ordinary course of business and consistent with past practice;
under existing lines of credit (f) or under any extension or refinancing of such existing lines of credit, PROVIDED that the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee aggregate amount available to be cancelled borrowed thereunder is not increased thereby), or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur issue any debt securities or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise as an accommodation become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practiceperson; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into make any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchasecommitment for additions to plant, sale property or lease equipment constituting capital assets except expenditures pursuant to commitments existing as of assets or real estate);
the date of this Agreement and reflected in Section 5.1 of the DISCLOSURE SCHEDULE and except for such expenditures as do not exceed $250,000 in the aggregate; (h) the Company shall not (iv) change any assumption underlying, or method of the calculating, any bad debt, contingency or other reserve or change any other material accounting methods principles or practices used by it unless required by GAAP(except changes that may be necessary or appropriate in order to comply with a change in generally accepted accounting principles that takes effect after the date of this Agreement); or (iivi) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), ) other than the payment, discharge or satisfaction of any such claims, (A) liabilities or obligations, in the ordinary course of business and consistent with past practicepractices and (B) costs relating to this Agreement and the transactions contemplated hereby; (vii) waive, release, grant or claimstransfer any rights of material value or modify or change in any material respect any existing material license, liabilities lease, contract or obligations reflected or reserved against in, or contemplated by, other document (including without limitation the consolidated financial statements (or the notes thereto) Contracts listed in Section 3.15 of the Company;
DISCLOSURE SCHEDULE); (jviii) the Company shall not adopt a plan of complete make any tax election or partial liquidationsettle or compromise any federal, dissolutionstate, merger, consolidation, restructuring, recapitalization local or other reorganization of the Company foreign tax liability; or (other than the Merger);
(kix) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an any contract, agreement, contract, commitment or arrangement to do any of the foregoingwith respect to, or resolve to authorizedo, recommend, propose or announce an intention to do any of the foregoing.
(e) The Company shall not (i) enter into any new severance or change of control or employment agreement; (ii) amend any existing employment or change of control or severance agreement; (iii) grant any increases in compensation or benefits other than in the ordinary course consistent with past practices; (iv) adopt any new Employee Plan or Benefit Arrangement; (v) make any change in or to any existing Employee Plan or Benefit Arrangement, other than such changes as are required by Law or that, in the opinion of its counsel, are necessary or advisable to maintain the tax-qualified status of such Employee Plan or Benefit Arrangement; (vi) make any grants, awards or distributions under any Employee Plan or Benefit Arrangement, other than in the ordinary course consistent with past practices and those grants, awards or distributions required to be made under such Employee Plans or Benefit Arrangements as in effect on the date of this Agreement; or (vii) make any amendment to any provision of any outstanding grant or award that materially increases the potential cost thereof to the Company except as provided in Section 2.8.
(f) The Company shall use its commercially reasonable best efforts not to cause any of its representations or warranties to become untrue.
Appears in 1 contract
Samples: Merger Agreement (Mc Merger Corp)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, between the date of this Agreement and the Effective Time, unless Parent shall otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business; and the Company shall (i) use its commercially reasonable efforts to preserve substantially intact, the business organization of the Company and the Subsidiaries, taken as a whole, (ii) use its commercially reasonable efforts to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and (iii) use its commercially reasonable efforts to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 and Section 6.01 of the Disclosure Schedule, or (iii) as agreed in writing by neither the PurchaserCompany nor any Subsidiary shall, after between the date hereofof this Agreement and the Effective Time, and prior directly or indirectly, do, or propose to the time the directors do, any of the Purchaser have been elected to and following without the prior written consent of Parent (which consent shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"not be unreasonably withheld, conditioned or delayed):
(a) the business of amend or otherwise change the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnersGoverning Documents or equivalent organizational documents of any Subsidiary;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, grant or securities convertible into or exchangeable forencumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of stock, or any class other ownership interest (including, any phantom interest), of the CompanyCompany or any Subsidiary, other than shares (x) the issuance of Company Common Stock reserved for issuance on the date hereof Shares pursuant to the exercise of Options or Company Equity Awards and Warrants or conversion outstanding as of Voting Debt outstanding on the date hereof; hereof or (iiiy) transfer, lease, license, sell, mortgage, pledge, dispose ofthe sale of Shares pursuant to the exercise or settlement of Company Equity Awards if necessary to effectuate an optionee direction upon exercise or for withholding of Taxes, or encumber any assets other than (ii) except in the ordinary and usual course of business and in a manner consistent with past practice, any assets of the Company or incur any Subsidiary (including Company Owned Intellectual Property and Company Licensed Intellectual Property);
(c) declare, set aside, make or modify pay any indebtedness dividend or other liabilitydistribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent in the ordinary and usual course of business and in a manner consistent with past practice; ;
(d) reclassify, combine, split, subdivide or (iv) redeem, or purchase or otherwise acquire acquire, directly or indirectly indirectly, any of its capital stock;
(de) the Company shall not: (i) acquire (including by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or any material amount of assets; (ii) incur any Indebtedness or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans or advances, or grant any increase security interest in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any newassets, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claimseach case, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as in a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and manner consistent with past practice; (iii) enter into any contract or agreement that contemplates the payment or receipt by the Company or any Subsidiary of an amount in excess of five million dollars ($5,000,000) in any twelve (12) month period, other than in the ordinary course expense advancesof business; (iv) authorize, or make any loans, advances or capital contributions commitment with respect to, (A) any single capital expenditure which is in excess of five million dollars ($5,000,000) or investments in(B) capital expenditures which are, in excess of twenty million dollars ($20,000,000) in any other Personcalendar quarter or sixty million dollars ($60,000,000) in the aggregate for the Company and its subsidiaries taken as a whole; or (ivv) enter into or amend any material contract, agreement, commitment or transaction (including, but not limited to, arrangement with respect to any borrowing, capital expenditure or purchase, sale or lease of assets or real estatematter set forth in this Section 6.01(e);
(hf) increase the Company shall not compensation payable or to become payable or the benefits provided to its directors, officers or employees (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations except for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, increases in the ordinary course of business and in a manner consistent with past practice in salaries, wages, bonuses, incentives or benefits of employees of the Company or any Subsidiary who are not directors of the Company or any Subsidiary), or, except in accordance with agreements existing as of the date hereof, grant any severance or termination pay to, or, except as set forth in Schedule 6.01(f), enter into any employment or severance agreement with, any director, officer or other employee of the Company or of any Subsidiary (except for agreements entered into with new employees in the ordinary course of business consistent with past practice or except for agreements that do not provide for any severance entitlements), or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(g) except as required by applicable Law or changes in U.S. GAAP, or as recommended by the Company’s audit committee upon advice of its independent auditors, in which case the Company shall notify Parent, materially change any of its accounting policies;
(h) make or change any income Tax election or any other material Tax election, change any accounting or Tax accounting method, file any income Tax Return or any amendment to an income Tax Return, or settle or compromise any United States federal, state, local or non-United States income Tax liability in excess of two million dollars ($2,000,000), or enter into any intercompany transaction within the meaning of Treasury Regulation Section 1.1502-13;
(i) amend or modify in any material respect or consent to the termination of any Material Contract, or amend or modify in any material respect or waive or consent to the termination of any material rights of the Company or any Subsidiary thereunder, in each case, other than in the ordinary course of business;
(A) settle any Action other than for monetary damages payable by the Company or any subsidiary not in excess of one million dollars ($1,000,000) individually, or more than ten million dollars ($10,000,000) in the aggregate or (B) commence any Action other than in the ordinary course of business and in a manner consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the permit any material item of Company shall not takeOwned Intellectual Property to lapse or to be abandoned, dedicated, or agree disclaimed, fail to commit to takeperform or make any material applicable filings, any action that wouldrecordings or other similar actions or filings, or is reasonably likely to, result fail to pay all fees and taxes required to maintain and protect its interest in any each and every material item of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummationOwned Intellectual Property;
(l) fail to make in a timely manner any filings with the Company shall not redeem SEC required under the Rights Securities Act or terminate, amend the Exchange Act or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdictionrules and regulations promulgated thereunder; andor
(m) the Company shall not announce an intention, enter into an agreementany formal or informal agreement or otherwise make a commitment, contract, commitment or arrangement to do any of the foregoing. Notwithstanding any provision of this Section 6.01, the Company may take any action (or refrain from taking any action) as required by applicable Law (including changes to authorizeapplicable law occurring subsequent to the date of this Agreement) and as required, recommend, propose permitted or announce an intention to do contemplated by any other provision of the foregoingthis Agreement.
Appears in 1 contract
Samples: Merger Agreement (Navteq Corp)
Conduct of Business by the Company Pending the Merger. The Company covenants After the date hereof and agrees that, (i) except as expressly contemplated by set forth in Section 6.1 of the Company Disclosure Schedule, prior to the Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereofCompany shall, and prior shall cause its Subsidiaries, subject to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):restrictions imposed by applicable law, to:
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve conduct its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice;
(b) not (i) amend or propose to amend its certificate of incorporation or by-laws, (ii) split, combine or incur reclassify its outstanding capital stock, (iii) declare, set aside or modify pay any indebtedness dividend or other liabilitydistribution payable in stock or property, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeemrepurchase, purchase redeem or otherwise acquire directly or indirectly any of its outstanding shares of capital stock;
(c) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of its or its Subsidiaries' capital stock, or any debt or equity securities convertible into, exchangeable for or exercisable for such capital stock, or enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing, except for issuances of Company Common Stock pursuant to the exercise of rights or options outstanding as of the date of this Agreement under the Company Stock Option Plans and Company Warrants outstanding as of the date of this Agreement; Merger Agreement
(d) the Company shall not: not (i) grant incur or become contingently liable with respect to any increase indebtedness for borrowed money, except for borrowings under the credit agreements set forth in the compensation payable or to become payable by Section 6.1(d) of the Company Disclosure Schedule, (ii) redeem, purchase, acquire or offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its executive officers; capital stock or any security convertible into or exchangeable for its capital stock, (ii)(Aiii) adopt make any newacquisition of any assets or businesses or any other capital expenditures other than expenditures for fixed or capital assets in the ordinary course of business, (iv) sell, pledge, dispose of or encumber any assets or businesses other than sales in the ordinary course of business, (v) loan, advance funds or make any investment in or capital contribution to any other Person other than to any Subsidiary, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iiivi) enter into any employment contract, agreement, commitment or severance agreement arrangement with or, except in accordance with the existing written policies respect to any of the Company, grant any severance or termination pay to any officer, director or employee of the Companyforegoing;
(e) use commercially reasonable efforts to (i) preserve intact its business organizations and goodwill, (ii) keep available the services of its present officers and key employees, and (iii) preserve the goodwill and business relationships with customers, suppliers and others having business relationships with the Company shall and not modifyengage in any action, amend directly or terminate any of its material contracts or waiveindirectly, release or assign any material rights or claims, except in with the ordinary course of business and consistent with past practiceintent to adversely impact the transactions contemplated by this Agreement;
(f) the Company shall not permit any use commercially reasonable efforts to maintain with financially responsible insurance policy naming it companies insurance on its tangible assets and its business in such amounts and against such risks and losses as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and are consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Mergertransactions contemplated by this Agreement);
(h) not alter, through merger, liquidation, reorganization, restructuring or any other fashion, the corporate structure or ownership of any of the Company's Subsidiaries;
(i) not enter into any sale, lease or license or suffer to exist any Lien (except for Permitted Liens) in respect of any of its assets, other than (i) Liens securing intercompany indebtedness, (ii) sales or dispositions of property or inventory in the ordinary course of business consistent with past practice, (iii) leases and licenses with a term of less than one year of property in the ordinary course of business consistent with past practice, (iv) leases and licenses with a term of at least one year of property in the ordinary course of business consistent with past practice and (v) sales, leases or licenses with respect to immaterial assets;
(j) except for loans, advances, capital contributions or investments made to a wholly owned Subsidiary of the Company in the ordinary course of business consistent with past practice, not make any loan, advance or capital contribution to, or investments in, any other Person;
(k) except as required by generally accepted accounting principles, not revalue in any material respect any of its assets, including writing down the Company shall not takevalue of inventory or writing-off notes or accounts receivables other than in the ordinary course of business consistent with past practice, or agree to commit to take, change any action that would, method of accounting or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, accounting principles or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummationpractice;
(l) the Company shall except as required by law or as is consistent with past practice, not redeem the Rights make or terminatechange any Tax election, amend change any annual Tax accounting period, adopt or otherwise modify the Rights Agreement prior change any method of Tax accounting, extend or waive any applicable statute of limitations with respect to the consummation Taxes, file any amended Tax Returns, enter into any closing agreement in respect of the Offer unless required any Tax claim, audit or assessment, or surrender any right to do so by order of claim a court of competent jurisdiction; andTax refund, offset or other reduction in Tax liability;
(m) not (i) grant any severance, retention or termination pay to, or amend any existing severance, retention or termination arrangement with, any current or former director, officer or employee of the Company or any of its Subsidiaries, (ii) increase or accelerate the payment or vesting of, benefits payable under any existing severance, retention or termination pay policies or employment agreements, (iii) enter into or amend any employment, consulting, deferred compensation or other similar agreement with any director, officer, consultant or employee of the Company or any of its Subsidiaries, (iv) establish, adopt or amend (except as required by applicable law) any collective bargaining agreement, bonus, profit-sharing, thrift, pension, retirement, post-retirement medical or life insurance, retention, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any present or former director, officer or employee, or any beneficiaries thereof, of the Company or any of its Subsidiaries or (v) increase the compensation, bonus or other benefits payable to any director, officer or employee of the Company or any of its Subsidiaries, except for salary increases as a result of employee promotions in the ordinary course of business consistent with past practice or required by the terms of existing arrangements, policies or agreements set forth in the Company Disclosure Schedule;
(n) (i) submit any new Bid that, if accepted or awarded, is expected by the Company to result in revenue to, or expenditures by, the Company and its Subsidiaries (or, after the Merger, Parent or its Subsidiaries) greater than $100,000,000 (provided that Parent shall not unreasonably withhold or delay its consent to the submission of any such Bid), (ii) submit any new Bid that, if accepted or awarded, is expected by the Company to result in a loss to the Company or its Subsidiaries (or, after the Merger, Parent or its Subsidiaries) greater than $500,000 or (iii) enter into any Government Contract which is expected to result in a loss to the Company or its Subsidiaries (or, after the Merger, Parent or its Subsidiaries) greater than $500,000;
(o) settle or enter into any settlement agreement with respect to any outstanding litigation without the prior written approval of Parent, except that, notwithstanding the foregoing, the Company (i) may settle or enter into any settlement agreement with respect to any outstanding litigation where the amount of such settlement is less than $500,000 and (ii) shall comply with its covenants set forth in Section 6.5(f); or
(p) enter into or authorize an agreement, contract, commitment or arrangement agreement with respect to do any of the foregoingforegoing actions, or commit to authorize, recommend, propose or announce an intention take any action to do effect any of the foregoingforegoing actions.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, unless Parent shall otherwise agree in writing and except as otherwise expressly contemplated by this Agreement, the Option Company shall conduct its business only in, and shall not take any action except in, the ordinary course of business and, except in accordance with this Agreement; and the Company shall use commercially reasonable efforts to preserve substantially intact the business organization of the Company, to keep available the services of the present officers, employees and consultants of the Company and to preserve the present relationships and goodwill of the Company with customers, vendors 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 during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Stockholders AgreementEffective Time, directly or indirectly do, or (ii) as disclosed on Schedule 5.2 propose to do, any of the Disclosure Schedulefollowing without the prior written consent of Parent (which consent, or (iiiin the case of Section 5.1(l) as agreed in writing by the Purchaseronly, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"not be unreasonably withheld):
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use Amend or otherwise change its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnersOrganizational Documents;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issueIssue, sell, pledge, dispose of or encumber any additional shares ofencumber, or securities convertible into authorize the issuance, sale, pledge, disposition or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquireencumbrance of, any shares of capital stock of any class class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including any phantom interest) in the Company, other than except for the issuance of shares of Company Common Stock reserved for issuance on issuable pursuant to Stock Options or Restricted Stock Units that are outstanding as of the date hereof pursuant to the exercise and are as of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; , or before the Effective Time become, vested and/or exercisable in accordance with their terms;
(iiic) transferSell, leasepledge, license, sell, mortgage, pledge, dispose of, of or encumber any assets other than (including Company IP Rights) of the Company, except for: (i) sales of inventories in the ordinary and usual course of business (ii) dispositions of obsolete or worthless assets and (iii) sales of immaterial assets not in excess of $100,000 in the aggregate;
(i) Declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of capital stock of any class, (ii) split, combine or reclassify any shares of capital stock or (iii) purchase, repurchase, redeem or otherwise acquire any shares of capital stock;
(i) Acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise become responsible whether directly, indirectly, contingently or otherwise for the obligations of any Person or, except in the ordinary course of business consistent with past practice, make any loans or incur advances or modify contributions or investments in any indebtedness Person; (iii) enter into or other liabilityamend any Material Contract or otherwise waive, other than release or assign any material rights, claims or benefits thereunder; (iv) authorize any capital expenditures for purchase of fixed assets which are, in the ordinary and usual course aggregate, in excess of business and consistent with past practice$25,000; or (ivv) redeem, authorize any expenditures for purchase or otherwise acquire directly or indirectly of inventory which are in excess of $50,000 for any of its capital stock;individual purchase order.
(df) the Company shall not: (i) grant any increase in Increase the compensation payable or to become payable by the Company or pay or agree to pay any of its executive bonuses to its’ directors, officers, employees, consultants or agents; (ii)(Aii) adopt grant any newseverance or termination pay to, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with orany director, except in accordance with the existing written policies of the Company, grant any severance officer or termination pay to any officer, director or other employee of the Company;
; (eiii) the Company shall not modifyestablish, adopt, enter into, amend or terminate any of its material contracts collective bargaining, bonus, profit sharing, thrift, compensation, stock option, pension, retirement, deferred compensation, employment, termination, severance or waiveother plan, release agreement, trust, fund, policy or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) arrangement for the obligations benefit of any other Personcurrent or former directors, except in the ordinary course of business and consistent with past practiceofficers or employees; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into take any material commitment action to accelerate the vesting or transaction payment, or fund or in any other way secure the payment, of compensation or benefits under any Plan, to the extent not already provided in any such Plan; (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (iv) change any of actuarial or other assumptions used to calculate funding obligations with respect to any Plan or to change the accounting methods used by it unless manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (iivi) other than related forgive any loans to a QEF Electiondirectors, make officers or employees of the Company, except, in each case, as may be required by law;
(g) Take any action to change accounting policies, methods, principles, practices or procedures (including procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable) or change any current practices or procedures relating to payments of accounts payable and collection of accounts receivable;
(h) Make any material Tax election, change tax election inconsistent with past practice or settle or compromise any material Tax election already madefederal, adopt any material Tax accounting methodstate, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim local or assessment foreign tax liability or consent agree to any material Tax claim or assessment or any waiver an extension of the a statute of limitations for any such material claim or assessmentlimitations;
(i) the Company shall not payPay, discharge or satisfy any claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in accordance with the terms of any such claimsagreement or debt instrument existing at the date of this Agreement, liabilities or obligations, otherwise in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Companybusiness;
(j) the Company shall not adopt a plan of complete Settle or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization compromise any pending or other reorganization threatened Actions for an amount payable by or on behalf of the Company (other than in excess of $250,000 individually or in the Merger)aggregate;
(k) Make any loans or advances to officers, directors, employees, consultants, shareholders or agents of the Company shall not takeCompany, or agree to commit to take, any action that would, or is reasonably likely to, result in member of the families of any of them, except for advances to employees for reasonable business expenses in the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty ordinary course of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummationbusiness;
(l) Cause or permit the Company shall not redeem to approve any deviation from the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation operating and capital budget of the Offer unless required to do so by order Company attached as Part 5.1 of a court the Disclosure Schedule (the “Company Budget”) of: (i) more than $25,000 in the aggregate from the amount of competent jurisdictionany marketing expenses set forth in the Company Budget; andor (ii) 10% or greater from any other line item or budget category in the Company Budget; or
(m) the Company shall not enter into an agreementTake, contractor agree in writing or otherwise to take, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any actions described in subsections (a) through (l) of the foregoingthis Section 5.1.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants agrees that during the period from the date of this Agreement and agrees thatthe Effective Time, (i) unless Parent shall otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner substantially consistent with past practice or as expressly contemplated by this Agreement or Section 5.01 of the Disclosure Schedule, and the Company shall use its reasonable best efforts to preserve substantially intact the business organization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with material customers, material suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 Section 5.01 of the Disclosure Schedule, or (iii) as agreed in writing by neither the PurchaserCompany nor any Subsidiary shall, after between the date hereof, of this Agreement and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will notEffective Time, directly or indirectly, (i) except upon exercise of stock options do, or other rights propose to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtdo, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, following without the prior written consent of Parent:
(iia) amend or otherwise change its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding SharesBy-laws;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iib) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable forgrant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of stock, or any class other ownership interest (including, without limitation, any phantom interest), of the Company, other than shares Company or any Subsidiary (except for the issuance of Company Common Stock reserved for issuance on the date hereof a maximum of 1,303,814 Shares issuable pursuant to the exercise of Options or Warrants or conversion of Voting Debt employee stock options outstanding on the date hereof; ) or (iiiii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than of the Company or any Subsidiary, except in the ordinary and usual course of business and in a manner consistent with past practice;
(c) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, other than payable in the ordinary and usual course of business and consistent cash, stock, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock, except for dividends by any direct or indirect wholly owned Subsidiary to the Company or any other Subsidiary;
(d) the Company shall not: (i) grant any increase in the compensation payable reclassify, combine, split, subdivide or to become payable by the Company to redeem, or purchase or otherwise acquire, directly or indirectly, any of its executive officers; capital stock (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate provided that the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except Company may acquire “restricted stock” that is forfeited in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Companyits terms);
(e) (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or any amount of assets other than the Company shall not modify, amend acquisition of supplies or terminate any of its material contracts or waive, release or assign any material rights or claims, except inventory in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guaranteeguarantee or endorse, endorse or otherwise become liable or responsible (whether directlyfor, contingently or otherwise) for the obligations of any other Personperson, or make any loans or advances, or grant any security interest in any of its assets except in each case in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advancesauthorize, or make any loanscommitment with respect to, advances any single capital expenditure which is in excess of $25,000 or capital contributions toexpenditures which are, or investments inin the aggregate, any other Personin excess of $100,000 for the Company and the Subsidiaries taken as a whole; or (iv) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 5.01(e);
(f) except as provided in Section 6.13, (i) increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases in the ordinary course of business and consistent with past practice in salaries, wages, bonuses, incentives or benefits of employees of the Company or any Subsidiary who are not directors or officers of the Company or any Subsidiary; (ii) enter into any severance or termination agreements with any director, officer or other employee of the Company or any Subsidiary; (iii) establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(g) except as required by GAAP or the SEC, make any material commitment change in accounting methods, principles or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)practices;
(h) make, revoke or change any election, change annual accounting Tax period, adopt or change any Tax accounting method, file any material federal income Tax Return or material amendment to any federal income Tax Return unless of copies of such federal income Tax Return or material amendment have first been delivered to Parent for its review and comment at a reasonable time prior to filing (provided, however, that notwithstanding the provisions of this Section 5.01(h), the Company shall not (i) change be required to delay any of required filing with the accounting methods used by it unless required by GAAP; IRS or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into applicable tax authority beyond such filing’s due date),enter in any closing agreement, settle any material Tax claim or assessment relating to the Company or any of its Subsidiaries, surrender any right to claim or assessment of Taxes, consent to any material extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any waiver Subsidiary, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption or other action would have the effect of increasing the Tax liability of Company or any of the statute of limitations Subsidiaries for any such material claim period ending after the Effective Time or assessmentdecreasing any Tax attribute of Company or any of the Subsidiaries existing on the Effective Time;
(i) the Company shall not pay, discharge or satisfy any claimsclaim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or of claims, liabilities or obligations reflected or reserved against inin the 2005 Balance Sheet or subsequently incurred in the ordinary course of business, or contemplated by(B) the payment, discharge or satisfaction of claims, liabilities or obligations not in excess of $25,000 individually or $50,000 in the consolidated financial statements (or the notes thereto) of the Companyaggregate;
(j) amend, modify or consent to the Company shall not adopt a plan termination of complete any Material Contract, or partial liquidationamend, dissolutionwaive, merger, consolidation, restructuring, recapitalization modify or other reorganization consent to the termination of any material rights of the Company (or any Subsidiary thereunder, in a manner adverse in any material respect to the Company or any Subsidiary, other than in the Merger)ordinary course of business and consistent with past practice;
(k) commence or settle any Action, other than the Company shall settlement of Actions for an aggregate amount not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any excess of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation$50,000;
(l) the Company shall engage in any line of business not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do consistent with any of the foregoingCompany’s current lines of business or abandon any existing line of business;
(i) permit any material Owned Intellectual Property to lapse or to be abandoned, dedicated, or disclaimed, fail to authorizeperform or make any applicable filings, recommendrecordings or other similar actions or filings, propose or fail to pay all commercially reasonable or required fees and taxes to maintain and protect its interest in any material Owned Intellectual Property, Licensed Intellectual Property, License or Company IT Systems, (ii) sell, assign or grant any security interest in or to any material Owned Intellectual Property, Licensed Intellectual Property, License or Company IT Systems, other than sales of non exclusive licenses therein in the ordinary course of business, (iii) grant to any third party any license with respect to any material Owned Intellectual Property, Licensed Intellectual Property or Company IT Systems, other than in the ordinary course of business or (iv) disclose, or authorize to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof;
(n) fail to file with the SEC in a timely manner as required under the Exchange Act and the rules and regulations promulgated thereunder (provided that any filing that is deemed timely filed pursuant Rule 12b-25 under the Exchange Act shall be deemed timely filed for this purpose) annual reports on Form 10-K, quarterly reports on Form 10-Q or Current Reports on Form 8-K required to be filed to report matters prescribed by Sections 1.03, 2.01, 2.02, 3.01, 3.02, 3.03, 4.01, 4.02(b), 5.01, 5.02, 5.03, 5.04 or 5.05 of Form 8-K; or
(o) announce an intention intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Natus Medical Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees thatPrior to the Effective Time, (i) except unless Parent or Acquisition Corp. shall otherwise agree in writing or as expressly otherwise contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date")::
(ai) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, course;
(ii) the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
not (bA) the Company will not, directly or indirectlyindirectly redeem, (i) except upon exercise of stock options purchase or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge otherwise acquire or agree to sellredeem, transfer purchase or pledge otherwise acquire any treasury stock shares of the Company beneficially owned by it, its capital stock; (iiB) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; By-laws except to effectuate the transactions contemplated in the Supplement or (iiiC) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) Stock or declare, set aside or pay any dividend or other distribution payable in cash, stock or property or make any distribution with respect to its capital any such stock; ;
(iiiii) issue, sell, pledge, dispose of the Company shall not (A) issue or encumber agree to issue any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments warrants or rights of any kind to acquire, acquire any shares of capital stock of any class of the Companyof, other than Company Stock, except to issue shares of Company Common Stock reserved for issuance on the date hereof pursuant in connection with any matter relating to the exercise Supplement (B) acquire or dispose of Options any fixed assets or Warrants acquire or conversion dispose of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any other substantial assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officersbusiness; (ii)(AC) adopt incur additional Indebtedness or any new, other liabilities or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except other transaction other than in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (ivD) enter into any material contract, agreement, commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change arrangement with respect to any of the accounting methods used by it unless required by GAAPforegoing; or (iiE) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required except as contemplated by GAAPthis Agreement, enter into any closing contract, agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do dissolve, merge, consolidate or enter into any other material business combination;
(iv) the Company shall use its best efforts to preserve intact the business organization of the Company, to keep available the service of its present officers and key employees, and to preserve the good will of those having business relationships with it;
(v) the Company will not, nor will it authorize any director or authorize or permit any officer or employee or any attorney, accountant or other representative retained by it to, make, solicit, encourage any inquiries with respect to, or engage in any negotiations concerning, any Acquisition Proposal (as defined below). The Company will promptly advise Parent orally and in writing of any such inquiries or proposals (or requests for information) and the substance thereof. As used in this paragraph, "Acquisition Proposal" shall mean any proposal for a merger or other business combination involving the Company or for the acquisition of a substantial equity interest in it or any material assets of it other than as contemplated by this Agreement. The Company will immediately cease and cause to be terminated any existing activities, discussions or negotiations with any person conducted heretofore with respect to any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.; and
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, from the date hereof to immediately prior to the Effective Time or earlier termination of this Agreement as provided herein, unless the Parent shall otherwise consent in writing (iwhich consent shall not be unreasonably withheld or delayed) and except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date")::
(a) the business of the The Company shall, and shall be conducted only cause its Subsidiaries to, act and carry on their respective businesses in the ordinary course of business consistent in all material respects with past practice and usual course and, to the extent consistent therewith, the Company shall in compliance with applicable Law and use its best commercially reasonable efforts to preserve its intact in all material respects their current business organization intact organizations, goodwill, rights and maintain its existing relations franchises, keep available the services of their current officers and employees (except for terminations of employees in the ordinary course of business) and preserve their relationships with customers, suppliers, employees, creditors and others having significant business partnersdealings with them;
(b) the The Company shall not and will not, directly or indirectly, not permit any Subsidiary to (i) except upon exercise amend or otherwise change its articles of stock options incorporation or bylaws or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtorganizational documents, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by itas applicable, (ii) amend the terms of any security of the Company or its Restated Certificate of Incorporation or Bylaws or similar organizational documents; Subsidiaries, or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable or payment in cash, stock or property with in respect to of any of its shares of capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of except that the Company, other Company may declare and pay regular quarterly cash dividends in an amount not greater than shares $0.12 per share of Company Common Stock reserved for issuance per quarter on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary payment and usual course of business and record dates consistent with past practice, or incur or modify practice and any indebtedness or other liability, other than in the ordinary and usual course Subsidiary of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or may pay dividends to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee a wholly owned Subsidiary of the Company;
(ec) Neither the Company shall not modify, amend or terminate nor any of its material contracts Subsidiaries shall (i) except as set forth in Section 6.3(c) (other than the issuance of shares of Company Common Stock upon the exercise of Company Share Options outstanding on the date hereof in accordance with their terms in existence as of the date of this Agreement), issue, grant, sell, pledge or waivetransfer or agree or propose to issue, release grant, sell, pledge or assign transfer any shares of capital stock, stock options, warrants, securities or rights of any kind or rights to acquire any such shares, securities or rights of the Company, any of its Subsidiaries or any successor thereto or (ii) enter into or modify any contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) Neither the Company nor any of its Subsidiaries shall incur, assume or guarantee or otherwise become liable for any Indebtedness (directly, contingently or otherwise), or issue or sell any debt securities or warrants or rights to acquire any debt securities of the Company or any of its Subsidiaries or guarantee any debt securities of any other Person or enter into any material rights lease (whether such lease is an operating or claimscapital lease), except for (i) intercompany loans and advances, and (ii) Indebtedness incurred pursuant to any customer contract or vendor contract entered into in the ordinary course of business and consistent with past practice;
(e) Each of the Company and its Subsidiaries shall use commercially reasonable best efforts to keep in place its current insurance policies which are material (either individually or in the aggregate) to the conduct of their business;
(f) Neither the Company nor any of its Subsidiaries shall not permit make any insurance policy naming it as a beneficiary material Tax election, change any material Tax election already made, file any amended Tax Returns or a loss payable payee to be cancelled settle or terminated without notice to the Purchasercompromise any material federal, except in the ordinary course of business and consistent with past practicestate, local or foreign income Tax liability;
(g) Neither the Company nor any of its Subsidiaries shall not make any change in its accounting principles or methods except insofar as may be required by a change in GAAP or change the independent public accountants of the Company and its Subsidiaries;
(h) Neither the Company nor any of its Subsidiaries shall: (x) split, combine or reclassify any capital stock of the Company or any Subsidiary or issue or authorize the issuance of any other securities in respect of, in lieu of or substitution for shares of capital stock of the Company or any Subsidiary; (y) repurchase, redeem or otherwise acquire any shares of the capital stock of the Company or any of its Subsidiaries, or any securities convertible into or exercisable for any shares of the capital stock of the Company or any of its Subsidiaries;
(i) incur Neither the Company nor any of its Subsidiaries shall acquire or assume any long-term debtagree to acquire by merging or consolidating with, oror by purchasing a substantial portion of the stock or assets of, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of by any other Personmanner, except in any business or any corporation, partnership, joint venture, association or other business organization or division thereof;
(j) Neither the ordinary course Company nor any of business and consistent with past practice; (iii) other than ordinary course expense advances, its Subsidiaries shall make any loansloans (or other lending arrangement), advances or capital contributions to, or investments in, any other Person; , except for (i) intercompany loans, advances, contributions to the Company or wholly owned Subsidiaries of the Company, (ivii) enter into any material commitment or transaction investments of less than $500,000 individually and $1,000,000 in the aggregate and (includingiii) short-term investments, but not limited to, any borrowing, capital expenditure or purchase, sale or lease in each case made in the ordinary course of assets or real estate)business consistent with past practice;
(hk) Except as set forth in Item 6.6(k) of the Company shall Disclosure Schedule, the Company will not, and will not (i) change permit any Subsidiary of the Company to, and will not agree to, and will not permit any Subsidiary to agree to, sell, lease, license, mortgage, pledge, assign, swap, grant a right to use, transfer or otherwise encumber or subject to any Lien or otherwise dispose of any of the accounting methods used by it unless required by GAAP; its properties or (ii) assets, other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim properties or assessmentassets the fair market value of which do not exceed $250,000 individually and $1,000,000 in the aggregate on terms no less favorable to the Company or such Subsidiary, as the case may be, than could be reasonably expected to have been obtained with an unaffiliated third party on an arm’s-length basis, except sales of inventory and receivables in the ordinary course of business consistent with past practice;
(il) Neither the Company nor any of its Subsidiaries shall not (x) pay, discharge or satisfy any claimsmaterial claims (including claims of shareholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than except for the payment, discharge or satisfaction of any such claims, (i) liabilities or obligations, obligations in the ordinary course of business and consistent with past practice or in accordance with their terms as in effect on the date hereof, or (ii) claims settled or compromised to the extent expressly permitted by Section 6.6(o), or (y) waive, release, grant, or transfer any rights of material value or modify or change in any material respect any existing material license, lease, contract or other document, other than in the ordinary course of business consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(jm) Neither the Company nor any of its Subsidiaries shall not adopt a plan of complete or partial liquidation, liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization;
(n) Neither the Company nor any of its Subsidiaries shall enter into any collective bargaining agreement or other reorganization agreement with any labor organization, union or association;
(o) Neither the Company nor any of its Subsidiaries shall settle or compromise any litigation (whether or not commenced prior to the date of this Agreement) other than settlements or compromises of litigation where the settlement is limited solely to monetary payment and the release of claims and the amount paid (after giving effect to insurance proceeds actually received) in settlement or compromise does not exceed $100,000, provided that the aggregate amount paid in connection with the settlement or compromise of all such litigation matters shall not exceed $250,000;
(p) Neither the Company nor any of its Subsidiaries shall adopt or amend (except as may be required by Law) any Company Benefit Plan or any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or other arrangement for the benefit or welfare of any employee, director or former director or employee or increase the compensation or fringe benefits of or loan or advance money or other property to any director, employee or former director or employee or pay any benefit not required by any Company Benefit Plan, other than increases in compensation for employees of the Company (other than the Mergerand its Subsidiaries and arrangements for new employees as expressly permitted by Section 6.6(q);
(kq) Neither the Company nor any of its Subsidiaries shall directly or indirectly (1) grant or commit to grant to any employee, officer, shareholder, director, consultant or agent of the Company or any of its Subsidiaries any new or modified severance, change of control, termination, retention or similar arrangement or increase or accelerate any benefits payable under its severance, retention or termination pay policies in effect on the date hereof, (2) increase or commit to increase the compensation of any officer or director of the Company or any of its Subsidiaries, or pay or commit to or pay any bonus, profit sharing or other similar payment to any officer or director of the Company or any of its Subsidiaries, (3) increase or commit to increase the compensation of any employee (other than officers and directors) of the Company or any of its Subsidiaries, or pay or commit to or pay any bonus, profit sharing or other similar payment to such Persons, in each case other than (i) merit increases consistent with past practice (in terms of frequency, timing and amount) or (ii) with respect to employees other than officers and directors, isolated merit salary increases or bonuses not takein the context of any broad-based plan or program, or (4) take any action reasonably within its control to materially increase or decrease the total number of employees of the Company and its Subsidiaries in any functioning department of the Company and its Subsidiaries;
(r) Neither the Company nor any of its Subsidiaries shall make any capital expenditures, other than (i) in connection with the repair or replacement of facilities destroyed or damaged due to casualty or accident (whether or not covered by insurance), (ii) substantially in accordance with the Company’s capital expenditures plan made available to Parent in writing prior to the date of this Agreement, and (iii) additional expenses up to $6,000,000 for the switch-out of Nokia equipment as expressly required by the First Amended and Restated Joint Operating Agreement, dated September 28, 2000, with AT&T (as successor-in-interest to BellSouth Personal Communications, LLC);
(s) Neither the Company nor any of its Subsidiaries shall (i) other than in the ordinary course of business consistent with past practice or as expressly permitted by this Agreement, terminate, renew, amend or modify in any material respect, or fail to enforce any material provision of, any Material Contract or (ii) enter into any Material Contract not in the ordinary course of business consistent with past practice and not terminable by the Company or the Company Subsidiary party thereto without penalty on notice of ninety (90) days or less;
(t) Except as required in connection with the transactions contemplated hereby, in connection with the applications for additional video franchises through the North Carolina Secretary of State or as required by applicable Law with respect to CTC’s participation in NECA Tariff #5, neither the Company nor any of its Subsidiaries shall take any action that will create a requirement to make a filing, registration or application with, or seek the waiver, consent or approval of, the FCC, any State public service or public utilities commission or any other Governmental Entity other than in the ordinary course of business consistent with past practice, or discontinue or withdraw any authorized service or voluntarily relinquish any Company License or institute any proceeding with respect to, or otherwise materially change, amend, or supplement any of its tariffs on file with the FCC or any State public service or public utilities commission, except as required by applicable Law;
(u) Except as expressly permitted by Section 6.8, the Company will not, and will not permit any Subsidiary of the Company to, approve or authorize any action to be submitted to the shareholders of the Company for approval that is intended or would reasonably be expected to, prevent, impede, interfere with, delay, postpone or adversely affect the transactions contemplated by this Agreement;
(v) Neither the Company nor any of its Subsidiaries shall cause or knowingly permit any act, event or change which would reasonably be expected to have a Company Material Adverse Effect;
(w) Except for continuing to develop its video services business, neither the Company nor any of its Subsidiaries shall enter into any new line of business;
(x) Except for continuing to develop its video services business, neither the Company nor any of its Subsidiaries shall make any material change in the present operation, function or components of the network or operations of the Company or its Subsidiaries;
(y) Neither the Company nor any of its Subsidiaries shall effectuate a “plant closing” or “mass layoff,” as those terms are defined in the Worker Adjustment and Retraining Notification Act of 1988 (“WARN”), affecting in whole or in part any site of employment, facility, operating unit or employee of the Company or any Subsidiary, without notifying the Parent or its Affiliates in advance and without complying with the notice requirements and other provisions of WARN;
(z) Neither the Company nor any of its Subsidiaries shall take any action or authorize the taking of any action that would directly or indirectly increase in any material respects the value, as reflected in the Financial Statements, of the assets of CTC Long Distance Services, LLC or CTC Video Services, LLC other than in the ordinary course of business consistent with past practice or otherwise as permitted by Section 6.6(r);
(aa) Neither the Company nor any of its Subsidiaries shall enter into or amend any agreement or arrangement of the type that would be required to be disclosed by the Company under Item 404 of Regulation S-K; and
(bb) Neither the Company nor any of its Subsidiaries shall authorize any, or commit or agree to commit do any of the things described in clauses (a) through (aa) or anything which (i) would make any representation or warranty of the Company in this Agreement untrue or incorrect in any material respect as of the date hereof and as of the Effective Time, as if made on such date, except to takethe extent such representations and warranties expressly relate to a specific date (in which case such representations and warranties shall be true and correct as of such date) or (ii) except as expressly permitted in Section 6.8, any action that would, or is would otherwise be reasonably likely to, to result in any of the conditions to the Merger set forth in Article VII Sections 7.1 and 7.3 not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants Unless ShopNow shall otherwise agree in writing and agrees that, (i) except as expressly otherwise contemplated by this Agreement, the Option Agreement or Company and the Stockholders covenant and agree to conduct the Company's business between the date of this Agreement and the Effective Time in and only in, and the Company and the Stockholders shall not take any action except in, the ordinary course of business and in a manner consistent with past practice and in accordance with applicable law; and each of the Company and the Stockholders shall use his or its best efforts to preserve intact the business organization of the Company, to keep available the services of the current officers, employees and consultants of the Company and to preserve the current relationships of the Company with, and the goodwill of, customers, suppliers and other Persons with which the Company has significant business relations. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, the Company and the Stockholders shall not, between the date of this Agreement and the Effective Time, directly or (ii) as disclosed on Schedule 5.2 indirectly do, or propose to do, any of the Disclosure Schedule, or (iii) as agreed in writing by following without the Purchaser, after the date hereof, and prior to the time the directors written consent of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):ShopNow:
(a) amend or otherwise change the business Company's Articles of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnersIncorporation or Bylaws;
(b) except for the Company will not, directly or indirectly, (i) except upon exercise issuance of stock options or other rights to purchase shares of Company Common Stock pursuant to upon the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtcurrently outstanding Stock Purchase Rights, issue, sell, transfer contract to issue or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, grant, encumber or securities convertible into authorize the issuance, sale, pledge, disposition, grant or exchangeable for, or options, warrants, calls, commitments or rights Encumbrance of any kind to acquire, (i) any shares of capital stock of any class of the Company, (ii) any options, warrants, convertible securities or other than rights of any kind to acquire any shares of Company Common Stock reserved for issuance on such capital stock, or any other ownership interest (including, without limitation, any phantom interest) of the date hereof pursuant to the exercise of Options Company, or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than of the Company, except in the ordinary and usual course of business and in a manner consistent with past practice;
(c) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, payable in cash, stock or other than in the ordinary and usual course of business and consistent securities, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable reclassify, combine, split, subdivide, redeem, purchase or to become payable by the Company to otherwise acquire, directly or indirectly, any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, capital stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Companysecurities;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur acquire (including, without limitation, by merger, consolidation, or assume acquisition of stock or assets) any long-term debtcorporation, orpartnership, except in the ordinary course other business organization or division thereof or any material amount of business, incur or assume any short-term indebtedness in amounts not consistent with past practiceassets; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guaranteeguarantee or endorse, endorse or otherwise as an accommodation become liable or responsible (whether directlyfor, contingently or otherwise) for the obligations of any other Person, or make any loans or advances, except in the ordinary course of business and consistent with past practice; (iii) enter into any contract or agreement other than in the ordinary course expense advancesof business, make consistent with past practice; (iv) authorize any loans, advances single capital expenditure which is in excess of $5,000 or capital contributions toexpenditures which are, or investments inin the aggregate, any other Personin excess of $10,000 for the Company taken as a whole; or (ivv) enter into any material agreement in which the obligation of the Company exceeds $5,000 or which shall not terminate or be subject to termination for convenience within 30 days following execution; (vi) license any Technology or IP Rights; or (vii) enter into or amend any contract, agreement, commitment or transaction arrangement with respect to any matter set forth in this subsection (e);
(f) enter into or amend any employment, consulting or agency agreement, or increase the compensation payable or to become payable to its officers, employees, agents or consultants, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company, or establish, adopt, enter into or amend any Employee Benefit Plan, collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance, benefit or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(g) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting methods, policies or procedures (including, but not limited towithout limitation, any borrowing, capital expenditure or purchase, sale or lease procedures with respect to the payment of assets or real estateaccounts payable and collection of accounts receivable);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt or settle or compromise any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessmentliability;
(i) the Company shall not pay, discharge or satisfy any claimsclaim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, take any action that would, would or is reasonably likely toto result in any of the representations or warranties of the Company and the Stockholders set forth in this Agreement being untrue in any material respect, result or in any covenant of the Company or the Stockholders set forth in this Agreement being breached, or in any of the conditions to the Merger set forth specified in Article VII IV not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;; or
(lk) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention agree to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Shopnow Com Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) during the period from the date of this Agreement and continuing until the earlier to occur of the termination of this Agreement or the Effective Time, except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreementunless Parent shall otherwise agree in writing, or (ii) and except as disclosed on Schedule 5.2 set forth in Section 6.01 of the Company Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):Letter:
(a) the Company shall conduct its business of only in, and the Company shall be conducted only in not take any action except in, the ordinary course of business, consistent with past practice; and usual course and, to the extent consistent therewith, the Company shall use its reasonable best reasonable efforts to preserve its intact the business organization intact of the Company, and to maintain (i) the services of the present officers, employees and consultants of the Company and (ii) its existing relations with suppliers, creditors, customers, suppliers, employees, creditors business associates and others having business partners;dealings with it; and
(b) without limiting the generality of the foregoing, the Company will not, directly or indirectly, shall not take any of the following actions:
(i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding SharesBy-Laws;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares ofencumber, or securities convertible into authorize the issuance, sale, pledge, disposition or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquireencumbrance of, any shares of capital stock of any class or any other equity interest, or any options, warrants, convertible securities or other rights of the Company, other than any kind to acquire any shares of capital stock, or any other equity interest in the Company (except for the issuance of shares of Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; );
(iii) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock or any other equity interest, including any constructive or deemed distributions, and any distribution in connection with the adoption of a shareholders rights plan, or make any other payments to stockholders in their capacity as such;
(iv) split, combine or reclassify any of its capital stock or any other equity interest or 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 any other equity interest;
(v) redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or any other equity interests;
(vi) (A) purchase, acquire, sell, transfer, lease, license, sell, mortgage, pledgeencumber or dispose of any material assets; (B) acquire (by merger, dispose ofconsolidation or acquisition of stock or assets or otherwise) any corporation, partnership or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, organization or division thereof; (C) incur or modify assume any indebtedness for borrowed money or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(AD) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts confidentiality agreements, standstill agreements or Company Material Contracts to which the Company is a party or by which it is bound, or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except other than in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (iiE) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except other than in the ordinary course of business and business, consistent with past practice; (iiiF) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (ivG) other than in the ordinary course of business, consistent with past practice, enter into any material commitment commitment, transaction, contract or transaction agreement, including any of the following entered into outside the ordinary course of business (includingi) any material capital expenditure, but (ii) any material contract or agreement outside the ordinary course of business, (iii) any contracts or agreements that cannot limited to, be canceled on notice of thirty (30) days or less and (iv) any borrowing, capital expenditure noncompete agreements or purchase, sale or lease other agreements that limit the ability of assets or real estate)the Company to conduct any line of business;
(hvii) increase the compensation, severance or other benefits payable or to become payable to its directors, officers or employees, other than increases in salary or wages of employees of the Company shall not in accordance with past practice or pursuant to binding commitments made prior to the date hereof, or grant any severance or termination pay (iexcept payments required to be made under the Plans or other obligations existing on the date hereof in accordance with the terms of such obligations) change to, or enter into any employment or severance agreement with, any employee of the accounting methods used by it unless required by GAAP; Company, or (ii) other than related to a QEF Electionestablish, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAPadopt, enter into or amend any closing collective bargaining agreement, settle Plan, trust, fund, policy or arrangement for the benefit of any material Tax claim current or assessment former directors, officers or consent to any material Tax claim or assessment employees or any waiver of the statute of limitations for any such material claim or assessmenttheir beneficiaries, except, in each case, as may be required by law;
(ixxxx) the Company shall not payxxx, xxxxxxxxxx, discharge or satisfy any of its material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and business, consistent with past practice, or pursuant to contractual requirements existing on the date hereof, of claims, liabilities or obligations reflected or reserved against against, in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(jix) the Company shall not adopt a plan take any action to change accounting policies or procedures or any of complete or partial liquidationits methods of reporting income, dissolution, merger, consolidation, restructuring, recapitalization deductions or other reorganization items for income tax purposes, except as required by a change in GAAP, SEC position or applicable law occurring after the date hereof;
(x) approve or authorize any action to be submitted to the stockholders of the Company (for approval other than the Merger)pursuant to this Agreement;
(kxi) the Company shall not takemake or change any material election with respect to Taxes, agree or settle any material claim or assessment in respect of Taxes, or agree to an extension or waiver of the limitation period to any material claim or assessment in respect of Taxes;
(xii) voluntarily take, or commit to take, any action that would, would or is reasonably likely to, to result in any of the conditions to the Tender Offer set forth on ANNEX A or the conditions to the Merger set forth in Article VII 8 not being satisfied, satisfied or would make many any representation or warranty of the Company contained herein that is not qualified as to materiality inaccurate in any material respect, or any representation or warranty that is qualified as to materiality untrue in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company Company, Parent or Purchaser to consummate the Merger transactions contemplated hereunder, in accordance with the terms hereof or materially delay such consummation;
(lxiii) the Company shall not redeem the Rights or terminate, amend wind-up or otherwise modify eliminate the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdictionSpecial Committee; andor
(mxiv) the Company shall not enter into an agreementagree, contract, commitment authorize or arrangement announce to do take any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingactions described in subsections (i) through (xiii) above.
Appears in 1 contract
Samples: Merger Agreement (Peapod Inc)
Conduct of Business by the Company Pending the Merger. (a) The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 7.1, except (i) except as expressly contemplated may be required by this AgreementLaw, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedulemay be consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (iii) as agreed may be expressly permitted or contemplated pursuant to this Agreement or (iv) as set forth in writing by the Purchaser, after the date hereof, and prior to the time the directors Section 5.1(a) of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 Company Disclosure Letter, (the "Appointment Date"):
(ax) the business of the Company and its subsidiaries shall be conducted only in the ordinary course of business and usual course andin a manner consistent with past practice in all material respects, (y) it shall use its reasonable best efforts to keep available the extent consistent therewithservices of the current executive 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 each of the distributors, franchisees, customers, suppliers and other persons with whom the Company or any of its subsidiaries has material business relations and (z) the Company shall use not and shall not permit any of its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customerssubsidiaries to:
(i) amend, suppliersrestate, employeeswaive or otherwise change, creditors and business partnersin any material respect, the Certificate of Incorporation or the Bylaws (or the equivalent organizational or governing documents of any of the Company’s subsidiaries);
(bii) except for transactions solely among the Company and its wholly owned subsidiaries or among the Company’s wholly owned subsidiaries, issue, sell, pledge, transfer, dispose, encumber or grant any shares of, or economic interest of a nature accruing to holders of, its or its subsidiaries’ capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its subsidiaries’ capital stock; provided, however, that (A) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase may issue shares of Company Common Stock upon the exercise, vesting or settlement of any Company Equity Award issued and outstanding as of the Measurement Date or as may be granted after the date hereof in accordance with Section 5.1(a)(ii)(B) pursuant to the Option Plans outstanding on terms thereof and (B) the Company may issue shares of its capital stock, or options, warrants, convertible securities or other rights to acquire shares of its capital stock (including Company Equity Awards) required pursuant to each employment agreement or offer letter as in effect as of the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock and set forth on Section 5.1(a)(ii) of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding SharesDisclosure Letter;
(c) the Company shall not: (iiii) declare, set aside aside, authorize, make or pay any dividend or other distribution distribution, payable in cash, stock stock, property or property otherwise, with respect to the Company’s or any of its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of subsidiaries’ capital stock or set any record date thereof, other than dividends paid by any subsidiary of the Company to the Company or any class wholly owned subsidiary of the Company, other than shares ;
(iv) except as required pursuant to the terms of Company Common Stock reserved for issuance on Benefit Plans as in effect as of the date hereof pursuant or as otherwise required by Law, (A) increase the compensation or other benefits payable or to become payable to current or former employees, directors or officers of the exercise Company or any of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; its subsidiaries, except for increases in cash compensation to employees (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than officers and directors) in the ordinary and usual course of business and consistent with past practice, (B) grant any incentive compensation opportunity or incur pay any incentive compensation or modify pay or agree to pay any indebtedness pension, retirement, allowance, severance, change of control or other liabilitytermination pay to, or enter into any severance, change of control or similar agreement with, any current or former employees, directors, or officers of the Company or any of its subsidiaries, other than in the ordinary and usual course of business consistent with past practice to employees (other than officers and directors), (C) enter into any employment, consulting, bonus, retention, retirement or similar agreement with any employee, officer or director of the Company (including any change to performance targets associated therewith), except for (I) signing and/or retention bonuses payable to non-officer employees in an amount that may range between $10,000 and $25,000 per individual, not to exceed $150,000 in the aggregate and (II) employment agreements terminable on less than thirty (30) days’ notice without penalty, (D) establish, adopt, enter into or amend any collective bargaining agreement, plan, trust, fund, policy or arrangement for the benefit of any current or former employees, directors or officers or any of their beneficiaries, except, in each case, such action with respect to current or former employees that would not result in an increase to the Company in the cost of maintaining such collective bargaining agreement, plan, trust, fund, policy or arrangement; (E) amend or adopt any Company Benefit Plans (other than any such adoption or amendment that does not increase the cost to the Company of maintaining such Company Benefit Plan) or (F) accelerate the vesting or payment of or take any action to fund, any compensation or benefit (including any Company Equity Awards); provided, however, that the Company and its subsidiaries may enter into or amend employment and consulting arrangements with, employees and individual independent consultants (other than officers and directors) in connection with promotions, new hires or engagements in the ordinary course of business consistent with past practice; ;
(v) take any action to cause to be exercisable any otherwise unexercisable Company Option under any Company Plan (except as provided by this Agreement in connection with the consummation of the transactions contemplated by this Agreement pursuant to Company Benefit Plans as in effect as of the date hereof);
(vi) acquire (including by merger, consolidation, or (iv) redeemacquisition of stock or substantially all of the assets), purchase except in respect of any merger, consolidation, business combination among the Company and its wholly owned subsidiaries or otherwise acquire directly among the Company’s wholly owned subsidiaries which would not result in a material increase in the Tax Liability of the Company or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable undersubsidiaries, any existing bonuscorporation, incentive compensationpartnership, deferred compensationlimited liability company, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement other business organization or other employee benefit plan, agreement any division or arrangement; or (iii) enter into any employment or severance agreement with ormaterial amount of assets thereof, except in accordance with the existing written policies respect to purchases of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except inventory and other assets in the ordinary course of business and consistent with past practice;
(fvii) except for borrowings under the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee Company’s existing credit facilities (which credit facilities have been disclosed to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of businessParent), incur or assume modify the terms of any short-term material indebtedness in amounts not consistent with past practice; (ii) for borrowed money, or assume, guaranteeguarantee or endorse, endorse or otherwise as an accommodation become liable or responsible (whether directlyfor, contingently or otherwise) for the obligations of any other Personperson, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, or make any loans, advances or capital contributions toto any other person (other than a subsidiary of the Company or acquisitions permitted by clause (e) above), in each case, other than (a) pursuant to letters of credit in the ordinary course of business consistent with past practice, or investments in(b) any commodity, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchasecurrency, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Electionhedging agreements, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligationsin each case, in the ordinary course of business and consistent with past practicepractice and which (I) can be terminated on ninety (90) days or less notice without penalty or (II) expire no later than ninety (90) days from the date of such agreement;
(viii) (a) enter into or become bound by any agreement that, if entered into prior to the date hereof, would be a Company Material Contract, other than in the ordinary course of business consistent with past practice which agreement has a term no longer than one (1) year and can be terminated by the Company without material penalty upon notice of ninety (90) days or less, and would not have, individually or in the aggregate, a Company Material Adverse Effect, (b) modify or amend, or claimsgrant any release or relinquish any material rights under, liabilities any Company Material Contract or obligations reflected or reserved against in(c) terminate any Company Material Contract, or contemplated by, other than business terminations in the consolidated financial statements (or the notes thereto) ordinary course of business that do not result in material penalty to the Company;
(jix) make any material change to its methods of accounting in effect at December 31, 2011, except (A) as required by a change in GAAP (or any interpretation thereof), Regulation S-X promulgated by the SEC or a Governmental Authority or quasi-Governmental Authority (including the Financial Accounting Standards Board or any similar organization), (B) to permit the audit of the Company’s financial statements in compliance with GAAP or (C) as required by a change in applicable Law;
(x) reclassify, combine, split or subdivide any of its capital stock;
(xi) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock, other than (A) the acquisition by the Company shall of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Options in order to pay the exercise price of the Company Option, (B) the withholding or disposition of shares of Company Common Stock to satisfy withholding Tax obligations with respect to awards granted pursuant to the Company Plans, (C) the acquisition by the Company in the ordinary course of business consistent with past practice in connection with terminated employees of Company Equity Awards in connection with the forfeiture of such awards pursuant to the terms of the Company Plans and in any event at a price per share not in excess of the fair market value of such award or the Offer Price and (D) the acquisition by the trustee of the 401(k) Plan maintained by the Company of shares of Company Common Stock in order to satisfy participant elections under the 401(k) Plan maintained by the Company;
(xii) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company recapitalization, merger (other than the Merger), consolidation or other reorganization (other than reorganizations involving wholly owned subsidiaries of the Company which would not result in a material increase in the Tax liability of the Company or any of its subsidiaries);
(kxiii) (A) assign, sell, transfer, license or sublicense, mortgage, abandon or encumber any (I) material Company IP, except for non-exclusive licenses or non-exclusive sublicenses of such Company IP in the ordinary course of business consistent with past practice or (II) any other material properties or assets, other than sales of inventory, assignments of leases or sub-leases, in each case, in the ordinary course of business consistent with past practice or equipment that is no longer used or useful in the operations of the Company or its subsidiaries, or (B) fail to pay any fee, take any action, protect any trade secret, or make any filing reasonably necessary to maintain its ownership of the material Company IP;
(xiv) enter into any new line of business outside of the Company’s and its subsidiaries’ existing business;
(xv) settle any claim or Proceeding, in each case made or pending against the Company or any of its subsidiaries, other than the settlement of claims or Proceedings in the ordinary course of business consistent with past practice that require payments by the Company or any of its subsidiaries (net of insurance proceeds) in an amount not to exceed, individually or in the aggregate, $1,000,000; provided, that the settlement of any Proceeding related to this Agreement or the transactions contemplated hereby shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any require consent hereunder except as set forth on Section 5.1(a)(xv) of the conditions to Company Disclosure Letter or apply toward the Merger aggregate basket set forth in Article VII not being satisfiedthis Section 5.1(a)(xv);
(xvi) make any capital expenditures, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger other than (A) in accordance with the terms hereof or materially delay Company’s capital expenditure plan as set forth on Section 5.1(a)(xvi) of the Company Disclosure Letter, and (B) otherwise in an aggregate amount for all such consummationcapital expenditures made pursuant to this clause (B) not to exceed $3,000,000;
(lxvii) the Company shall not redeem the Rights (i) make, change or terminaterescind (or file a request to make, amend change or otherwise modify the Rights Agreement prior rescind) any material Tax election, (ii) settle or compromise any material Tax liability, audit claim or assessment, (iii) surrender any right to the consummation claim for a material Tax refund, (iv) change in any material respect (or file a request to make any such change) any accounting method in respect of Taxes, (v) file any material amendment to a Tax Return, (vi) enter into any closing agreement, settle or compromise any material claim or material assessment in respect of Taxes, or (vii) consent to any extension or waiver of the Offer unless statute of limitations applicable to any claim or assessment in respect of Taxes, except, in each case, as required to do so by order of a court of competent jurisdiction; andapplicable Law;
(mxviii) implement any employee layoffs that implicate the Company shall not enter into an agreement, contract, commitment WARN Act; or
(xix) agree or arrangement commit to do take any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingactions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
Appears in 1 contract
Samples: Merger Agreement (MModal Inc.)
Conduct of Business by the Company Pending the Merger. (a) The Company covenants and agrees that, (i) between the date of this Agreement and the Effective Time, except as expressly contemplated by any other provision of this Agreement or any Ancillary Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed unless Constellation shall otherwise consent in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):writing:
(ai) the business businesses of the Company and the Company Subsidiaries shall be conducted only in in, and the Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business and usual course in a manner consistent with past practice; and, to the extent consistent therewith,
(ii) the Company shall use its reasonable best reasonable efforts to preserve its substantially intact the business organization intact of the Company and maintain its existing relations the Company Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Company Subsidiaries and to preserve the current relationships of the Company and the Company Subsidiaries with customers, suppliers, employees, creditors Suppliers and other persons with which the Company or any Company Subsidiary has significant business partners;relations.
(b) By way of amplification and not limitation, except as expressly contemplated by any other provision of this Agreement or any Ancillary Agreement, neither the Company will notnor any Company Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Constellation:
(i) except upon exercise amend or otherwise change its certificate of stock options incorporation or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof by-laws or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar equivalent organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, grant or securities convertible into or exchangeable forencumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of the Company or any Company Subsidiary, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of stock, or any class other ownership interest (including, without limitation, any phantom interest), of the CompanyCompany or any Company Subsidiary or (ii) any assets of the Company or any Company Subsidiary; except, other than with respect to the clause (i), the Company may issue (1) shares of Company Common Stock reserved for issuance on the date hereof pursuant to upon the exercise of Company Options or Warrants or conversion of Voting Debt outstanding on the date hereof; of this Agreement, (iii2) transferone or more convertible promissory notes having an aggregate principal amount of up to $3,000,000 (the “Interim Convertible Notes”), leaseand (3) shares of Company Common Stock upon the conversion of the Convertible Notes and the Interim Convertible Notes, licenseand with respect to clause (ii), sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and in a manner consistent with past practice;
(iii) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, other than payable in the ordinary and usual course of business and consistent cash, stock, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock;
(div) the Company shall not: (i) grant any increase in the compensation payable reclassify, combine, split, subdivide or to become payable by the Company to redeem, or purchase or otherwise acquire, directly or indirectly, any of its executive officers; capital stock;
(ii)(Av) adopt any new(A) acquire (including, without limitation, by merger, consolidation, or acquisition of capital stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or any material amount of assets; (B) amend or otherwise increase, or accelerate the payment or vesting acquire any capital stock of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangementperson; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (iC) incur any indebtedness for borrowed money or assume issue any long-term debt, or, except in the ordinary course of business, incur debt securities or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guaranteeguarantee or endorse, endorse or otherwise become liable or responsible (whether directlyfor, contingently or otherwise) for the obligations of any other Personperson, or make any loans or advances, or grant any security interest in any of its assets except (1) in connection with the issuance of the Interim Convertible Notes, and (2) in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (ivD) enter into or amend any material contract, agreement, commitment or transaction arrangement with respect to any matter set forth in this Section 5.01(b) (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estateexcept those matters expressly excluded);
(hvi) hire any additional employees or consultants except in the Company shall not (i) change ordinary course of business or to fill current vacancies or vacancies arising after the date of this Agreement due to the termination of any employee’s employment or consultant’s services, or increase the compensation payable or to become payable or the benefits provided to its directors or officers, except for increases in the ordinary course of the accounting methods used by it unless required by GAAP; business and consistent with past practice or (ii) other than related to a QEF Electiongrant any severance or termination pay to, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, or enter into any closing agreementemployment, settle consulting or severance agreement with, any material Tax claim director or assessment or consent to any material Tax claim or assessment or any waiver officer of the statute Company or of limitations for any such material claim or assessmentCompany Subsidiary;
(ivii) adopt, amend or terminate any Plan except as required by applicable Law;
(viii) exercise its discretion with respect to or otherwise voluntarily accelerate the vesting of any Company Warrants as a result of the Merger, any other change in control of the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise);
(ix) take any action, other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or claimsprocedures, liabilities other than as required by GAAP;
(x) make any material tax election or obligations reflected settle or reserved against incompromise any material United States federal, state, local or non-United States income tax liability;
(xi) amend, modify or consent to the termination of any Material Contract, or contemplated byamend, waive, modify or consent to the consolidated financial statements (or the notes thereto) termination of the Company’s or any Company Subsidiary’s material rights thereunder, except in the ordinary course of business;
(jxii) enter into any agreement that, if existing on the Company shall not adopt date of this Agreement, would be a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger)Material Contract;
(kxiii) the permit any material item of Company shall not takeIntellectual Property Rights to lapse or to be abandoned, invalidated, dedicated, or agree to commit to take, any action that woulddisclaimed, or is reasonably likely tootherwise become unenforceable or fail to perform or make any applicable filings, result recordings or other similar actions or filings, or fail to pay all required fees and taxes required or advisable to maintain and protect its interest in each and every material item of Company Intellectual Property Rights;
(xiv) amend, modify or consent to the termination of any of the conditions Lease Documents, or amend, waive, modify or consent to the Merger set forth in Article VII not being satisfiedtermination of the Company’s, or would make many representation or warranty of the any Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;Subsidiary’s material rights thereunder; or
(lxv) the Company shall not redeem the Rights announce an intention, enter into any formal or terminate, amend informal agreement or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of make a court of competent jurisdiction; and
(m) the Company shall not enter into an agreementcommitment, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Constellation Alpha Capital Corp.)
Conduct of Business by the Company Pending the Merger. The Company covenants agrees that during the period from the date of this Agreement and agrees thatthe Effective Time, (i) unless Parent shall otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner substantially consistent with past practice or as expressly contemplated by this Agreement or Section 5.01 of the Disclosure Schedule, and the Company shall use its reasonable best efforts to preserve substantially intact the business organization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with material customers, material suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 Section 5.01 of the Disclosure Schedule, or (iii) as agreed in writing by neither the PurchaserCompany nor any Subsidiary shall, after between the date hereof, of this Agreement and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will notEffective Time, directly or indirectly, (i) except upon exercise of stock options do, or other rights propose to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtdo, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, following without the prior written consent of Parent:
(iia) amend or otherwise change its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding SharesBy-laws;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iib) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable forgrant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of stock, or any class other ownership interest (including, without limitation, any phantom interest), of the Company, other than shares Company or any Subsidiary (except for the issuance of Company Common Stock reserved for issuance on the date hereof a maximum of 1,303,814 Shares issuable pursuant to the exercise of Options or Warrants or conversion of Voting Debt employee stock options outstanding on the date hereof; ) or (iiiii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than of the Company or any Subsidiary, except in the ordinary and usual course of business and in a manner consistent with past practice;
(c) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, other than payable in the ordinary and usual course of business and consistent cash, stock, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock, except for dividends by any direct or indirect wholly owned Subsidiary to the Company or any other Subsidiary;
(d) the Company shall not: (i) grant any increase in the compensation payable reclassify, combine, split, subdivide or to become payable by the Company to redeem, or purchase or otherwise acquire, directly or indirectly, any of its executive officers; capital stock (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate provided that the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except Company may acquire “restricted stock” that is forfeited in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Companyits terms);
(e) (i) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or any amount of assets other than the Company shall not modify, amend acquisition of supplies or terminate any of its material contracts or waive, release or assign any material rights or claims, except inventory in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guaranteeguarantee or endorse, endorse or otherwise become liable or responsible (whether directlyfor, contingently or otherwise) for the obligations of any other Personperson, or make any loans or advances, or grant any security interest in any of its assets except in each case in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advancesauthorize, or make any loanscommitment with respect to, advances any single capital expenditure which is in excess of $25,000 or capital contributions toexpenditures which are, or investments inin the aggregate, any other Personin excess of $100,000 for the Company and the Subsidiaries taken as a whole; or (iv) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 5.01(e);
(f) except as provided in Section 6.13, (i) increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases in the ordinary course of business and consistent with past practice in salaries, wages, bonuses, incentives or benefits of employees of the Company or any Subsidiary who are not directors or officers of the Company or any Subsidiary; (ii) enter into any severance or termination agreements with any director, officer or other employee of the Company or any Subsidiary; (iii) establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(g) except as required by GAAP or the SEC, make any material commitment change in accounting methods, principles or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)practices;
(h) make, revoke or change any election, change annual accounting Tax period, adopt or change any Tax accounting method, file any material federal income Tax Return or material amendment to any federal income Tax Return unless of copies of such federal income Tax Return or material amendment have first been delivered to Parent for its review and comment at a reasonable time prior to filing (provided, however, that notwithstanding the provisions of this Section 5.01(h), the Company shall not (i) change be required to delay any of required filing with the accounting methods used by it unless required by GAAP; IRS or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAPapplicable tax authority beyond such filing’s due date), enter into in any closing agreement, settle any material Tax claim or assessment relating to the Company or any of its Subsidiaries, surrender any right to claim or assessment of Taxes, consent to any material extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company or any waiver Subsidiary, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax, if such election, adoption or other action would have the effect of increasing the Tax liability of Company or any of the statute of limitations Subsidiaries for any such material claim period ending after the Effective Time or assessmentdecreasing any Tax attribute of Company or any of the Subsidiaries existing on the Effective Time;
(i) the Company shall not pay, discharge or satisfy any claimsclaim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or of claims, liabilities or obligations reflected or reserved against inin the 2005 Balance Sheet or subsequently incurred in the ordinary course of business, or contemplated by(B) the payment, discharge or satisfaction of claims, liabilities or obligations not in excess of $25,000 individually or $50,000 in the consolidated financial statements (or the notes thereto) of the Companyaggregate;
(j) amend, modify or consent to the Company shall not adopt a plan termination of complete any Material Contract, or partial liquidationamend, dissolutionwaive, merger, consolidation, restructuring, recapitalization modify or other reorganization consent to the termination of any material rights of the Company (or any Subsidiary thereunder, in a manner adverse in any material respect to the Company or any Subsidiary, other than in the Merger)ordinary course of business and consistent with past practice;
(k) commence or settle any Action, other than the Company shall settlement of Actions for an aggregate amount not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any excess of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation$50,000;
(l) the Company shall engage in any line of business not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do consistent with any of the foregoingCompany’s current lines of business or abandon any existing line of business;
(i) permit any material Owned Intellectual Property to lapse or to be abandoned, dedicated, or disclaimed, fail to authorizeperform or make any applicable filings, recommendrecordings or other similar actions or filings, propose or fail to pay all commercially reasonable or required fees and taxes to maintain and protect its interest in any material Owned Intellectual Property, Licensed Intellectual Property, License or Company IT Systems, (ii) sell, assign or grant any security interest in or to any material Owned Intellectual Property, Licensed Intellectual Property, License or Company IT Systems, other than sales of non exclusive licenses therein in the ordinary course of business, (iii) grant to any third party any license with respect to any material Owned Intellectual Property, Licensed Intellectual Property or Company IT Systems, other than in the ordinary course of business or (iv) disclose, or authorize to be disclosed, any confidential Intellectual Property, unless such Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof;
(n) fail to file with the SEC in a timely manner as required under the Exchange Act and the rules and regulations promulgated thereunder (provided that any filing that is deemed timely filed pursuant Rule 12b-25 under the Exchange Act shall be deemed timely filed for this purpose) annual reports on Form 10-K, quarterly reports on Form 10-Q or Current Reports on Form 8-K required to be filed to report matters prescribed by Sections 1.03, 2.01, 2.02, 3.01, 3.02, 3.03, 4.01, 4.02(b), 5.01, 5.02, 5.03, 5.04 or 5.05 of Form 8-K; or
(o) announce an intention intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees thatUnless Amazxx.xxx xxxll otherwise agree in writing, (i) except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted in and only in in, and the Company shall not take any action except in, the ordinary course of business and usual course andin a manner consistent with past practice and in accordance with applicable law; and the Company shall use commercially reasonable efforts to preserve intact the business organization of the Company, to keep available the extent consistent therewithservices of the current officers, employees and consultants of the Company and to preserve the current relationships of the Company with, and the goodwill of, customers, suppliers and other Persons with which the Company has significant business relations. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, the Company shall use not, between the date of this Agreement and the Effective Time, directly or indirectly do any of the following without the prior written consent of Amazxx.xxx:
(a) amend or otherwise change its best reasonable efforts Articles of Incorporation or Bylaws, other than to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnerseffect a change in the Company's corporate name;
(b) except for the Company will not, directly or indirectly, (i) except upon exercise issuance of stock options or other rights to purchase shares of Company Common Capital Stock pursuant to upon the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtcurrently outstanding Stock Purchase Rights, issue, sell, transfer contract to issue or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, grant, encumber or securities convertible into authorize the issuance, sale, pledge, disposition, grant or exchangeable forEncumbrance of (i) any assets of the Company, or optionsexcept in the ordinary course of business and in a manner consistent with past practice, warrants, calls, commitments or rights of any kind to acquire, (ii) any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transferany options, leasewarrants, license, sell, mortgage, pledge, dispose ofconvertible securities or other rights of any kind to acquire any shares of 57 such capital stock, or encumber any assets other than in ownership interest (including, without limitation, any phantom interest) of the ordinary and usual course of business and consistent with past practiceCompany;
(c) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, payable in cash, stock or other than in the ordinary and usual course of business and consistent securities, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock;
(d) the Company shall not: reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other securities;
(i) grant any increase in the compensation payable or to become payable acquire (including, without limitation, by the Company to any of its executive officers; (ii)(A) adopt any newmerger, consolidation, or (Bacquisition of stock or assets) amend any corporation, partnership, other business organization or otherwise increase, division thereof or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course amount of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practiceassets; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guaranteeguarantee or endorse, endorse or otherwise as an accommodation become liable or responsible (whether directlyfor, contingently or otherwise) for the any obligations of any other Person, or make any loans or advances, except in the ordinary course of business and consistent with past practice; (iii) enter into any contract or agreement other than in the ordinary course expense advancesof business, make consistent with past practice; (iv) authorize any loans, advances single capital expenditure which is in excess of $20,000 or capital contributions toexpenditures which are, or investments inin the aggregate, any other Personin excess of $50,000 for the Company taken as a whole; or (ivv) enter into any material agreement in which the obligation of the Company exceeds $10,000 or which shall not terminate or be subject to termination for convenience within 30 days following execution; (vi) license any Technology or IP Rights; or (vii) enter into or amend any contract, agreement, commitment or transaction arrangement with respect to any matter set forth in this subsection (e);
(f) enter into or amend any employment, consulting or agency agreement, or increase the compensation payable or to become payable to any of its officers, employees, agents or consultants, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance, benefit, Employee Benefit Plan or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; provided, however, that the Company shall terminate prior to any enrollment thereunder and prior to the Closing Date its Code section 401(k) plan;
(g) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to 58 accounting methods, policies or procedures (including, but not limited towithout limitation, any borrowing, capital expenditure or purchase, sale or lease procedures with respect to the payment of assets or real estateaccounts payable and collection of accounts receivable);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt or settle or compromise any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessmentliability;
(i) the Company shall not pay, discharge or satisfy any claimsclaim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, take any action that would, would or is reasonably likely toto result in any of the representations or warranties of the Company set forth in this Agreement being untrue in any material respect, result or in any covenant of the Company set forth in this Agreement being breached, or in any of the conditions to the Merger set forth specified in Article VII IV hereof not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;; or
(lk) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention agree to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Amazon Com Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees thatUnless ImageX shall otherwise agree in writing, (i) except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted in and only in in, and the Company shall not take any action except in, the ordinary course of business and usual course andin a manner consistent with past practice and in accordance with applicable law. The Company shall use commercially reasonable efforts to preserve intact the business organization of the Company, to keep available the extent consistent therewithservices of the current officers, employees and consultants of the Company and to preserve the current relationships of the Company with, and the goodwill of, customers, suppliers and other Persons with which the Company has significant business relations. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, the Company shall use not, between the date of this Agreement and the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of ImageX:
(a) amend or otherwise change its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnersArticles of Incorporation or Bylaws;
(b) except for the Company will not, directly or indirectly, (i) except upon exercise issuance of stock options or other rights to purchase shares of Company Common Stock pursuant to upon the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtcurrently outstanding Options, Warrants, or Convertible Notes, issue, sell, transfer contract to issue or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, grant, encumber or securities convertible into authorize the issuance, sale, pledge, disposition, grant or exchangeable for, or options, warrants, calls, commitments or rights Encumbrance of any kind to acquire, (i) any shares of capital stock of any class of the Company, (ii) any options, warrants, convertible securities or other than rights of any kind to acquire any shares of Company Common Stock reserved for issuance on such capital stock, or any other ownership interest (including, without limitation, any phantom interest) of the date hereof pursuant to the exercise of Options Company, or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in of the ordinary and usual course of business and consistent with past practiceCompany;
(c) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, payable in cash, stock or other than in the ordinary and usual course of business and consistent securities, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable reclassify, combine, split, subdivide, redeem, purchase or to become payable by the Company to otherwise acquire, directly or indirectly, any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, capital stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Companysecurities;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur acquire (including, without limitation, by merger, consolidation, or assume acquisition of stock or assets) any long-term debtcorporation, orpartnership, except in the ordinary course other business organization or division thereof or any material amount of business, incur or assume any short-term indebtedness in amounts not consistent with past practiceassets; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guaranteeguarantee or endorse, endorse or otherwise as an accommodation become liable or responsible (whether directlyfor, contingently or otherwise) for the obligations of any other Person, or make any loans or advances, except in the ordinary course of business and consistent with past practice; (iii) enter into any contract or agreement other than in the ordinary course expense advancesof business, make consistent with past practice; (iv) authorize any loans, advances single capital expenditure which is in excess of $10,000 or capital contributions toexpenditures which are, or investments inin the aggregate, any other Personin excess of $20,000 for the Company taken as a whole; or (ivv) enter into any material agreement in which the obligation of the Company exceeds $10,000 or which shall not terminate or be subject to termination for convenience within 30 days following execution; (vi) license any Technology or IP Rights, except nonexclusive licenses to end users of the Company's products granted in the ordinary course of the Company's business, consistent with past practice; or (vii) enter into or amend any contract, agreement, commitment or transaction arrangement with respect to any matter set forth in this subsection (e);
(f) enter into or amend any employment, consulting or agency agreement, or increase the compensation payable or to become payable to its officers, employees, agents or consultants, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company, or establish, adopt, enter into or amend any Employee Benefit Plan, collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance, benefit or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(g) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting methods, policies or procedures (including, but not limited towithout limitation, any borrowing, capital expenditure or purchase, sale or lease procedures with respect to the payment of assets or real estateaccounts payable and collection of accounts receivable);
(h) take any action that would prevent ImageX from being able to account for the Company shall Merger as a pooling of interests whether or not (i) change any permitted by the provisions of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessmentthis Article VI;
(i) the Company shall not make any Tax election or settle or compromise any Tax liability;
(j) pay, discharge or satisfy any claimsclaim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, take any action that would, would or is reasonably likely toto result in any of the representations or warranties of the Company set forth in this Agreement being untrue in any material respect, result or in any covenant of the Company set forth in this Agreement being breached, or in any of the conditions to the Merger set forth specified in Article VII IV not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation take any action of the Offer unless required to do so by order of a court of competent jurisdictiontype covered in Section 2.7 above; andor
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention agree to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Imagex Com Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees thatPrior to the Effective Time, (i) except unless Parent or Acquisition Subsidiary shall otherwise agree in writing or as expressly otherwise contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):Additional Agreements:
(a) the business The Business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnerscourse;
(b) the The Company will not, directly or indirectly, shall not (i) except upon exercise of stock options directly or other rights to indirectly redeem, purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge otherwise acquire or agree to sellredeem, transfer purchase or pledge otherwise acquire any treasury stock of the Company beneficially owned by it, its Common Stock; (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; except to effectuate the transactions contemplated in this Agreement or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) Common Stock or declare, set aside or pay any dividend or other distribution payable in cash, stock equity or property or make any distribution with respect to its capital stock; any such Common Stock;
(iic) issue, sell, pledge, dispose of The Company shall not (i) issue or encumber agree to issue any additional shares of, or securities convertible into or exchangeable forCommon Stock, or options, warrants, calls, commitments warrants or rights of any kind to acquire, acquire any shares of capital stock Common Stock; (ii) acquire or dispose of any class fixed assets or acquire or dispose of the Company, any other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any substantial assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practicebusiness; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) incur additional Indebtedness or any other liabilities or enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except other transaction other than in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material contract, agreement, commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change arrangement with respect to any of the accounting methods used by it unless required by GAAP; foregoing or (iiv) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required except as contemplated by GAAPthis Agreement, enter into any closing contract, agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do dissolve, merge, consolidate or enter into any other material business combination;
(d) The Company shall use its commercially reasonable efforts to preserve intact the business organization of the foregoingCompany, to keep available the service of its present officers and key employees, and to preserve the good will of those having business relationships with it;
(e) The Company will not, nor will it authorize any director or authorize or permit any officer or employee or any attorney, accountant or other representative retained by it to make, solicit, encourage any inquiries with respect to, or to authorizeengage in any negotiations concerning, recommendany Acquisition Proposal (as defined below for purposes of this paragraph). The Company will promptly advise Parent orally and in writing of any such inquiries or proposals (or requests for information) and the substance thereof. As used in this paragraph, propose or announce an intention to do any of the foregoing.“
Appears in 1 contract
Samples: Merger and Share Exchange Agreement (Future Healthcare of America)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, between the date of this Agreement and the Effective Time, unless Parent shall otherwise consent in writing (isuch consent not to be unreasonably delayed or withheld) and except as expressly contemplated by for actions taken or omitted for the purpose of complying with this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business businesses of the Company and the Subsidiaries shall be conducted only in the ordinary course of business and usual course andin a manner consistent with the Company's current business plan, to the extent consistent therewith, and the Company shall use its reasonable best reasonable efforts to preserve its intact the business organization intact of the Company to keep available the services of the current officers, employees and maintain its existing relations consultants of the Company and to preserve the current relationships of the Company with customers, supplierssuppliers and other Persons with which the Company has business relations. By way of amplification and not limitation, employeesexcept as expressly contemplated by this Agreement and Section 6.1 of the Disclosure Schedule, creditors the Company shall not, between the date of this Agreement and business partnersthe Effective Time, directly or indirectly, do any of the following without the prior written consent of Parent:
(a) amend or otherwise change its Certificate of Incorporation or By-laws or equivalent organizational documents;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, license, dispose of or encumber any additional shares of, grant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (A) any shares of any class of capital stock of the Company or any Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary, or (B) except in the ordinary course of business, except the issuance of Shares pursuant to the exercise of Company Stock Options or pursuant to the ESPP or pursuant to the Warrants or the Convertible Notes, any property or assets of the Company or any Subsidiary, (ii) modify any Company Stock Options outstanding on the date of this Agreement, or (iii) accelerate the of vesting or other benefit of any option, share or award whether or not pursuant to the Company Stock Option Plans, other than in accordance with the express terms of such option, share or award as in effect immediately prior to the date of this Agreement;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for dividends by any direct or indirect wholly owned Subsidiary to the Company or any other Subsidiary;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock (or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, exercisable for any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) except for acquisitions of restricted stock held by employees of the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any and its Subsidiaries upon termination of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Companyemployment;
(e) the Company shall not modify(i) acquire (including, amend without limitation, by merger, consolidation, or terminate acquisition of stock or assets or any other business combination) any interest in any corporation, partnership, other business organization or Person or any division thereof or any significant amount of its material contracts or waive, release or assign any material rights or claimsassets, except in the ordinary course of business and in a manner consistent with past practice;
the Company's current business plan; (fii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the Company shall not permit obligations of any insurance policy naming it as a beneficiary Person, or a loss payable payee to be cancelled make any loans, investments, capital contributions or terminated without notice to the Purchaser, except advances; (iii) enter into any material contract or agreement other than in the ordinary course of business and in a manner consistent with past practicethe Company's current business plan; (iv) authorize any capital expenditure in excess of $500,000 in the aggregate except to the extent consistent with the Company's existing business plan; or (v) enter into or amend any material contract, agreement, commitment or arrangement with respect to any matter prohibited by this Section 6.1(e);
(gf) increase the Company shall not (i) incur compensation payable or assume any long-term debtto become payable or the benefits provided to its directors, orofficers, employees, agents or other representatives, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except increases in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advancesin salaries or wages of employees of the Company or any Subsidiary or, make except as otherwise provided pursuant to the terms of agreements in effect on January 1, 2001, grant any loans, advances severance or capital contributions termination pay to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited tonew severance agreement with, any borrowingdirector, capital expenditure officer, employee, agent or purchaseother representative of the Company or of any Subsidiary, sale or lease enter into any employment agreement with any director, officer, employee, agent or other representative (other than with a newly hired employee) of assets the Company or real estate)any Subsidiary, or establish, adopt, enter into or amend (except as may be required by Law) any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(hg) the Company shall not (i) change any of the accounting methods used by it unless except as required by GAAP; applicable Law or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by U.S. GAAP, enter into take any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)action, other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies, practices or claims, liabilities or obligations reflected or reserved against inprocedures;
(h) incur any material obligation to make any payment of, or contemplated byin respect of, any Tax, take or cause to be taken any action would prevent the Company from filing a consolidated financial statements (federal Tax Return for the year ending September 30, 2001, except in the ordinary course of business, make or change any Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any amended Tax Returns or claims for Tax refunds, enter into any closing agreement, surrender, settle or compromise any material Tax claim, liability, audit or assessment, surrender any right to claim any material Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the notes thereto) limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing in any material respect the Tax liability or reducing any Tax asset of the Company;
(i) amend, modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's material rights thereunder, except for amendments, modifications or consents which are not materially adverse to the Company's rights and expected benefits under any such Material Contract;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);settle any material Action; or
(k) the Company shall not takepublicly announce an intention, enter into any formal or agree to commit to take, any action that would, informal agreement (oral or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(lwritten) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of make a court of competent jurisdiction; and
(m) the Company shall not enter into an agreementcommitment, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants During the period from the date of this Agreement and agrees that, (i) except as expressly contemplated by continuing until the earlier of the termination of this Agreement, the Option Agreement or the Stockholders AgreementEffective Time, or (ii) as disclosed on Schedule 5.2 of other than the Disclosure ScheduleInvestor Recapitalization, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only agrees to carry on its business in the usual, regular and ordinary course and usual course in substantially the same manner as previously conducted, to pay its debts and Taxes, including Permitted Tax Distributions, when due (subject to good faith disputes over such debts or Taxes), to pay or perform other obligations when due and, to the extent consistent therewithwith such business, the Company shall to use its best all commercially reasonable efforts consistent with past practices and policies to preserve intact its present business organization intact organization, keep available the services of its present officers and maintain key employees and consultants and preserve its existing relations relationships with customers, suppliers, employeesdistributors, creditors licensors, licensees, and others having business partners;
(b) dealings with it, to the end that its goodwill and ongoing businesses would be substantially identical at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business of the Company. By way of amplification and not limitation, except as specifically contemplated by this Agreement or as specifically set forth in Section 6.01 of the Company will Disclosure Schedule, the Company shall not, between the date of this Agreement and the Effective Time, directly or indirectly, (i) except upon exercise of stock options do, or other rights propose to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtdo, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by itfollowing, other than the Investor Recapitalization, without the prior written consent, which consent shall not be unreasonably withheld, of Parent:
(iia) amend its Restated Certificate of Incorporation or Bylaws otherwise change the Company Charter Documents or similar equivalent organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iib) issue, sell, pledge, dispose of or encumber any additional shares of, grant, encumber, authorize or securities convertible into propose the issuance, sale, pledge, disposition, grant or exchangeable forencumbrance of any shares of its capital stock of any class, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of or any class other ownership interest (including, without limitation, any phantom interest), of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof except pursuant to the exercise terms of Options options, warrants or Warrants or conversion of Voting Debt preferred stock outstanding on the date hereof; of this Agreement;
(iiic) transfersell, lease, license, sell, mortgage, pledge, dispose ofgrant, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly dispose of any of its capital stockproperties or assets which are material, individually or in the aggregate, to its business;
(d) split, combine, subdivide, redeem or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or purchase or otherwise acquire, directly or indirectly, any shares of its equity interests except from former employees, managers, directors and consultants in accordance with agreements providing for the repurchase of shares in connection with any termination of service by such party;
(e) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest or any assets in any corporation, partnership, other business organization or any division thereof;
(f) institute or settle any Legal Proceeding for an amount greater than $100,000, except as related to Legal Proceedings disclosed in Section 3.10 of the Company shall not: Disclosure Schedule;
(g) 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 obligations of any person, or make any loans or advances other than such indebtedness described herein and to be included on the Estimated Closing Balance Sheet;
(h) authorize any unbudgeted capital expenditure in excess of $100,000, individually or in the aggregate;
(i) grant enter into any lease or contract for the purchase or sale of any property, real or personal, other than as permitted by subparagraph 6.01(h) above, in an amount greater than $50,000 on an annual basis;
(j) waive or release any material right or claim;
(k) except as set forth on Schedule 6.01(k) as it relates to increases in compensation for persons covered herein to the extent the person has or is expected to have a material increase in duties, responsibilities and authority, and/or has received a documented promotion, increase, or agree to increase, the compensation payable payable, or to become payable payable, to its (i) officers or (ii) employees (provided that any employee’s annual compensation may be increased by the Company an amount not to any exceed 10% of its executive officers; (ii)(A) adopt any newsuch employee’s current annual base salary), or (B) amend grant any severance or otherwise increasetermination pay to, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with, any of its managers, officers or other employees, other than the modified terms of employment which will be reflected in the employment agreements with orMessrs. Nxxx, except in accordance with Cxxxxxxx and Cxxx as contemplated by the existing written policies of the CompanyInvestor Recapitalization, grant or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or termination pay other Plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; provided, however, that the foregoing provisions of this subsection shall not apply to any officer, director or amendments to employee benefit plans described in Section 3(3) of the CompanyERISA that may be required by Law;
(el) accelerate, amend or change the period of exercisability or the vesting schedule of restricted stock or Company Options granted under any option plan, employee stock plan or other agreement or authorize cash payments in exchange for any Company Options granted under any of such plans, except as specifically required by the terms of such plans or any such agreement or any related agreement in effect as of the date of this Agreement and disclosed in the Company shall not modifyDisclosure Schedule;
(m) extend any offers of employment to potential employees, consultants or independent contractors or terminate any existing employment relationships for which the annual remuneration is greater than $200,000;
(n) enter into, amend or terminate any Material Contract other than the repayment of its material contracts the outstanding amount of the Members’ Subordinated Debt prior to any consummation of the Investor Purchase Agreement;
(o) enter into, amend or waiveterminate any contract, release agreement, commitment or assign any material rights or claimsarrangement that, except if fully performed, would not be permitted under this Section 6.01;
(p) other than in the ordinary course of business and consistent with past practice, enter into any licensing, distribution, OEM agreements, sponsorship, advertising, merchant program or other similar contracts, agreements or obligations that may not be cancelled without penalties by the Company upon notice of 30 days or less;
(fq) take any action, other than reasonable and usual action in the ordinary course of business, consistent with past practice, with respect to accounting policies, principles or procedures;
(r) other than as may be directly related to the Investor Recapitalization, make or change any Tax or accounting election, change any annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the Company, surrender any right to claim refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company, but in no event take any other action or omit to take any action that would have the effect of increasing the Tax liability of the Company shall or Parent;
(s) (i) sell, assign, lease, terminate, abandon, transfer, permit to be encumbered or otherwise dispose of or grant any security interest in and to any item of the Company Intellectual Property, in whole or in part, (ii) grant any license with respect to any Company Intellectual Property, other than a license of Software granted to customers of the Company to whom the Company licenses such Software in the ordinary course of business, (iii) develop, create or invent any Intellectual Property jointly with any third party, or (iv) disclose, or allow to be disclosed, any confidential Company Intellectual Property, unless such Company Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof;
(t) make (or become obligated to make) any bonus payments to any of its officers or employees except: (1) for those for which the Company is simultaneously fully reimbursed or (2) between the execution date hereof and the Effective Time, bonus payments to certain employees not covered by the Incentive Plan in an amount not to exceed an aggregate of $500,000;
(u) except as permitted by GAAP, revalue any of its assets, including writing down the value of inventory or writing off notes or accounts receivable;
(v) fail to maintain its equipment and other assets in good working condition and repair according to the standards it has maintained up to the date of this Agreement, subject only to ordinary wear and tear, unless it is more commercially reasonable to replace any such asset in the ordinary course of Company’s business;
(w) take any action or fail to take any reasonable action that would cause there to be a Company Material Adverse Effect;
(x) permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated and not replaced by a substantially similar replacement policy without notice to the Purchaser, Parent;
(y) except in the ordinary course of business and consistent with past practice;
(g) its business, the Company shall will not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions towrite off as uncollectible, or investments in, establish any other Person; or (iv) enter into any material commitment or transaction (including, but not limited extraordinary reserve with respect to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization account receivable or other reorganization right of the Company (other than to customer remittances for services in excess of $150,000 with respect to a single matter, or in excess of $450,000 in the Merger);aggregate; or
(kz) the Company shall not take, or agree to commit in writing or otherwise to take, any action that wouldof the actions described in subsections (a) through (y) above, or any action which is reasonably likely to, result in to make any of the conditions Company’s representations or warranties contained in this Agreement untrue or incorrect on the date made (to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, extent so limited) or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Agreement and Plan of Merger (JK Acquisition Corp.)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) except Except as expressly otherwise contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 in Section 6.1 of the Company Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, hereof and prior to the time Closing Date or earlier termination of this Agreement, unless Parent shall otherwise agree in writing, the directors of the Purchaser have been elected to Company shall, and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):cause its subsidiaries, to:
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than conduct their respective businesses in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(db) the Company shall not: not (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increasepropose to amend their respective charters or by-laws, (ii) split, combine or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, reclassify their outstanding capital stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into declare, set aside or pay any employment dividend or severance agreement with ordistribution payable in cash, stock, property or otherwise, except in accordance with for the existing written policies payment of the Company, grant any severance dividends or termination pay to any officer, director or employee distributions by a wholly-owned subsidiary of the Company;
(ec) not issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants or rights of any kind to acquire any shares of their capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, except that (i) Company may issue shares upon conversion of convertible securities and exercise of options outstanding on the date hereof and (ii) Company shall may issue shares and warrants to acquire shares pursuant to the proviso of Section 6.1(d) below;
(d) not modify(i) incur or become contingently liable with respect to any indebtedness for borrowed money other than (A) borrowings in the ordinary course of business or (B) borrowings to refinance existing indebtedness on terms which are reasonably acceptable to Parent or (C) except as set forth in this Section 6.1(d), amend (ii) redeem, purchase, acquire or terminate offer to purchase or acquire any shares of its capital stock or any options, warrants or rights to acquire any of its material contracts capital stock or waiveany security convertible into or exchangeable for its capital stock, release (iii) take any action which would jeopardize the treatment of the Merger as a pooling of interests under Opinion No. 16 of the Accounting Principles Board ("APB No. 16"), (iv) take or assign fail to take any material rights action which action or claimsfailure to take action would cause the Company or its stockholders (except to the extent that any stockholders receive cash in lieu of fractional shares) to recognize gain or loss for federal income tax purposes as a result of the consummation of the Merger, except (v) make any acquisition of any assets or businesses other than expenditures for fixed or capital assets in the ordinary course of business and consistent with past practicethe Company's capital budget disclosed in Section 6.1 of the Company Disclosure Schedule and other than as set forth in the proviso in this Section 6.1(d), (vi) sell, pledge, dispose of or encumber any assets or businesses other than sales in the ordinary course of business or (vii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing; provided, however, notwithstanding the foregoing, the Company shall not be prohibited from acquiring any assets or businesses or issuing capital stock (or warrants or options to acquire capital stock) or incurring or assuming indebtedness in connection with such acquisitions so long as (x) the aggregate value of consideration paid or payable in connection with all such acquisitions, including any funded indebtedness assumed and any Company Common Stock does not exceed $40 million, (y) the aggregate value of consideration paid or payable for
(e) use all reasonable efforts to preserve intact their respective business organizations and goodwill, keep available the services of their respective present officers and key employees, and preserve the goodwill and business relationships with customers and others having business relationships with them and not engage in any action, directly or indirectly, with the intent to adversely impact the transactions contemplated by this Agreement;
(f) subject to restrictions imposed by applicable law, confer on a regular and frequent basis with one or more representatives of Parent to report operational matters of materiality and the Company shall general status of ongoing operations;
(g) not permit enter into or amend any insurance policy naming it as a beneficiary employment, severance, special pay arrangement with respect to termination of employment or a loss payable payee to be cancelled other similar arrangements or terminated without notice to the Purchaseragreements with any directors, officers or key employees, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advancesprovided, make any loanshowever, advances or capital contributions to, or investments in, any other Person; or (iv) that the Company and its subsidiaries shall in no event enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)written employment agreement;
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAPadopt, enter into or amend any closing bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, health care, employment or other employee benefit plan, agreement, settle trust, fund or arrangement for the benefit or welfare of any material Tax claim employee or assessment or consent retiree, except as required to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;comply with changes in applicable law; and
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any use commercially reasonable efforts to maintain with financially responsible insurance companies insurance on its tangible assets and its businesses in such claims, liabilities or obligations, in the ordinary course of business amounts and against such risks and losses as are consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees thatPrior to the Effective Time, (i) except unless Parent or Acquisition Corp. shall otherwise agree in writing or as expressly otherwise contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date")::
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnerscourse;
(b) the Company will not, directly or indirectly, shall not (i) except upon exercise of stock options directly or other rights to indirectly redeem, purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge otherwise acquire or agree to sellredeem, transfer purchase or pledge otherwise acquire any treasury stock shares of the Company beneficially owned by it, its capital stock; (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; By-laws except to effectuate the transactions contemplated in the Disclosures or (iii) split, combine or reclassify the outstanding SharesCompany Common Stock or declare, set aside or pay any dividend payable in cash, stock or property or make any distribution with respect to any such stock;
(c) the Company shall not: not (i) declare, set aside issue or pay any dividend or other distribution payable in cash, stock or property with respect agree to its capital stock; (ii) issue, sell, pledge, dispose of or encumber issue any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments warrants or rights of any kind to acquire, acquire any shares of capital stock of any class of the Companyof, other than Company Common Stock, except to issue shares of Company Common Stock reserved for issuance on the date hereof pursuant in connection with any matter relating to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereofDisclosures; (iiiii) transfer, lease, license, sell, mortgage, pledge, acquire or dispose of, of any fixed assets or encumber acquire or dispose of any other substantial assets other than in the ordinary and usual course of business and consistent with past practice, business; (iii) incur additional Indebtedness or incur any other liabilities or modify enter into any indebtedness or other liability, transaction other than in the ordinary and usual course of business and consistent with past practicebusiness; or (iv) redeementer into any contract, purchase agreement, commitment or otherwise acquire directly or indirectly arrangement with respect to any of its capital stockthe foregoing or (v) except as contemplated by this Agreement, enter into any contract, agreement, commitment or arrangement to dissolve, merge, consolidate or enter into any other material business combination;
(d) the Company shall not: (i) grant any increase in use its best efforts to preserve intact the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies business organization of the Company, grant any severance or termination pay to any officerkeep available the service of its present officers and key employees, director or employee and to preserve the good will of the Companythose having business relationships with it;
(e) the Company shall not modifywill not, amend nor will it authorize any director or terminate any of its material contracts authorize or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming officer or employee or any attorney, accountant or other representative retained by it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchasermake, except in the ordinary course of business and consistent solicit, encourage any inquiries with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions respect to, or investments inengage in any negotiations concerning, any other Person; or Acquisition Proposal (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease as defined below for purposes of assets or real estatethis paragraph);
(h) the . The Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction will promptly advise Parent orally and in writing of any such claims, liabilities inquiries or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements proposals (or requests for information) and the notes thereto) of the Company;
(j) substance thereof. As used in this paragraph, “Acquisition Proposal” shall mean any proposal for a merger or other business combination involving the Company shall not adopt or for the acquisition of a plan substantial equity interest in it or any material assets of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (it other than the Merger);
(k) the as contemplated by this Agreement. The Company shall not takewill immediately cease and cause to be terminated any existing activities, discussions or agree negotiations with any Person conducted heretofore with respect to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.; and
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) between the date of this Agreement and the Effective Time, except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed set forth in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business 5.01 of the Company Schedules, the businesses of the Company and the Subsidiaries shall be conducted only in in, and the Company and the Subsidiaries shall not take any action except in, the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and in a manner consistent with past practice, or incur or modify any indebtedness or other liabilityand the Company shall, other than in and shall cause each of the ordinary and usual course of business and Subsidiaries to, use its reasonable best efforts consistent with past practice; or (iv) redeempractice to preserve substantially intact the business organization of the Company and the Subsidiaries, purchase or otherwise acquire directly or indirectly any to preserve the assets and properties of the Company and the Subsidiaries in good repair and condition, to keep available the services of its capital stock;
(d) present officers and employees and to preserve the current relationships of the Company shall not: (i) grant any increase in and the compensation payable or to become payable by Subsidiaries with customers, suppliers and other Persons with which the Company to or any of its executive officers; (ii)(A) adopt any newSubsidiary has material business relations, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except each case in the ordinary course of business and in a manner consistent with past practice. Without limiting the generality of the foregoing, except as contemplated by any other provision of this Agreement or as set forth in Section 5.01 of the Company Schedules, the Company agrees that neither the Company nor any Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do any of the following without the prior written consent of Parent (which consent shall not be unreasonably withheld with respect to clauses (e)(iii) and (n) (except as set forth in Section 5.01(n) of the Company Schedules) and, to the extent it relates to either of foregoing clauses, clause (r)):
(a) amend or otherwise change its certificate of incorporation or bylaws (or other similar organizational documents);
(fb) issue, deliver, sell, transfer, dispose of, pledge or encumber any shares of its capital stock or equity interests, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares of capital stock or equity interests, voting securities or convertible securities, other than the issuance of shares of Class A Common Stock issuable pursuant to Company Stock Options outstanding on the date hereof and set forth in Section 3.03(g) of the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practiceSchedules;
(gc) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or equity interests, except for dividends by any direct or indirect Subsidiary to the Company shall not or any other Subsidiary;
(d) other than cashless exercises of Company Stock Options in accordance with their terms, reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any capital stock or equity interests of the Company or any Subsidiary;
(e) (i) incur acquire (including by merger, consolidation, or assume acquisition of stock or assets or any long-term debtother business combination) any corporation, orpartnership, other business or business organization or any division or business unit thereof; (ii) incur, guarantee, modify, repurchase, prepay or redeem any Funded Debt (other than ordinary course borrowings under existing facilities and ordinary course hedging transactions); (iii) except to the extent the amount is reflected in the 2007 operating budget of the Company (the “2007 Operating Budget”) provided to Parent and Merger Co prior to the date hereof, authorize, or make any commitment with respect to, any single capital expenditure which is in excess of $1,000,000 or capital expenditures which are, in the aggregate, in excess of $5,000,000; (iv) enter into any new line of business other than natural extensions of an existing business; (v) other than in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any Persons other Person; than wholly-owned Subsidiaries (or to the extent reflected in the 2007 Operating Budget, non wholly-owned Subsidiaries) or (ivvi) sell, lease, license, encumber or otherwise dispose of (by merger, consolidation, sale of stock or assets or otherwise) any of its material assets or licenses (other than sales of inventory or obsolete assets in the ordinary course of business) or any Subsidiary, division, or business segment of the Company;
(f) adopt or enter into a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any material commitment or transaction Subsidiary (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estateother than the Merger);
(hg) the Company shall not (i) change any increase the salary, wages, benefits, bonuses or other compensation payable or to become payable to its current or former directors, officers or employees, except for increases required under employment agreements existing on the date hereof and disclosed to Parent and except for increases in the salary, wages, benefits, bonuses or other compensation payable to employees (who are neither directors, or officers of the accounting methods used by it unless required by GAAPCompany) in the ordinary course of business consistent with past practice; or (ii) other than related in the ordinary course of hiring employees to positions other than executive officer of the Company or any Subsidiary, enter into any employment, change of control or severance agreement with, or establish, adopt, enter into or amend any Plan, bonus, profit sharing, thrift, stock option, restricted stock, pension, retirement, welfare, deferred compensation, employment, change of control, termination, severance or other benefit plan, agreement, policy or arrangement for the benefit of, any current or former director, officer or employee except for the severance, double-trigger change of control and bonus arrangements disclosed to Parent on Section 3.11(b) of the Company Schedules (in each case, in such customary form as is reasonably satisfactory to Parent and in no event containing a “280G gross-up” provision); (iii) exercise any discretion to accelerate the vesting or payment of any compensation or benefit under any Plan, except for payments pursuant to the Company’s voluntary separation program to those individuals listed on Section 3.11(e) of the Company Schedules and to a QEF Electionsingle employee disclosed to Parent who terminated employment effective June 30, 2007; (iv) grant any new awards under any Plan; or (v) take any action to fund the payment of compensation or benefits under any Plan, except in the case of clauses (ii) and (v), in the ordinary course of business, consistent with past practices with respect to employees that are not officers or directors, or as may be required by the terms of any such plan, agreement, policy or arrangement in effect on the date hereof or as may be required to comply with Law;
(i) except as required by Law or the Treasury Regulations promulgated under the Code, make any change (or file any such change) in any method of Tax accounting for a material amount of Taxes or (ii) make, change or rescind any material Tax election, change settle or compromise any material Tax election already madeliability, adopt file any amended Tax Return involving a material Tax accounting method, change any material Tax accounting method unless amount of additional Taxes (except as required by GAAPLaw), enter into any closing agreementagreement relating to a material amount of Taxes, settle any material Tax claim or assessment waive or consent to any material Tax claim or assessment or any waiver of extend the statute of limitations for any such material claim or assessment;
in respect of Taxes (i) other than pursuant to extensions of time to file Tax Returns obtained in the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwiseordinary course of business), other than the paymentthan, discharge or satisfaction of any such claims, liabilities or obligationsin each case, in the ordinary course of business and consistent with past practice, ;
(i) make any change to its methods of accounting except (i) as required by changes in GAAP or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes theretoii) of the Companyas may be required by a change in applicable Law;
(j) write up, write down or write off the book value of any of its assets, other than (i) in the ordinary course of business and consistent with past practice or (ii) as may be required by GAAP;
(k) waive, settle or satisfy any material claim (which shall include, but not be limited to, any pending or threatened material Action), other than in the ordinary course of business and consistent with past practice;
(l) enter into any agreement that restricts its ability to engage or compete in any line of business in any material respect or that would otherwise prohibit or materially restrict it from operating as it has historically, excluding licenses containing restrictions on “field of use” (or similar provisions) relating to such licenses;
(m) materially and adversely amend, modify or cancel any Specified Contract;
(n) enter into any contract that would have been a Specified Contract if it were in effect on the date hereof, other than (i) as set forth in Section 5.01(n) of the Company shall not adopt a plan Schedules and (ii) any Contract entered into in the ordinary course of complete business with any supplier or partial liquidationcustomer of the Company or any Subsidiary pursuant to which the Company and its Subsidiaries reasonably expect to make or receive, dissolutionas the case may be, mergeraggregate payments of less than $50,000,000 in any calendar year;
(o) enter into, consolidationrenew or adversely amend in any material respect any transaction, restructuringagreement, recapitalization arrangement or other reorganization understanding between (i) the Company or any Subsidiaries, on the one hand, and (ii) any Affiliate of the Company (other than any of the MergerCompany’s Subsidiaries), on the other hand, of the type that would be required to be disclosed under Item 404 of Regulation S-K, other than the Plans set forth in Section 3.11(b) of the Company Schedules;
(kp) the Company shall not take(i) assign, transfer, license or sublicense, mortgage or encumber, abandon, permit to lapse, or agree otherwise dispose of any material Intellectual Property or (ii) fail to commit pay any fee, take any action or make any filing reasonably necessary to takemaintain the Scheduled Intellectual Property, in each case, other then in the ordinary course of business;
(i) take any action that would, would reasonably be likely to prevent or is reasonably likely to, result in any materially delay satisfaction of the conditions to the Merger set forth contained in Article VII not being satisfied, Section 7.01 or would make many representation 7.02 or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required Merger, or (ii) take any action that would have a Company Material Adverse Effect, in each case other than as permitted by and subject to do so by order the conditions of a court of competent jurisdictionSection 6.04 hereof; andor
(mr) the Company shall not announce an intention, enter into an agreementany formal or informal agreement or otherwise make a commitment, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained in this Section 5.01 to the contrary, the Company shall, and shall cause each of its Subsidiaries to amend or modify any “nonqualified deferred compensation plan” (as defined in Section 409A(d)(1) of the Code) of the Company or any of its Subsidiaries to the extent required or deemed advisable by the Company or the applicable Subsidiary to comply with Section 409A of the Code and/or any regulations or guidance promulgated thereunder; provided, however that no such amendment or modification shall result in additional material liability (beyond the benefits otherwise due) or in a material acceleration of the time of payment, without the consent of Parent. Furthermore, the Company shall, with the prior written consent of the Parent or Merger Co, be permitted to offer or provide transaction bonuses, enhanced severance benefits, or other similar payments to authorize, recommend, propose or announce an intention to do any Employees not listed on Section 3.11(b) of the foregoingCompany Schedules (other than officers and directors).
Appears in 1 contract
Samples: Merger Agreement (Sequa Corp /De/)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 8.1, except as (i) except as expressly may be required by Law, (ii) may be consented to in writing by Parent, electronic mail being sufficient (which consent shall not be unreasonably withheld, conditioned or delayed), (iii) may be required, contemplated by or permitted pursuant to this Agreement, the Option Agreement or the Stockholders Agreement, or (iiiv) as disclosed on Schedule 5.2 set forth in Section 6.1 of the Company Disclosure ScheduleLetter, or (iiix) as agreed in writing by the Purchaser, after the date hereof, and prior Company shall use its commercially reasonable efforts to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) conduct the business of the Company shall be conducted only and its Subsidiaries in the ordinary course of business, and usual course and, to the extent consistent therewith, the Company shall use its best commercially reasonable efforts to preserve intact its business organization intact in all material respects and maintain (y) the Company shall not, and shall not permit any of its existing relations with customers, suppliers, employees, creditors and business partnersSubsidiaries to:
(a) amend or otherwise change the Company Charter or the Company Bylaws (or such equivalent organizational or governing documents of any of its Subsidiaries) or the terms of any security of the Company or any Subsidiary of the Company;
(b) split, combine, reclassify, redeem, repurchase or otherwise acquire or amend the Company will not, directly or indirectly, (i) except upon exercise terms of any capital stock options or other equity interests or rights to purchase (other than repurchases or retention of shares of Company Common Stock pursuant to in connection with the Option Plans outstanding on the date hereof vesting or upon exercise settlement of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding SharesEquity Awards);
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose dispose, encumber or grant any shares of its or encumber its Subsidiaries’ capital stock or other equity interests (including any additional shares ofgrants of Company Equity Awards under the Company Equity Plan), or securities convertible into or exchangeable for, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of its or its Subsidiaries’ capital stock of any class of or equity interests except for transactions among the Company and its direct or indirect wholly owned Subsidiaries or among the Company’s direct or indirect wholly owned Subsidiaries and for Permitted Liens; provided, other than however, that the Company may issue shares of Company Common Stock reserved for issuance upon the vesting or settlement of Company Equity Awards as in effect on the date hereof pursuant to or upon the exercise of Options or Warrants or conversion of Voting Debt outstanding on Series A Preferred Stock or Series B Preferred Stock in accordance with the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in terms of the ordinary and usual course applicable Company Certificate of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stockDesignation;
(d) authorize, declare, pay or make any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to the Company shall not: Company’s or any of its Subsidiaries’ capital stock or other equity interests, other than (i) grant dividends payable in respect of the Series A Preferred Stock and the Series B Preferred Stock issued and outstanding as of the date of this Agreement and in accordance with their respective terms, and (ii) dividends paid by any increase in the compensation payable or to become payable by wholly owned Subsidiary of the Company to the Company or any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee wholly owned Subsidiary of the Company;
(e) except as required under the terms of a Company Benefit Plan as currently in effect and disclosed on Section 4.12(a) of the Company shall not modifyDisclosure Letter or an existing collective bargaining agreement or by applicable Law, (i) increase the compensation payable or to become payable or benefits provided or to be provided to any director, officer or employee of the Company or any of its Subsidiaries (other than increases in base salary and corresponding target bonus opportunity, in each case in the ordinary course of business), (ii) establish, adopt, enter into, terminate or amend any Company Benefit Plan (or any arrangement which if in existence as of the date hereof would constitute a Company Benefit Plan), (iii) enter into, amend or terminate any collective bargaining agreement with any labor union, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of its material contracts compensation or waive, release or assign benefits under any material rights or claimsCompany Benefit Plan, except in the ordinary course as explicitly required by this Agreement; (v) negotiate, extend, amend or enter into any new employment, engagement, severance or similar agreements with any Continuing Employee who receives or would receive total annual base cash compensation of business and consistent with past practicemore than $200,000 per annum; or (vi) hire or terminate (other than for cause) any Continuing Employee who receives or would receive total annual base cash compensation of more than $200,000 per annum;
(f) the Company shall not permit any insurance policy naming it as a beneficiary acquire (including by merger, consolidation or a loss payable payee to be cancelled acquisition of stock or terminated without notice to the Purchaserassets), except in respect of any merger, consolidation or business combination among the ordinary course Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, any material equity interest in or business of business and consistent with past practiceany Person;
(g) sell, lease, sublease, mortgage, pledge or otherwise encumber or dispose of any material assets of the Company shall not (i) incur Company, including any Owned Real Property or assume any long-term debt, orLeased Real Property, except in the ordinary course of business;
(h) incur, incur or amend in any material respect the terms of, any indebtedness for borrowed money, including the Notes and the Indenture governing the Notes, or assume or guarantee any short-term such indebtedness in amounts for any Person, except for indebtedness incurred (i) under the Existing Debt Agreement or incurred to replace, renew, extend, refinance or refund any existing indebtedness of the Company or its Subsidiaries other than the Notes on terms and conditions not consistent inconsistent with past practice; prevailing market conditions for substantially similar credit facilities at such time, (ii) assumepursuant to other agreements in effect prior to the execution of this Agreement to the extent such agreements were not entered into with an Affiliate of the Company, guarantee(iii) under capital leases, endorse or otherwise become liable or responsible (whether directlypurchase money financing, contingently or otherwise) for the obligations equipment financing and letters of any other Person, except credit in the ordinary course of business or (iv) between or among the Company or any of its Subsidiaries;
(i) enter into, modify or amend any Company Material Contract which cannot be terminated without material penalty upon notice of 90 days or less other than in the ordinary course of business;
(j) make any material change to its methods of accounting in effect at September 30, 2022, except as required by GAAP, or make any material change in internal accounting controls or disclosure controls and consistent procedures that could reasonably be expected to negatively affect the Company;
(k) (i) make or change any material Tax election, (ii) adopt or change any accounting period or any accounting method with past practice; respect to Taxes, (iii) file any Tax Return outside the ordinary course of business, (iv) file any material amended Tax Return or any claim for a material Tax refund, (v) enter into any closing agreement with respect to a material amount of Taxes, (vi) settle any material Tax claim, assessment or Action relating to the Company or any of its Subsidiaries, or (vii) consent to any extension or waiver of the limitation period applicable to any Tax claim, assessment or Action relating to the Company or any of its Subsidiaries (other than pursuant to an automatic extension of time to file a Tax Return obtained in the ordinary course expense advancesof business);
(l) except as contemplated by this Agreement, solely with respect to the Company, adopt or enter into a plan of complete or partial liquidation or dissolution;
(m) settle or compromise any material litigation other than settlements or compromises of litigation where (i) the amount paid (less the amount reserved for such matters by the Company or otherwise covered by insurance) in settlement or compromise in any one matter or collectively in any related matters, in each case, does not exceed $350,000 or (ii) any litigation with respect to which an insurer (but neither the Company nor any of its Subsidiaries) has the right to control the decision to settle;
(n) make any loans, advances or capital contributions to, to or investments in, in any Person (other Person; than loans or (iv) enter into any material commitment advances between or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) among the Company shall not (i) change and any of the accounting methods used by it unless required by GAAP; its direct or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwiseindirect wholly owned Subsidiaries), other than trade credit and similar loans and advances made to employees, customers and suppliers in the paymentordinary course of business;
(o) make or authorize any capital expenditure other than for capital expenditures that do not, discharge in any calendar year, exceed the aggregate capital expenditure amount that was set forth on the most recent version of the Company budget for the 2023 calendar year;
(p) fail to use commercially reasonable efforts to renew or satisfaction maintain any of any such claimsthe Company or its Subsidiaries’ material insurance policies or comparable replacement policies, liabilities or obligations, other than in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(jq) enter into any agreement with respect to the Company shall not adopt a plan voting of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger)its capital stock;
(kr) the Company shall not take, or agree to commit to take, enter into any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or real property lease as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminatea tenant, amend or otherwise modify any existing Real Property Lease or acquire the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdictionfee interest in any real property; andor
(ms) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention agreement to do any of the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) between the date of this Agreement and the Effective Time, unless the Parent shall otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use its reasonable best efforts to preserve substantially intact the business organization of the Company and the Subsidiaries, to maintain adequate insurance coverage, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation of the foregoing, except as expressly contemplated by this Agreement, neither the Option Company nor any Subsidiary shall, between the date of this Agreement and the Effective Time, directly or the Stockholders Agreementindirectly do, or (ii) as disclosed on Schedule 5.2 propose to do, any of the Disclosure Schedule, or (iii) as agreed in writing by following without the Purchaser, after the date hereof, and prior to the time the directors written consent of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):Parent:
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use amend or otherwise change its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate Articles of Incorporation or Bylaws or similar equivalent organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iib) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable forgrant, encumber, or optionsauthorize the issuance, warrantssale, callspledge, commitments disposition, grant or rights encumbrance of any kind to acquire, (i) any shares of capital stock of any class of the CompanyCompany or any Subsidiary, or any options, warrants, convertible securities or other than rights of any kind to acquire any shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose ofsuch capital stock, or encumber any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary or (ii) any assets other than of the Company or any Subsidiary, except for sales in the ordinary and usual course of business and in a manner consistent with past practice;
(c) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, other than payable in the ordinary and usual course of business and consistent cash, stock, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock;
(d) the Company shall not: reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) grant any increase in the compensation payable or to become payable acquire (including, without limitation, by the Company to any of its executive officers; (ii)(A) adopt any newmerger, consolidation, or (Bacquisition of stock or assets or any other business combination) amend any corporation, partnership, other business organization or otherwise increase, any division thereof or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practiceassets; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guaranteeguarantee or endorse, endorse pledge in respect of or otherwise as an accommodation become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Personperson, or make any loans or advances, except in the ordinary course of business and consistent with past practice; (iii) enter into any contract or agreement with any direct competitor of the Parent or any affiliate thereof, or any other contract or agreement, except contracts or agreements entered into in the ordinary course of business, consistent with past practice and that require payments by or to the Company or the Subsidiaries (A) with respect to such contracts or agreements with a term of more than one year, in an aggregate amount of less than U.S. $100,000 and (B) with respect to such contracts or agreements with a term of one year or less, in an aggregate amount of less than U.S. $250,000; (iv) terminate, cancel or request any material change in, or agree to any material change in, any Material Contract set forth in Section 3.17 of the Disclosure Schedule; (v) authorize one or more capital expenditures that are, in the aggregate, in excess of U.S. $75,000 for the Company and the Subsidiaries taken as a whole, other than ordinary course expense advancescapital expenditures with respect to projects that have commenced prior to the date hereof, make or with respect to which equipment has been ordered prior to the date hereof, so long as, with respect to such projects, the Parent shall have been informed in writing thereof prior to the date hereof and, with respect to such orders, the Company discusses with the Parent or its representatives, promptly after the date hereof, such orders and the intended uses of the equipment the subject thereof, PROVIDED that the Company shall report on the progress of any loanssuch project in accordance with Section 5.02 hereof; or (vi) enter into or amend any contract, advances agreement, commitment or capital contributions arrangement with respect to any matter set forth in this Section 5.01(e);
(f) increase the compensation payable or to become payable to its officers, employees or consultants, except for increases in accordance with past practices in salaries or wages of employees of the Company or any Subsidiary who are not officers of the Company, or grant any severance or termination pay to, or investments in, any other Person; or (iv) enter into any material commitment employment or transaction severance agreement with, any director, officer or other employee of the Company or any Subsidiary, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(g) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including, but not limited towithout limitation, any borrowing, capital expenditure or purchase, sale or lease procedures with respect to the payment of assets or real estateaccounts payable and collection of accounts receivable);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change tax election or settle or compromise any material Tax election already madefederal, adopt any material Tax accounting methodstate, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim local or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessmentforeign income tax liability;
(i) the Company shall not pay, discharge or satisfy any claimsclaim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligationssatisfaction, in the ordinary course of business and consistent with past practice, or claims, of liabilities or obligations reflected or reserved against inin the Company's balance sheet dated June 30, 1998, or contemplated by, subsequently incurred in the consolidated financial statements (or the notes thereto) ordinary course of the Companybusiness and consistent with past practice;
(j) the Company shall not adopt a plan of complete make any material alterations or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization modifications to any of the Company (other than water sources used by the Merger);Company, including, without limitation, any new boreholes or any new xxxxx; or
(k) the Company shall not takeannounce an intention, enter into any formal or informal agreement, or agree to commit to takeotherwise make a commitment, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Aquapenn Spring Water Company Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) between the date of this Agreement and the earlier of the Effective Time and the termination of this Agreement pursuant to Article VIII, except as set forth in Section 5.01 of the Company Disclosure Schedule or as expressly contemplated by any other provision of this Agreement, the Option Agreement or the Stockholders Agreementrequired by applicable Law, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed unless Parent shall otherwise consent in writing by the Purchaser(which consent shall not be unreasonably withheld, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewithconditioned or delayed), the Company shall use its best commercially reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to conduct the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock businesses of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable Group Companies in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except a lawfully permitted manner in the ordinary course of business and consistent with past practicepractice in all material respects; and (ii) preserve substantially intact the business organization of the Group Companies, in all material respects, to keep available the services of the current officers and key employees of the Group Companies and maintain the current relationships of the Group Companies with existing customers, suppliers and other persons with which any Group Company has material business relations as of the date hereof. Without limiting the generality of the foregoing paragraph, except as set forth in Section 5.01 of the Company Disclosure Schedule, no Group Company shall, between the date of this Agreement and the Effective Time, directly or indirectly, do, or propose to do, any of the following without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned):
(a) amend or otherwise change its memorandum and articles of association or equivalent organizational documents;
(fb) issue, sell, transfer, lease, sublease, license, pledge, dispose of, grant or encumber, or authorize the issuance, sale, transfer, lease, sublease, license, pledge, disposition, grant or encumbrance of, (i) any shares of any class of shares of any Group Company shall not permit (other than in connection with the exercise of any insurance policy naming it as Company Equity Awards in accordance with the applicable Share Incentive Plans or Warrant Agreements), or any options, warrants, convertible securities or other rights of any kind to acquire any shares, or any other ownership interest (including, without limitation, any phantom interest), of any Group Company, or (ii) any property or assets (whether real, personal or mixed, and including leasehold interests and intangible property) of any Group Company with a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaservalue in excess of US$10,000,000, except in the ordinary course of business and in a manner consistent with past practice;
(gc) declare, set aside, make or pay any dividend or other distribution, payable in cash, shares, property or otherwise, with respect to any of its shares (other than dividends or other distributions from any Subsidiary of the Company shall not to the Company or any of its other Subsidiaries consistent with past practice);
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its shares, or any options, warrants, convertible securities or other rights exchangeable into or convertible or exercisable for any of its shares;
(e) effect or commence any liquidation, dissolution, scheme of arrangement, merger, consolidation, amalgamation, restructuring, reorganization or similar transaction involving any Group Company, or create any new Subsidiaries;
(f) (i) incur (A) acquire (including, by merger, consolidation, scheme of arrangement, amalgamation or assume acquisition of stock or assets or any long-term debtother business combination) any assets, orsecurities or properties, except in aggregate, with a value or purchase price (including the value of assumed liabilities) in excess of US$20,000,000 in any transaction or related series of transactions, or (B) make any capital contribution or investment in any corporation, partnership, other business organization or any division thereof in excess of US$20,000,000 (in each case, other than in the ordinary course of business, incur business or assume any short-term indebtedness pursuant to Contracts in amounts not consistent with past practiceexistence on the date hereof and on the terms in effect on the date hereof); (ii) incur, assume, guaranteealter, endorse amend or otherwise become liable modify any Indebtedness in excess of US$10,000,000 individually or responsible US$20,000,000 in the aggregate, or guarantee such Indebtedness, or issue any debt securities or make any loans or advances in excess of US$10,000,000 individually or US$20,000,000 in the aggregate; (whether directlyiii) create or grant any Lien on any assets of any Group Company; or (iv) authorize, contingently or otherwise) make any commitment with respect to, any single capital expenditure which is in excess of US$10,000,000 or capital expenditures which are, in the aggregate, in excess of US$20,000,000 for the obligations of Group Companies taken as a whole;
(g) Except (i) to the extent required under any other PersonShare Incentive Plan or Material Contract as effective on the date hereof, except (ii) in the ordinary course of business and in a manner consistent with past practice; , and (iii) other than ordinary course expense advancesas otherwise required by applicable Law, make any loans, advances or capital contributions to, or investments in, any other Person; or (ivi) enter into any material commitment new employment or transaction compensatory agreements (includingincluding the renewal of any such agreements), but not limited or terminate any such agreements, with any director or officer of any Group Company (other than the hiring or termination of officers with aggregate annual compensation of less than US$500,000), (ii) grant or provide any severance or termination payment or benefit to any director or officer of any Group Company in an amount exceeding US$500,000, (iii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any borrowingnew equity awards to any director or officer of any Group Company other than pursuant to Contracts currently in existence, capital expenditure (iv) establish, adopt, amend or purchaseterminate any Company Employee Plan or amend the terms of any outstanding Company Equity Awards, sale (v) take any action to accelerate the vesting or lease payment, or fund or in any other way secure the payment, of assets compensation or real estate)benefits under the Company Employee Plan, or (vi) forgive any loans to directors or officers of any Group Company;
(h) the issue or grant any Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent Equity Award to any material Tax claim or assessment or person under any waiver of the statute of limitations for any such material claim or assessmentShare Incentive Plan;
(i) make any changes with respect to any credit practice, method of financial accounting, or financial accounting policies or procedures, including changes affecting the Company shall not reported consolidated assets, liabilities or results of operations of the Group Companies, except as required by changes in GAAP;
(j) pay, discharge or satisfy any claimsclaim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, obligations as they become due in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) except in the Company shall not takeordinary course of business, enter into, amend, modify or consent to the termination of any Material Contract (or any Contract that would be a Material Contract if such Contract had been entered into prior to the date hereof), or agree to commit to takeamend, any action that wouldwaive, modify or is reasonably likely to, result in any of the conditions consent to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as termination of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummationGroup Company’s material rights thereunder;
(l) enter into any Contract between a Group Company, on the Company shall not redeem one hand, and any of its Affiliates, officers, directors or employees (other than the Rights or terminateGroup Companies), amend or otherwise modify on the Rights Agreement prior to the consummation of the Offer unless other hand, in each case required to do so by order be disclosed pursuant to Item 7B or Item 19 of a court of competent jurisdiction; andForm 20-F under the Exchange Act;
(m) terminate or cancel, let lapse, or amend or modify in any material respect, other than renewals in the ordinary course of business, any material insurance policies maintained by it which is not promptly replaced by a comparable amount of insurance coverage;
(n) commence any Action, or settle, release, waive or compromise any pending or threatened Action of or against the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoingCompany Subsidiaries, in each case (i) for an amount in excess of US$10,000,000 in the aggregate, or (ii) 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 Subsidiary relating to authorizethe Transactions;
(o) permit any item of Company Owned Intellectual Property to lapse or to be abandoned, recommenddedicated, or disclaimed, fail to perform or make any applicable filings, recordings or other similar actions or filings, or fail to pay all required fees and taxes required or advisable to maintain and protect its interest in each and every item of Company Owned Intellectual Property;
(p) fail to make in a timely manner any filings or registrations with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(q) enter into, or propose to enter into, any transaction involving any earn-out, installment or similar payment payable by any Group Company, to any Third Party, other than payments in connection with purchases of vehicles, plant, equipment, supplies or computers in the ordinary course of business, with a maximum potential earn-out, installment or similar payment that, as reasonably estimated by the Company, individually, could reasonably be expected to result in payments by any Group Company of more than US$10,000,000, to any Third Party;
(r) engage in the conduct of any new line of business material to the Company and its Subsidiaries, taken as a whole;
(s) make or change any material Tax election, materially amend any Tax return (except as required by applicable Law), enter into any material closing agreement with respect to Taxes, surrender any right to claim a material refund of Taxes, settle or finally resolve any material controversy with respect to Taxes or materially change any method of Tax accounting; or
(t) announce an intention intention, enter into any formal or informal agreement or otherwise make a commitment, to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Kongzhong Corp)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, between the date of this Agreement and the earlier of the Effective Time and the Termination Date, except as contemplated by this Agreement, as required by law, as set forth in Schedule 5.01 or as approved by Parent in writing (i) which approval shall not be unreasonably withheld or delayed), the business of the Company and the Subsidiaries shall be conducted in the ordinary course of business, and the Company and the Subsidiaries shall use their reasonable best efforts to preserve substantially intact their business organization, and to preserve their present relationships with customers, suppliers and other Persons with which any of them has significant business relations. Without limiting the generality of the foregoing, except as expressly contemplated by any other provision of this Agreement, the Option Agreement or the Stockholders Agreementas required by law, or as set forth in Schedule 5.01, neither the Company nor any Subsidiary shall, during such period, without the prior written consent of Parent (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, which consent shall not be unreasonably withheld or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"delayed):
(a) the business amend or otherwise change its certificate of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnersincorporation or bylaws (or comparable organizational or charter documents);
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable forgrant, or encumber: (i) any shares of any class of capital stock of the Company or any Subsidiary, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of stock, Rights, or any class other ownership interest (including any phantom interest), of the CompanyCompany or any Subsidiary, except for the issuance of Shares and associated Rights issuable pursuant to Company Stock Options and other than shares of Company Common Stock reserved for issuance contractual rights outstanding on the date hereof and set forth in the Company Disclosure Schedules pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date Article III hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (ivii) redeem, purchase or otherwise acquire directly or indirectly any material assets of its capital stock;
(d) the Company shall not: (i) grant or any increase in Subsidiary, except for sales of inventory and encumbrances on the compensation payable or to become payable by assets of the Company to or any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except Subsidiary in the ordinary course of business and in a manner consistent with past practice;
(fc) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for dividends by any direct or indirect wholly-owned Subsidiary to the Company shall not permit or any insurance policy naming it as other Subsidiary;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any capital stock of the Company or any Subsidiary, other than in connection with the exercise of Company Stock Options or other contractual rights existing on the date hereof and set forth in the Company Disclosure Schedules pursuant to Article III hereof;
(i) acquire or dispose of (including by merger, consolidation, license, lease, acquisition or disposition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof having a beneficiary value (including the amount of any assumed indebtedness) in excess of $1,000,000, individually or a loss payable payee to be cancelled in the aggregate; (ii) repurchase, repay, cancel or terminated without notice to the Purchaserincur any indebtedness for borrowed money, except other than (A) in connection with permitted acquisitions or (B) scheduled payments in the ordinary course of business and consistent with past practice;
practice and in connection with currently outstanding capital leases and indebtedness for borrowed money; (giii) the Company shall not (i) incur grant any Lien in, on or assume to any long-term debt, orof its material assets to secure any indebtedness for borrowed money, except in connection with such indebtedness permitted under the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practicepreceding clause (ii); (iiiv) issue any debt securities or assume, guaranteeendorse, endorse or otherwise become liable or responsible (whether directlyfor, contingently or otherwise) for the obligations of any Person other Personthan a Subsidiary, or make any loans or advances to any Person other than a Subsidiary; (v) except to the extent the amount is reflected in the ordinary course Company’s capital expenditure budget on the date hereof (a copy of which has been provided to Parent), authorize, or make any commitment with respect to, any single capital expenditure that is in excess of $250,000 or capital expenditures which are, in the aggregate, in excess of $1,000,000 for the Company and the Subsidiaries taken as a whole; (vi) enter into any new line of business and consistent with past practiceoutside of its existing business segments; or (iiivii) make investments in Persons other than Subsidiaries, other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)in cash and cash equivalents made consistent with past practice and in accordance with the Company’s existing investment policy;
(hf) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; adopt or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger) or any Subsidiary;
(g) (i) increase the compensation payable or to become payable or the benefits provided to any current or former director or executive officer; (ii) grant any retention, severance or termination pay to, or enter into any employment, bonus, change of control or severance agreement with, any current or former director or executive officer; (iii) establish, adopt, enter into, terminate or materially amend any collective bargaining agreement or Plan (other than individual contracts, agreements or commitments with employees who are not directors or executive officers); or (iv) establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be such a Plan if it were in existence as of the date of this Agreement, except as required by law or as required under any existing Plan or Contract;
(i) except as required by law or the Treasury Regulations promulgated under the Code, make any change (or file any such change) in any method of Tax accounting for a material amount of Taxes or (ii) make, change or rescind any material Tax election, settle or compromise any material Tax liability, file any amended Tax Return involving a material amount of additional Taxes (except as required by law), enter into any closing agreement relating to a material amount of Taxes, or waive or extend the statute of limitations in respect of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business), other than, in each case, in the ordinary course of business and consistent with past practice;
(i) make any material change to its methods of accounting in effect at December 31, 2006, except (i) as required by changes in GAAP (or any interpretation thereof) or Regulation S-X under the Exchange Act, (ii) as may be required by a change in applicable law, (iii) as disclosed in an SEC Report filed prior to the date hereof or (iv) as required by a Governmental Entity or quasi-Governmental Entity (including the Financial Accounting Standards Board or any similar organization);
(j) pay, discharge, waive, settle or satisfy any material claim (which shall include, but not be limited to, any pending or threatened material Action), other than a payment, discharge, waiver, settlement or satisfaction, in accordance with their terms, of claims disclosed in the most recent financial statements (or the notes thereto) of the Company included in an SEC Report filed prior to the date hereof;
(k) other than in the Company shall not takeordinary course of business, amend, modify, cancel or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions consent to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as termination of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;Material Contract; or
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior agree to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do take any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingactions described in Sections 5.1(a) through 5.1(k) above.
Appears in 1 contract
Samples: Merger Agreement (Industrial Distribution Group Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) between the date of this Agreement and the Effective Time, except as contemplated by this Agreement and as set forth in Section 5.1 of the Disclosure Schedule or unless Parent shall otherwise agree in writing, the businesses of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use commercially reasonable efforts to preserve substantially intact the business organization of the Company and the Subsidiaries, to keep available the services of the current officers and key employees and consultants of the Company and the Subsidiaries and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. Except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 and Section 5.1 of the Disclosure Schedule, or (iii) as agreed in writing by neither the PurchaserCompany nor any Subsidiary shall, after between the date hereof, of this Agreement and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will notEffective Time, directly or indirectly, (i) except upon exercise of stock options do, or other rights propose to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtdo, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, following without the prior written consent of Parent:
(iia) amend or otherwise change its Restated Certificate articles of Incorporation organization or Bylaws by-laws or similar equivalent organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iib) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable forgrant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of any shares of any class of capital stock of the Company or any Subsidiary, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of stock, or any class other ownership interest (including, without limitation, any phantom interest), of the Company, other than shares Company or any Subsidiary (except for the issuance of Company Common Stock reserved for issuance on the date hereof a maximum of 2,306,400 Shares issuable pursuant to the exercise of Options or Company Stock Option Plans, Preferred Shares, Convertible Notes and Warrants or conversion of Voting Debt outstanding on the date hereof);
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for regular quarterly dividends on the Preferred Shares declared and paid at times consistent with past practice in an aggregate amount not in excess of $1.65 per Share;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger, consolidation or acquisition of stock or assets or any other business combination) any corporation, partnership, other business organization or any division thereof or any material amount of assets, other than pending acquisitions or minority investments, in each case publicly announced prior to the date hereof; (ii) incur 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, or make any loans or advances, except in the ordinary course of business and consistent with past practice; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except assets (other than sales of obsolete assets and inventory in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice); (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (includingauthorize, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities liabilities, commitments or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise)) in excess of $250,000, other than the payment, discharge or satisfaction of any such claims, liabilities liabilities, commitments or obligations, in the ordinary course of business consistent with past practice, or reflected or reserved against in, or contemplated by, the 2004 Balance Sheet;
(f) increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases in the ordinary course of business and consistent with past practice in salaries or wages of employees of the Company or any Subsidiary who are not directors or executive officers of the Company, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, executive officer or other employee of the Company or of any Subsidiary, or establish, adopt, enter into or amend any collective bargaining, bonus, profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(g) take any action, other than commercially reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or claimsprocedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable);
(h) make any material tax election or settle or compromise any material United States federal, state, local or other non-United States income tax liability, except in the ordinary course of business or in a manner consistent with past practice; or change any of the accounting methods used by the Company materially affecting the Company’s assets, liabilities or obligations reflected business, except for such changes required by GAAP;
(i) enter into, amend, modify or reserved against inconsent to the termination of any Material Contract, or contemplated byamend, waive, modify or consent to the consolidated financial statements (or the notes thereto) termination of the Company’s or any Subsidiary’s rights thereunder, other than in the ordinary course of business and consistent with past practice, including any new or materially amended joint venture or supply agreement with Infineon Technologies AG or any Affiliate thereof (“Infineon”);
(j) permit any material insurance policy naming the Company shall not as a beneficiary or a loss payee to be cancelled or terminated without notice to Parent;
(k) create any material Subsidiaries or adopt 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);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights commence or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdictionsettle any material Action; andor
(m) the Company shall not announce an intention, enter into an agreementany formal or informal agreement or otherwise make a commitment, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Parlex Corp)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees thatUnless Amazxx.xxx xxxll otherwise agree in writing, (i) except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted in and only in in, and the Company shall not take any action except in, the ordinary course of business and usual course and, to the extent in a manner consistent therewith, with past practice and in accordance with applicable law; and the Company shall use its best reasonable efforts to preserve its intact the business organization intact of the Company, to keep available the services of the current officers, employees and maintain its existing relations with consultants of the Company and to preserve the current relationships of the Company with, and the goodwill of, customers, supplierssuppliers and other Persons with which the Company has significant business relations. By way of amplification and not limitation, employeesexcept as otherwise contemplated by this Agreement, creditors the Company shall not, between the date of this Agreement and business partnersthe Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Amazxx.xxx:
(a) amend or otherwise change its Articles of Organization or Bylaws or equivalent organizational documents;
(b) except for the Company will not, directly or indirectly, (i) except upon exercise issuance to a purchaser of stock options or other rights to purchase no more than 10,000 shares of Company Common Series B Stock pursuant upon a sale that closes prior to the Option Plans outstanding on Closing Date and except for the date hereof or issuance of shares of capital stock of the Company upon the exercise of outstanding Warrants or conversion of Voting Debtcurrently outstanding Options, Warrants, Company Series A Stock or Company Series B Stock, issue, sell, transfer contract to issue or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, grant, encumber or securities convertible into authorize the issuance, sale, pledge, disposition, grant or exchangeable for, or options, warrants, calls, commitments or rights Encumbrance of any kind to acquire, (i) any shares of capital stock of any class of the Company, or any options, warrants, convertible securities or other than rights of any kind to acquire any shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose ofsuch capital stock, or encumber any other ownership interest (including, without limitation, any phantom interest), of the Company or (ii) any assets other than of the Company, except for sales in the ordinary and usual course of business and in a manner consistent with past practice;
(c) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, payable in cash, stock or other than in the ordinary and usual course of business and consistent securities, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable reclassify, combine, split, subdivide, redeem, purchase or to become payable by the Company to otherwise acquire, directly or indirectly, any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, capital stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Companysecurities;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur acquire (including, without limitation, by merger, consolidation, or assume acquisition of stock or assets) any long-term debtcorporation, orpartnership, except in the ordinary course other business organization or division thereof or any material amount of business, incur or assume any short-term indebtedness in amounts not consistent with past practiceassets; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guaranteeguarantee or endorse, endorse or otherwise as an accommodation become liable or responsible (whether directlyfor, contingently or otherwise) for the obligations of any other Person, or make any loans or advances, except in the ordinary course of business and consistent with past practice; (iii) enter into any contract or agreement other than in the ordinary course expense advancesof business, make consistent with past practice; (iv) authorize any loans, advances single capital expenditure that is in excess of $25,000 or capital contributions toexpenditures that are, or investments inin the aggregate, any other Personin excess of $100,000 for the Company taken as a whole; or (ivv) enter into any material agreement in which the obligation of the Company exceeds $25,000 or that shall not terminate or be subject to termination for convenience within 180 days following execution; (vi) license any Technology or IP Rights other than in the ordinary course of business, consistent with past practice; or (vii) enter into or amend any contract, agreement, commitment or transaction arrangement with respect to any matter set forth in this Section 6.1(e);
(f) enter into or amend any employment, consulting or agency agreement, or, except as required by any Employee Benefit Plan listed on Schedule 2.13.1 to the Disclosure Memorandum, increase the compensation payable or to become payable to its officers, employees, agents or consultants, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance, benefit or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(g) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting methods, policies or procedures (including, but not limited towithout limitation, any borrowing, capital expenditure or purchase, sale or lease procedures with respect to the payment of assets or real estateaccounts payable and collection of accounts receivable);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax electiontax election or settle or compromise any federal, change any material Tax election already madestate, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim local or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessmentforeign income tax liability;
(i) the Company shall not pay, discharge or satisfy any claimsclaim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligationssatisfaction, in the ordinary course of business and consistent with past practice, or claims, of liabilities or obligations reflected or reserved against in, in the Company Balance Sheet or contemplated by, subsequently incurred in the consolidated financial statements (or the notes thereto) ordinary course of the Companybusiness and consistent with past practice;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, take any action that would, would or is reasonably likely toto result in any of the representations and warranties of the Company set forth in this Agreement being untrue, result or in any covenant of the Company set forth in this Agreement being breached, or in any of the conditions to the Merger set forth specified in Article VII IV hereof not being satisfied; or
(k) take or agree to take any action specified in Section 2.7 hereof, or would make many representation or warranty of the Company contained herein inaccurate in enter into any respect atother material transaction other than those specified above, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention agree to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Amazon Com Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) between the date of this Agreement and the Effective Time, except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 set forth in Section 5.01 of the Company Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business businesses of the Company and its Subsidiaries shall be conducted only in the ordinary course of business and usual course and, to the extent consistent therewith, the Company shall use its reasonable best reasonable efforts to preserve its substantially intact the business organization of the Company and its Subsidiaries and to preserve substantially intact the current relationships of the Company and maintain its existing relations Subsidiaries with customersany persons with which the Company or any such Subsidiary has material business relations. Except as expressly contemplated by any other provision of this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule, suppliersneither the Company nor any of its Subsidiaries shall, employeesbetween the date of this Agreement and the Effective Time, creditors do any of the following without the prior written consent of Parent, which consent shall not be unreasonably withheld or delayed:
(a) amend or otherwise change its Amended and business partnersRestated Certificate of Incorporation, By-Laws or other similar organizational documents, or authorize or adopt (or publicly propose) a plan of complete or partial liquidation or dissolution of the Company;
(b) the Company will not, directly or indirectly, (i) issue, grant, sell, dispose of, deliver, encumber (other than Permitted Liens), or authorize any such issuance, grant, sale, disposition, delivery or encumbrance of, any shares of any class of capital stock of the Company or any of its Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest, of the Company or any of its Subsidiaries (except upon exercise for the issuance of Shares issuable pursuant to employee stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans restricted stock units, in each case, outstanding on the date hereof of this Agreement and in accordance with their present terms) or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, (ii) sell, transfer dispose of, transfer, abandon, lease, license or pledge otherwise encumber (other than Permitted Liens), or agree to sellauthorize any such sale, transfer disposition, transfer, abandonment, lease, license or pledge encumbrance of, any treasury stock properties, rights or assets of the Company beneficially owned by itor any of its Subsidiaries that are material to the Company and its Subsidiaries, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Sharestaken as a whole;
(c) the Company shall not: (i) declare, set aside aside, make or pay any dividend or other distribution distribution, payable in cash, stock stock, property or property otherwise, with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) , except for dividends or other distributions to the Company shall not: (i) grant or any increase in the compensation payable other direct or to become payable by indirect wholly owned Subsidiary of the Company to by any of its executive officers; (ii)(A) adopt any new, direct or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee indirect wholly owned Subsidiary of the Company;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any capital stock of the Company or any of its Subsidiaries (or any rights, warrants or options to acquire any such capital stock);
(e) (i) acquire (including by purchase, merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership or other business organization (or any division or business thereof); (ii) except among the Company shall not modifyand any of its wholly owned Subsidiaries and except for borrowings under existing credit facilities in the ordinary course of business, incur any indebtedness for borrowed money or issue any debt securities or calls, options, warrants or other rights to acquire debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person; (iii) except among the Company and any of its wholly owned Subsidiaries and as required in accordance with its terms, redeem, purchase, prepay, defease or cancel any indebtedness for borrowed money; (iv) except with respect to the Company or any of its wholly owned Subsidiaries, make any loans, advances, investments or capital contributions in any material amount in or to any person; (v) enter into, terminate, amend or terminate fail to renew any of contract material to the Company and its material contracts Subsidiaries, taken as a whole, or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Personclaims thereunder; or (ivvi) enter into authorize, or make any material commitment or transaction (including, but not limited with respect to, any borrowingcapital expenditures that, capital expenditure individually or purchasetaken together, sale or lease of assets or real estate);
(h) exceed by 10% the Company shall not (i) change any aggregate amount of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization annual capital expenditures budget of the Company and its Subsidiaries, taken as a whole (other than the Mergera copy of which has been previously provided to Parent);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) except as expressly contemplated by during the period from the date of this Agreement, Agreement and continuing until the Option earlier of the termination of this Agreement or the Stockholders AgreementEffective Time, unless Parent shall otherwise agree in writing, which agreement shall not be unreasonably withheld, delayed, or (ii) as disclosed on Schedule 5.2 of conditioned, the Disclosure ScheduleCompany shall, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior unless expressly authorized to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors do otherwise pursuant to Section 1.3 (the "Appointment Date"):
paragraphs (a) through (o) below, in all material respects conduct its business and shall cause the business businesses of the Company shall its subsidiaries to be conducted only in the ordinary course of business consistent with past practice, and usual course and, to the extent consistent therewith, the Company shall use its best reasonable commercial efforts to preserve its substantially intact the business organization intact of the Company and maintain its existing relations subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its subsidiaries and to preserve the present relationships of the Company and its subsidiaries with customers, supplierssuppliers and other persons with which the Company or any of its subsidiaries has a significant business relations. By way of amplification and not limitation, employeesexcept as contemplated by this Agreement, creditors neither the Company nor any of its subsidiaries shall, during the period from the date of this Agreement and business partnerscontinuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectly do, or propose to do, any of the following without the prior written consent of Parent, which consent shall not be unreasonably withheld or delayed:
(a) amend or otherwise change the Certificate of Incorporation or By-Laws of the Company or any of the Subsidiary Documents;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares ofencumber, or securities convertible into authorize the issuance, sale, pledge, disposition or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquireencumbrance of, any shares of capital stock of any class class, or any options, warrants, convertible securities, exchangeable securities or other rights of any kind to acquire any shares of capital stock of any class, or any other ownership interest (including, without limitation, any phantom interest) in the Company, other than any of its subsidiaries or affiliates (except for (i) the issuance of shares of Company Common Stock reserved for issuance on the date hereof issuable pursuant to the exercise of Stock Options or Warrants or conversion other agreements listed on Section 2.3 of Voting Debt outstanding on the date hereof; Company Disclosure Schedule and (iiiii) transfer, lease, license, the issuance of shares of Common Stock issuable to participants in the Company's Employee Stock Purchase Plan pursuant to the terms thereof);
(c) sell, mortgage, pledge, dispose of, or encumber any assets other than of the Company or any of its subsidiaries (except for (i) sales of assets in the ordinary and usual course of business and in a manner consistent with past practice, (ii) disposition of obsolete or incur worthless assets and (iii) sales of immaterial assets not in excess of $300,000;
(i) declare, set aside, make or modify pay any indebtedness dividend or other liabilitydistribution (whether in cash, other than stock or property or any combination thereof) in the ordinary and usual course respect of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) , except that a wholly owned subsidiary of the Company shall not: may declare and pay a dividend or make advances to its parent or the Company, (iii) grant any increase in the compensation payable split, combine or to become payable by the Company to reclassify any of its executive officers; (ii)(A) adopt capital stock or issue or authorize or propose the issuance of any newother securities in respect of, in lieu of or (B) amend or otherwise increasein substitution for shares of its capital stock, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any employment subsidiary to purchase, repurchase, redeem or severance agreement with orotherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, shares of Common Stock or any option, warrant, convertible or exchangeable securities or other right, directly or indirectly, to acquire shares of Common Stock, or propose to do any of the foregoing, except in accordance with for the existing written policies acceleration or termination of Stock Options pursuant to the terms of the Company, grant Company Stock Option Plans and the exercise of such Stock Options or the termination of any severance or termination pay to any officer, director or employee other arrangement providing for the issuance of the Companyshares thereunder;
(ei) the Company shall not modifyacquire (by merger, amend consolidation, or terminate any acquisition of its material contracts stock or waive, release or assign assets) any material rights property or claimsassets, make any investment in, or make any capital contributions to, any corporation, partnership or other business organization or division thereof; (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 obligations of any person or, except in the ordinary course of business and consistent with past practice;
practice or in connection with purchases of equipment or capital improvements, make any loans or advances (fother than loans or advances to or from direct or indirect wholly owned subsidiaries), (iii) the Company shall not permit enter into, terminate or amend any insurance policy naming it as a beneficiary Material Contract or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except agreement other than in the ordinary course of business and consistent with past practiceor where such contract, termination or amendment would not, individually or in the aggregate, have a Material Adverse Effect; (iv) authorize any capital expenditures or purchases of fixed assets which are, in the aggregate, in excess of $300,000; or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(e);
(gf) except as set forth in the Company shall not Disclosure Schedule, (i) incur increase the compensation or assume any long-term debtfringe benefits payable or to become payable to its directors, orofficers or employees, except for increases in salary or wages of employees of the Company or its subsidiaries in accordance with past practice and in amounts that are in the ordinary course of businessaggregate reflected in the budgets previously provided to Parent, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assumeexcept pursuant to the existing agreements set forth on Section 4.1(f) of the Company Disclosure Schedule or with respect to payments that do not exceed $100,000 in the aggregate or $50,000 per individual, guaranteegrant any severance or termination pay to, endorse or otherwise become liable enter into any severance agreement or responsible other agreement providing for severance payments with, any director, officer or other employee of the Company or any of its subsidiaries, (whether directlyiii) establish, contingently adopt, enter into or otherwise) amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the obligations benefit of any other Personcurrent or former directors, officers or employees, (iv) enter into any employment or consulting agreement except with respect to new hires of non- officer employees in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (ivv) enter into accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits; except in each of (i) through (v), as may be required by law;
(g) take any action to change material commitment accounting policies or transaction procedures (including, but not limited towithout limitation, any borrowingprocedures with respect to revenue recognition, capital expenditure or purchase, sale or lease payments of assets or real estateaccounts payable and collection of accounts receivable);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim liability or assessment or consent agree to any material Tax claim or assessment or any waiver an extension of the a statute of limitations for limitations, except to the extent the amount of any such material claim or assessmentsettlement has been reserved for in the financial statements contained in the Company SEC Reports filed prior to the date of this Agreement;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such claims, business and consistent with past practice of liabilities reflected or obligations, reserved against in the financial statements contained in the Company SEC Reports filed prior to the date of this Agreement or incurred in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) enter into any compromise or settlement of, or take any material action with respect to, any litigation, action, suit, claim, proceeding or investigation other than the Company shall not prosecution, defense and settlement of routine litigation, actions, suits, claims, proceedings or investigations in the ordinary course of business;
(k) Subject to Section 4.3 of this Agreement, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization or any agreement relating to an Acquisition Proposal (as defined in Section 4.3 of the Company (other than the Mergerthis Agreement);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) enter into any agreement, understanding or commitment that restrains, limits or impedes the Company shall not redeem Company's ability to compete with or conduct any business or line of business other than in the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation ordinary course of the Offer unless required to do so by order of a court of competent jurisdiction; andbusiness consistent with past practice;
(m) plan, announce, implement or effect any reduction in force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of Company shall or its subsidiaries, except, only with respect to employees who do not exercise the functions of general manager, the equivalent or higher, in the ordinary course of business consistent with past practice;
(n) enter into any new agreement to acquire or rent accommodations in an agreementamount in excess of $100,000 or which will remain in effect for longer than one year from the date hereof or with terms other than ordinary course of business terms consistent with past practice; or
(o) take, contractor agree in writing or otherwise to take, commitment or arrangement to do any of the foregoingactions described in Sections 4.1(a) through (n) above, or to authorize, recommend, propose or announce an intention to do any action which would make any of the foregoingrepresentations or warranties of the Company contained in this Agreement untrue or incorrect in any material respect or prevent the Company from performing, or cause the Company not to perform, its covenants hereunder.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. (a) The Company covenants and agrees that, (i) between the date of this Agreement and the Effective Time, except as expressly contemplated by any other provision of this Agreement, the Option Agreement or as set forth in Section 6.01 of the Stockholders AgreementCompany Disclosure Schedule, or unless BioSante shall otherwise consent in writing:
(i) the businesses of the Company and the Subsidiaries shall be conducted in all material respects to keep substantially intact the business, properties and assets of the Company and the Subsidiaries, taken as a whole; and
(ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its reasonable best reasonable efforts to preserve its business organization intact keep available the services of the current executive officers of the Company and maintain its existing relations with customers, suppliers, employees, creditors and business partners;the Subsidiaries.
(b) By way of amplification and not limitation, except as expressly contemplated by any other provision of this Agreement or as set forth in Section 6.01 of the Company will notDisclosure Schedule, neither the Company nor any Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, do any of the following without the prior written consent of BioSante:
(i) except upon exercise amend or otherwise change its certificate of stock options incorporation or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof bylaws or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar equivalent organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, grant or securities convertible into or exchangeable forencumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of (A) any shares of any class of capital stock of the Company or any Subsidiary, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of stock, or any class other ownership interest (including any phantom interest), of the Company, other than shares Company or any Subsidiary (except for (1) the issuance of Company Common Stock reserved for issuance on the date hereof Shares issuable pursuant to the exercise of Company Stock Options or Warrants or conversion of Voting Debt outstanding on the date hereof; of this Agreement, (2) the grant of Company Restricted Awards as disclosed in Section 4.03 of the Company Disclosure Schedule, (3) the issuance of shares of stock of any Subsidiary to the Company or a wholly-owned Subsidiary, (4) the issuance of Shares upon conversion of the Convertible Notes, or (5) the issuance of Shares upon the exercise of Warrants or pursuant to the terms of the Warrant Exchange Agreement), or (B) any assets (other than immaterial assets) of the Company or any Subsidiary;
(iii) transferdeclare, leaseset aside, license, sell, mortgage, pledge, dispose of, make or encumber pay any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness dividend or other liabilitydistribution, other than payable in the ordinary and usual course of business and consistent cash, stock, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock, except for any dividend or other distribution made by any Subsidiary to the Company or a wholly-owned Subsidiary;
(div) the Company shall not: (i) grant any increase in the compensation payable reclassify, combine, split, subdivide or to become payable by the Company to redeem, or purchase or otherwise acquire, directly or indirectly, any of its executive officerscapital stock or other securities;
(v) (A) acquire any assets (including by merger, consolidation, acquisition of stock or other equity interests of any corporation, partnership, other business organization or any division thereof or any other business combination); (ii)(A) adopt any new, or (B) amend other than indebtedness existing as of the date of this Agreement, incur any indebtedness for borrowed money, other than trade payables, or issue any debt securities or assume, guarantee or endorse, or otherwise increasebecome responsible for, the obligations of any person, or accelerate the payment make any loans or vesting advances, or grant any security interest in any of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangementits assets; or (iiiC) enter into any employment contract or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
other than (ex) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practicepractice and (y) in an aggregate amount not to exceed $50,000; (D) authorize, or make any commitment with respect to, any single capital expenditure that is not set forth in the capital expenditure budget provided to BioSante prior to the date of this Agreement, except for capital expenditures reasonably required to respond to emergency-type occurrences involving life, health, personal safety or the protection of property; or (E) repay, purchase, re-purchase or redeem, in whole or in part, any Convertible Notes, or otherwise make any payment with respect thereto, other than payment of interest in accordance with the term thereof; (F) take any action (other than those required in connection with the consummation of the Merger) that would result in any change to the Conversion Price (each as defined in the Old Notes Indenture and the New Notes Indenture); or (G) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 6.01(b)(v) or enter into any contract that would be a Company Material Contract;
(fvi) exercise its discretion, including exercising its discretion to accelerate vesting, with respect to any Company Stock Option or Company Restricted Award (except as contemplated by this Agreement);
(vii) make any change, other than as may be required by GAAP or as a result of a change of law, with respect to accounting policies or procedures;
(viii) except for the actions described in Section 6.01(b)(viii) of the Company shall not permit Disclosure Schedule, make or change any insurance policy naming it as a beneficiary material Tax election or a loss payable payee to be cancelled or terminated without notice method of Tax accounting, amend any material Tax Return filed prior to the Purchaserdate of this Agreement, except settle or compromise any material Tax liability, consent to any material claim or assessment relating to Taxes, or waive any statute of limitations in respect of a material amount of Taxes or agree to any extension of time with respect to an assessment or deficiency for a material amount of Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(hix) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claimsmaterial claim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligationssatisfaction, in the ordinary course of business and consistent with past practice, or claims, of liabilities or obligations (A) reflected or reserved against inin the Company Balance Sheet, (B) incurred under agreements or other obligations existing as of the date of this Agreement or (C) subsequently incurred in the ordinary course of business and consistent with past practice;
(x) amend, renew, modify or consent to the termination of any Company Material Contract or Company Plan, or contemplated byamend, waive, modify or consent to the consolidated financial statements (or the notes thereto) termination of the Company’s or any Subsidiary’s material rights thereunder;
(jxi) commence or settle any Action, including any Action relating to this Agreement or the Company shall not adopt a plan of complete or partial liquidationtransactions contemplated hereby, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger)but excluding any Action against BioSante to enforce this Agreement;
(kxii) fail to make in a timely manner any filings with the Company shall not takeSEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder
(xiii) except as permitted by the terms of this Agreement (including Section 7.05), or agree to commit to take, take any action that would, is intended to or is would reasonably likely to, be expected to result in any of the conditions to the Merger set forth in Article VII VIII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;; or
(lxiv) the Company shall not redeem the Rights or terminatepublicly announce an intention, amend enter into any agreement or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of make a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) between the date of this Agreement and the Effective Time, except as expressly contemplated by any other provision of this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed unless Parent shall otherwise consent in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):writing:
(a) the business businesses of the Company and the Company Subsidiaries shall be conducted only in in, and the Company and the Company Subsidiaries shall not take any action except in, the ordinary course of business and usual course in a manner consistent with past practice; and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will notshall use its reasonable best efforts to preserve substantially intact its business organization, to keep available the services of the current officers, employees and consultants of the Company and the Company Subsidiaries and to preserve the current relationships of the Company and the Company Subsidiaries with customers, suppliers and other persons with which the Company or any Company Subsidiary has significant business relations. By way of amplification and not limitation, except as contemplated by this Agreement, neither the Company nor any Company Subsidiary shall, between the date of this Agreement and the Effective Time, directly or indirectly, (i) except upon exercise of stock options do, or other rights propose to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtdo, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, following without the prior written consent of Parent:
(iia) amend or otherwise change its Restated Certificate Articles of Incorporation or Bylaws By-Laws or similar equivalent organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iib) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable forgrant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of its capital stock of any class, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of stock, or any class other ownership interest (including, without limitation, any phantom interest), of the CompanyCompany or any Company Subsidiary or (ii) any Material assets of the Company or any Company Subsidiary, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than except in the ordinary and usual course of business and in a manner consistent with past practice;
(c) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, other than payable in the ordinary and usual course of business and consistent cash, stock, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable reclassify, combine, split, subdivide or to become payable by the Company to redeem, purchase or otherwise acquire, directly or indirectly, any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Companycapital stock;
(e) the Company shall not modify(i)acquire (including, amend without limitation, by merger, consolidation, or terminate acquisition of stock or assets) any interest in any corporation, partnership, other business organization or any division thereof or any assets, other than acquisitions of its material contracts or waive, release or assign any material rights or claims, except assets in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.:
Appears in 1 contract
Samples: Merger Agreement (Deep Down, Inc.)
Conduct of Business by the Company Pending the Merger. The Company covenants During the period from the date of this Agreement and agrees that, (i) except as expressly contemplated by continuing until the earlier of the termination of this Agreement, the Option Agreement or the Stockholders AgreementEffective Time, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only agrees to carry on its business in the usual, regular and ordinary course and usual course in substantially the same manner as previously conducted, to pay its debts and Taxes when due (subject to good faith disputes over such debts or Taxes), to pay or perform other obligations when due and, to the extent consistent therewithwith such business, the Company shall to use its best all reasonable efforts consistent with past practices and policies to preserve intact its present business organization intact organization, keep available the services of its present officers and maintain key employees and consultants and preserve its existing relations relationships with customers, suppliers, employeesdistributors, creditors licensors, licensees, and others having business partners;
(b) dealings with it, to the end that its goodwill and ongoing businesses would be substantially identical at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not in the ordinary course of business of the Company. By way of amplification and not limitation, except as specifically contemplated by this Agreement or as specifically set forth in Section 6.01 of the Company will Disclosure Schedule, the Company shall not, between the date of this Agreement and the Effective Time, directly or indirectly, (i) except upon exercise of stock options do, or other rights propose to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtdo, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by itfollowing without the prior written consent, which consent shall not be unreasonably withheld, of Parent:
(iia) amend its Restated Certificate of Incorporation or Bylaws otherwise change the Company Charter Documents or similar equivalent organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iib) issue, sell, pledge, dispose of or encumber any additional shares of, grant, encumber, authorize or securities convertible into propose the issuance, sale, pledge, disposition, grant or exchangeable forencumbrance of any shares of its capital stock of any class, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of or any class other ownership interest (including, without limitation, any phantom interest), of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof except pursuant to the exercise terms of Options options, warrants or Warrants or conversion of Voting Debt preferred stock outstanding on the date hereof; of this Agreement;
(iiic) transfersell, lease, license, sell, mortgage, pledge, dispose ofgrant, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly dispose of any of its capital stockproperties or assets which are material, individually or in the aggregate, to its business;
(d) split, combine, subdivide, redeem or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or purchase or otherwise acquire, directly or indirectly, any shares of its equity interests except from former employees, managers, directors and consultants in accordance with agreements providing for the repurchase of shares in connection with any termination of service by such party;
(e) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest or any assets in any corporation, partnership, other business organization or any division thereof;
(f) institute or settle any Legal Proceeding for an amount greater than $100,000, except as related to Legal Proceedings disclosed in Section 3.10 of the Company shall not: Disclosure Schedule;
(g) 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 obligations of any person, or make any loans or advances other than such indebtedness described herein and as to be included on the Estimated Closing Balance Sheet;
(h) authorize any unbudgeted capital expenditure in excess of $100,000, individually or in the aggregate;
(i) grant enter into any increase lease or contract for the purchase or sale of any property, real or personal, in an amount greater than $50,000 on an annual basis;
(j) waive or release any material right or claim;
(k) except as set forth on Schedule 6.01(k), increase, or agree to increase, the compensation payable payable, or to become payable payable, to its (i) officers or (ii) employees (provided that any employee’s annual compensation may be increased by the Company an amount not to any exceed 10% of its executive officers; (ii)(A) adopt any newsuch employee’s current annual base salary), or (B) amend grant any severance or otherwise increasetermination pay to, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with orwith, except in accordance with the existing written policies any of the Companyits managers, grant officers or other employees, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or termination pay other Plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; provided, however, that the foregoing provisions of this subsection shall not apply to any officer, director or amendments to employee benefit plans described in Section 3(3) of the CompanyERISA that may be required by Law;
(el) accelerate, amend or change the period of exercisability or the vesting schedule of restricted stock or Company Options granted under any option plan, employee stock plan or other agreement or authorize cash payments in exchange for any Company Options granted under any of such plans, except as specifically required by the terms of such plans or any such agreement or any related agreement in effect as of the date of this Agreement and disclosed in the Company shall not modifyDisclosure Schedule;
(m) extend any offers of employment to potential employees, consultants or independent contractors or terminate any existing employment relationships for which the annual remuneration is greater than $200,000;
(n) enter into, amend or terminate any of its material contracts Material Contract;
(o) enter into, amend or waiveterminate any contract, release agreement, commitment or assign any material rights or claimsarrangement that, except if fully performed, would not be permitted under this Section 6.01;
(p) other than in the ordinary course of business and consistent with past practice, enter into any licensing, distribution, OEM agreements, sponsorship, advertising, merchant program or other similar contracts, agreements or obligations that may not be cancelled without penalties by the Company upon notice of 30 days or less;
(fq) take any action, other than reasonable and usual action in the ordinary course of business, consistent with past practice, with respect to accounting policies, principles or procedures;
(r) make or change any Tax or accounting election, change any annual accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax claim or assessment relating to the Company, surrender any right to claim refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to the Company, or take any other action or omit to take any action that would have the effect of increasing the Tax liability of the Company shall or Parent;
(s) (i) sell, assign, lease, terminate, abandon, transfer, permit to be encumbered or otherwise dispose of or grant any security interest in and to any item of the Company Intellectual Property, in whole or in part, (ii) grant any license with respect to any Company Intellectual Property, other than a license of Software granted to customers of the Company to whom the Company licenses such Software in the ordinary course of business, (iii) develop, create or invent any Intellectual Property jointly with any third party, or (iv) disclose, or allow to be disclosed, any confidential Company Intellectual Property, unless such Company Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof;
(t) make (or become obligated to make) any bonus payments to any of its officers or employees except: (1) for those for which the Company is simultaneously fully reimbursed or (2) between the execution date hereof and the Effective Time, bonus payments to certain employees not covered by the Incentive Plan in an amount not to exceed an aggregate of $500,000;
(u) revalue any of its assets, including writing down the value of inventory or writing off notes or accounts receivable;
(v) fail to maintain its equipment and other assets in good working condition and repair according to the standards it has maintained up to the date of this Agreement, subject only to ordinary wear and tear, unless it is more commercially reasonable to replace any such asset in the ordinary course of Company’s business;
(w) take any action or fail to take any reasonable action that would cause there to be a Company Material Adverse Effect;
(x) permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated and not replaced by a substantially similar replacement policy without notice to the Purchaser, Parent;
(y) except in the ordinary course of business and consistent with past practice;
(g) its business, the Company shall will not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions towrite off as uncollectible, or investments in, establish any other Person; or (iv) enter into any material commitment or transaction (including, but not limited extraordinary reserve with respect to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization account receivable or other reorganization right of the Company (other than to customer remittances for services in excess of $150,000 with respect to a single matter, or in excess of $450,000 in the Merger);aggregate; or
(kz) the Company shall not take, or agree to commit in writing or otherwise to take, any action that wouldof the actions described in subsections (a) through (y) above, or any action which is reasonably likely to, result in to make any of the conditions Company’s representations or warranties contained in this Agreement untrue or incorrect on the date made (to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, extent so limited) or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company covenants and agrees that, (i) unless Parent shall otherwise agree in writing, the Company shall conduct its business and shall cause the businesses of its subsidiaries to be conducted only in, and the Company and its subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use reasonable commercial efforts to preserve substantially intact the business organization of the Company and its subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its subsidiaries, to prevent the loss, cancellation, abandonment, forfeiture or expiration of any Company Intellectual Property, and to preserve the present relationships of the Company and its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except as expressly contemplated by this Agreement, neither the Option Company nor any of its subsidiaries shall, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Stockholders AgreementEffective Time, directly or indirectly do, or (ii) as disclosed on Schedule 5.2 propose to do, any of the Disclosure Schedule, or (iii) as agreed in writing by following without the Purchaser, after the date hereof, and prior to the time the directors written consent of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
Parent: (a) amend or otherwise change the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Company's Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stockBy-Laws; (iib) issue, sell, pledge, dispose of or encumber any additional shares ofencumber, or securities convertible into authorize the issuance, sale, pledge, disposition or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquireencumbrance of, any shares of capital stock of any class class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including, without limitation, any phantom interest) of the Company, other any of its subsidiaries or affiliates (except for the issuance of shares of the Company Common Stock issuable pursuant to stock options under the Company Stock Option Plans (as defined in Section 5.05) or pursuant to rights to purchase such shares under the Company Stock Purchase Plan (as defined in Section 5.06), which options or rights, as the case may be, are outstanding on the date hereof); provided, however, that the Company may grant stock options under the Company Stock Option Plans to employees hired subsequent to August 26, 1995 so long as (i) such options vest ratably over a period of not less than four years and (ii) no person hired to serve as an officer of the Company shall receive option grants for more than 40,000 shares of Company Common Stock reserved for issuance and no other person shall receive option grants in excess of the Company's standard policies and practices in effect at the date of this Agreement, copies of which have been provided to Parent; and provided, further, that the Company may continue to offer rights to purchase Company Common Stock pursuant to the Company Stock Purchase Plan as in effect on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereofthis Agreement; (iiic) transfer, lease, license, sell, mortgage, pledge, dispose of, of or encumber any material assets other than in of the ordinary and usual course of business and consistent with past practice, Company or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
subsidiaries (d) the Company shall not: except for (i) grant any increase in the compensation payable or to become payable by the Company to any sales of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except assets in the ordinary course of business and in a manner consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business practice and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse dispositions of obsolete or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practiceworthless assets); (iiid) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminateaccelerate, amend or otherwise modify change the Rights Agreement prior to period (or permit any acceleration, amendment or change) of exercisability of options granted under the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
Employee Plans (m) including the Company shall not enter into an agreement, contract, commitment Stock Option Plans or arrangement to do authorize cash payments in exchange for any options granted under any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.such plans; (e)
Appears in 1 contract
Samples: Merger Agreement (Teradyne Inc)
Conduct of Business by the Company Pending the Merger. The During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company covenants and agrees that, (i) unless Parent shall otherwise agree in writing, the Company shall conduct its business and shall cause the businesses of its subsidiaries to be conducted only in, and the Company and its subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use reasonable commercial efforts to preserve substantially intact the business organization of the Company and its subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its subsidiaries, to prevent the loss, cancellation, abandonment, forfeiture or expiration of any Company Intellectual Property, and to preserve the present relationships of the Company and its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except as expressly contemplated by this Agreement, neither the Option Company nor any of its subsidiaries shall, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Stockholders AgreementEffective Time, directly or indirectly do, or (ii) as disclosed on Schedule 5.2 propose to do, any of the Disclosure Schedule, or (iii) as agreed in writing by following without the Purchaser, after the date hereof, and prior to the time the directors written consent of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
Parent: (a) amend or otherwise change the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Company's Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stockBy-Laws; (iib) issue, sell, pledge, dispose of or encumber any additional shares ofencumber, or securities convertible into authorize the issuance, sale, pledge, disposition or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquireencumbrance of, any shares of capital stock of any class class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including, without limitation, any phantom interest) of the Company, other any of its subsidiaries or affiliates (except for the issuance of shares of the Company Common Stock issuable pursuant to stock options under the Company Stock Option Plans (as defined in Section 5.05) or pursuant to rights to purchase such shares under the Company Stock Purchase Plan (as defined in Section 5.06), which options or rights, as the case may be, are outstanding on the date hereof); provided, however, that the Company may grant stock 22 27 options under the Company Stock Option Plans to employees hired subsequent to August 26, 1995 so long as (i) such options vest ratably over a period of not less than four years and (ii) no person hired to serve as an officer of the Company shall receive option grants for more than 40,000 shares of Company Common Stock reserved for issuance and no other person shall receive option grants in excess of the Company's standard policies and practices in effect at the date of this Agreement, copies of which have been provided to Parent; and provided, further, that the Company may continue to offer rights to purchase Company Common Stock pursuant to the Company Stock Purchase Plan as in effect on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereofthis Agreement; (iiic) transfer, lease, license, sell, mortgage, pledge, dispose of, of or encumber any material assets other than in of the ordinary and usual course of business and consistent with past practice, Company or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
subsidiaries (d) the Company shall not: except for (i) grant any increase in the compensation payable or to become payable by the Company to any sales of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except assets in the ordinary course of business and in a manner consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business practice and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse dispositions of obsolete or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practiceworthless assets); (iiid) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminateaccelerate, amend or otherwise modify change the Rights Agreement prior to period (or permit any acceleration, amendment or change) of exercisability of options granted under the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
Employee Plans (m) including the Company shall not enter into an agreement, contract, commitment Stock Option Plans or arrangement to do authorize cash payments in exchange for any options granted under any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.such plans; (e)
Appears in 1 contract
Samples: Merger Agreement (Megatest Corp)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees thatUnless Amazxx.xxx xxxll otherwise agree in writing, (i) except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted in and only in in, and the Company shall not take any action except in, the ordinary course of business and usual course and, to the extent in a manner consistent therewith, with past practice and in accordance with applicable law; and the Company shall use its best reasonable efforts to preserve its intact the business organization intact of the Company, to keep available the services of the current officers, employees and maintain its existing relations with consultants of the Company and to preserve the current relationships of the Company with, and the goodwill of, customers, suppliers, employees, creditors suppliers and business partners;
(b) other Persons with which the Company will has significant business relations. By way of amplification and not limitation, except as otherwise contemplated by this Agreement, the Company shall not, between the date of this Agreement and the Effective Time, directly or indirectlyindirectly do, (i) except upon exercise of stock options or other rights propose to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtdo, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, following without the prior written consent of Amazxx.xxx:
(iia) amend or otherwise change its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding SharesBylaws;
(cb) except for the issuance of shares of Company shall not: (i) declareCapital Stock upon the exercise or conversion of currently outstanding Options, set aside Warrants, Company Series A Stock, Company Series B Stock, Company Series C Stock or pay any dividend or other distribution payable in cashConvertible Notes, stock or property with respect to its capital stock; (ii) issue, sell, contract to issue or sell, pledge, dispose of or encumber any additional shares of, grant, encumber or securities convertible into authorize the issuance, sale, pledge, disposition, grant or exchangeable for, or options, warrants, calls, commitments or rights Encumbrance of any kind to acquire, (i) any shares of capital stock of any class of the Company, or any options, warrants, convertible securities or other than rights of any kind to acquire any shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose ofsuch capital stock, or encumber any other ownership interest (including, without limitation, any phantom interest) of the Company, or (ii) any assets other than of the Company, except in the ordinary and usual course of business and in a manner consistent with past practice;
(c) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, payable in cash, stock or other than in the ordinary and usual course of business and consistent securities, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable reclassify, combine, split, subdivide, redeem, purchase or to become payable by the Company to otherwise acquire, directly or indirectly, any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, capital stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Companysecurities;
(e) the Company shall not modify(i) acquire (including, amend without limitation, by merger, consolidation, or terminate acquisition of stock or assets) any of its material contracts corporation, partnership, other business organization or waive, release division thereof or assign any material rights amount of assets; (ii) incur any indebtedness for borrowed money or claimsissue 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 and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary 51 course of business and consistent with past practice; (iii) enter into any contract or agreement other than in the ordinary course expense advancesof business, make consistent with past practice; (iv) authorize any loans, advances single capital expenditure which is in excess of $25,000 or capital contributions toexpenditures which are, or investments inin the aggregate, any other Personin excess of $100,000 for the Company taken as a whole; or (ivv) enter into any material agreement in which the obligation of the Company exceeds $25,000 or which shall not terminate or be subject to termination for convenience within 180 days following execution; (vi) license any Technology or IP Rights other than in the ordinary course of business, consistent with past practice; or (vii) enter into or amend any contract, agreement, commitment or transaction arrangement with respect to any matter set forth in this subsection (e);
(f) enter into or amend any employment, consulting or agency agreement, or increase the compensation payable or to become payable to its officers, employees, agents or consultants, or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee of the Company, or establish, adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance, benefit or other plan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee;
(g) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting methods, policies or procedures (including, but not limited towithout limitation, any borrowing, capital expenditure or purchase, sale or lease procedures with respect to the payment of assets or real estateaccounts payable and collection of accounts receivable);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax electiontax election or settle or compromise any federal, change any material Tax election already madestate, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim local or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessmentforeign income tax liability;
(i) the Company shall not pay, discharge or satisfy any claimsclaim, liabilities liability or obligations obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, take any action that would, would or is reasonably likely toto result in any of the representations and warranties of the Company set forth in this Agreement being untrue in any material respect, result or in any covenant of the Company set forth in this Agreement being breached, or in any of the conditions to the Merger set forth specified in Article VII IV hereof not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;; or
(lk) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention agree to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Amazon Com Inc)
Conduct of Business by the Company Pending the Merger. The During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company covenants and agrees that, (i) except unless Acquiror shall otherwise agree in writing or as expressly contemplated by required or permitted under this Agreement, the Option Company shall conduct its business only in, and the Company shall not take any action except in the Ordinary Course of Business; and the Company shall use its commercially reasonable efforts to preserve substantially intact the business organization of the Company, to keep available the services of the present officers, employees and consultants of the Company and its subsidiaries and to 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, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Stockholders AgreementEffective Time, directly or indirectly do, or (ii) as disclosed on Schedule 5.2 propose to do, any of the Disclosure Schedule, or following without the prior written consent of Acquiror (iii) as agreed in writing by the Purchaser, after the date hereof, and prior not to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"be unreasonably withheld):
(a) amend or otherwise change the business Company’s articles of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnersincorporation or bylaws;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, or securities convertible into or exchangeable forany shares of Company Stock of any class, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of capital stock of Company Stock, or any class other ownership interest (including, without limitation, any phantom interest) of the Company, other than shares any subsidiary or any of Company Common Stock reserved for issuance on the date hereof pursuant to its Affiliates (except the exercise of Options or Warrants or conversion of Voting Debt currently outstanding on the date hereof; options and warrants in accordance with their terms);
(iiic) transfer, lease, license, sell, mortgage, pledge, dispose of, of or encumber any assets other than or inventory of the Company or of any subsidiary or take any action that would reasonably be expected to result in any damage to, destruction or loss of any material asset of the ordinary and usual course of business and consistent with past practice, Company (whether or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stocknot covered by insurance);
(d) except as is contemplated by this Agreement, or the applicable award agreement or Employee Plan or pursuant to a written contractual agreement with an award recipient set forth on Section 7.2(d) of the Company shall not: Disclosure Schedule, accelerate, amend or change the period (or permit any acceleration, amendment or change) of exercisability of options or restricted stock granted under the Plans (including the Company Stock Option Plan) or authorize cash payments in exchange for any options granted under any of such plans;
(i) grant declare, set aside, make or pay any increase dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any of its common stock, (ii) split, combine or reclassify any of its common stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its common stock, (iii) amend the terms of, repurchase, redeem or otherwise acquire, or permit any subsidiary to repurchase, redeem or otherwise acquire, any of its securities or any securities of a subsidiary, except in accordance with preexisting commitments as of the date hereof, or propose to do any of the foregoing;
(f) (i) acquire (by merger, consolidation, or acquisition of stock or assets) any company, corporation, partnership or other business organization or division thereof, or enter into or amend any contract, agreement, commitment or arrangement to effect any such acquisition, (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse (other than checks in the Ordinary Course of Business) or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances; (iii) to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any Entity; (iv) to enter into or amend any material agreement or contract which provides for the sale, license, or purchase by the Company or any of its subsidiaries of assets; (v) authorize any capital expenditures or purchase of fixed assets which are individually in excess of $10,000 or, in the aggregate, in excess of $50,000; or (vi) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 7.2(f);
(g) increase the compensation or fringe benefits payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any newofficers or employees, or (B) amend grant any severance or otherwise increasetermination pay to, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with any director, officer, or, except in accordance with the existing written policies of the Companyestablish, grant adopt, enter into or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or termination pay to other plan, agreement, trust, fund, policy or arrangement for the benefit of any officercurrent or former directors, director officers or employees, except, in each case, as may be required by law or as expressly contemplated by this Agreement, or terminate any employee of the Company;
(eh) the Company shall not modify, amend take any action to change accounting policies or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction procedures (including, but not limited towithout limitation, any borrowingprocedures with respect to revenue recognition, capital expenditure or purchase, sale or lease payments of assets or real estate);
accounts payable and collection of accounts receivable) (h) the Company shall not (i) change any of the accounting methods used by it unless except as required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment);
(i) the Company shall not make any material Tax election inconsistent with past practices or settle or compromise any material federal, state, local or foreign Tax liability or agree to an extension of a statute of limitations;
(j) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course Ordinary Course of business Business and consistent with past practiceexcept for Third Party Expenses, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger)as defined in Section 10.3 hereof;
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummationenter into discussions regarding material customer contracts;
(l) engage in any action or enter into any transaction or permit any action to be taken or transaction to be entered into that could reasonably be expected to delay the Company shall not redeem the Rights or terminateconsummation of, amend or otherwise modify the Rights Agreement prior to the consummation adversely affect, any of the Offer unless required Transactions;
(m) undertake any revaluation of any of the Company’s or any subsidiary’s assets, including, without limitation, writing down the value of inventory or writing off notes or accounts receivable other than in the Ordinary Course of Business or in accordance with GAAP;
(n) take, or allow to do so by order be taken or fail to take any action which act or omission would jeopardize qualification of the Merger as a court reorganization within the meaning of competent jurisdictionSection 368(a) of the Code; and
(mo) the Company shall not enter into an agreementtake, contractor agree in writing or otherwise to take, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingactions described in Sections 7.2(a) through (n).
Appears in 1 contract
Samples: Merger Agreement (Bea Systems Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees thatPrior to the Effective Time, (i) except unless Parent or Acquisition Corp. shall otherwise agree in writing or as expressly otherwise contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date")::
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnerscourse;
(b) the Company will not, directly or indirectly, shall not (i) except upon exercise of stock options directly or other rights to indirectly redeem, purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge otherwise acquire or agree to sellredeem, transfer purchase or pledge otherwise acquire any treasury stock shares of the Company beneficially owned by it, its capital stock; (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; By-laws except to effectuate the transactions contemplated in the Disclosures or (iii) split, combine or reclassify the outstanding SharesCompany Stock or declare, set aside or pay any dividend payable in cash, stock or property or make any distribution with respect to any such stock;
(c) the Company shall not: not (i) declare, set aside issue or pay any dividend or other distribution payable in cash, stock or property with respect agree to its capital stock; (ii) issue, sell, pledge, dispose of or encumber issue any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments warrants or rights of any kind to acquire, acquire any shares of capital stock of any class of the Companyof, other than Company Common Stock, except to issue shares of Company Common Stock reserved for issuance on the date hereof pursuant in connection with any matter relating to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereofDisclosures; (iiiii) transfer, lease, license, sell, mortgage, pledge, acquire or dispose of, of any fixed assets or encumber acquire or dispose of any other substantial assets other than in the ordinary and usual course of business and consistent with past practice, business; (iii) incur additional Indebtedness or incur any other liabilities or modify enter into any indebtedness or other liability, transaction other than in the ordinary and usual course of business and consistent with past practicebusiness; or (iv) redeementer into any contract, purchase agreement, commitment or otherwise acquire directly or indirectly arrangement with respect to any of its capital stockthe foregoing or (v) except as contemplated by this Agreement, enter into any contract, agreement, commitment or arrangement to dissolve, merge, consolidate or enter into any other material business combination;
(d) the Company shall not: (i) grant any increase in use its best efforts to preserve intact the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies business organization of the Company, grant any severance or termination pay to any officerkeep available the service of its present officers and key employees, director or employee and to preserve the good will of the Companythose having business relationships with it;
(e) the Company shall not modifywill not, amend nor will it authorize any director or terminate any of its material contracts authorize or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming officer or employee or any attorney, accountant or other representative retained by it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaserto, except in the ordinary course of business and consistent make, solicit, encourage any inquiries with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions respect to, or investments inengage in any negotiations concerning, any other Person; or Acquisition Proposal (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease as defined below for purposes of assets or real estatethis paragraph);
(h) the . The Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction will promptly advise Parent orally and in writing of any such claims, liabilities inquiries or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements proposals (or requests for information) and the notes thereto) of the Company;
(j) substance thereof. As used in this paragraph, “Acquisition Proposal” shall mean any proposal for a merger or other business combination involving the Company shall not adopt or for the acquisition of a plan substantial equity interest in it or any material assets of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (it other than the Merger);
(k) the as contemplated by this Agreement. The Company shall not takewill immediately cease and cause to be terminated any existing activities, discussions or agree negotiations with any Person conducted heretofore with respect to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.; and
Appears in 1 contract
Samples: Merger Agreement (InZon CORP)
Conduct of Business by the Company Pending the Merger. The Pursuant to the Merger Agreement, the Company covenants and agrees has agreed that, between the date of the Merger Agreement and the Effective Time, unless CSG will otherwise agree in writing, the businesses of the Company and its subsidiaries (ithe "Subsidiaries" and, individually, a "Subsidiary") will be conducted only in, and the Company and the Subsidiaries will not take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company will use its reasonable best efforts to preserve substantially intact the business organization of the Company and the Subsidiaries, to keep available the services of the current officers, employees and consultants of the Company and the Subsidiaries consistent with the plans and objectives previously discussed between CSG and the Company, and to preserve the current relationships of the Company and the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. The Merger Agreement provides that, except as expressly contemplated by this Agreementtherein, neither the Option Agreement or Company nor any Subsidiary will, between the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 date of the Disclosure Schedule, or (iii) as agreed in writing by Merger Agreement and the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will notEffective Time, directly or indirectly, (i) except upon exercise of stock options do, or other rights propose to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debtdo, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, following without the prior written consent of CSG: (iia) amend or otherwise change its Restated Certificate of Incorporation or Bylaws By-laws or similar equivalent organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iib) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable forgrant, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of any class of capital stock of the Company or any Subsidiary, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of stock, or any class other ownership interest (including, without limitation, any phantom interest), of the Company, other than shares Company or any Subsidiary (except for the issuance of Company Common Stock reserved for issuance on the date hereof Shares issuable pursuant to the exercise of Options or Warrants or conversion of Voting Debt employee stock options outstanding on the date hereof; of the Merger Agreement) or (iiiii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than of the Company or any Subsidiary, except, in the ordinary and usual course case of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or this clause (ivii) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and in a manner consistent with past practice;
practice or pursuant to agreements in force as of the date of the Merger Agreement that have been disclosed to CSG; (fc) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for dividends by any direct or indirect wholly owned Subsidiary to the Company shall not permit or any insurance policy naming it as a beneficiary or a loss other Subsidiary, dividends payable payee to be cancelled or terminated without notice to in respect of the PurchaserSeries A Company Preferred Stock and the Series B Company Preferred Stock in accordance with their respective Certificates of Designation, except and regular quarterly dividends on Shares declared and paid in the ordinary course of business and cash at times consistent with past practice;
(g) the Company shall practice in an aggregate amount not (i) incur or assume any long-term debt, or, except in the ordinary course excess of business, incur or assume any short-term indebtedness in amounts not consistent with past practice$.0625 per share; (iid) assumereclassify, guaranteecombine, endorse split, subdivide or redeem, or purchase or otherwise become liable acquire, directly or responsible (whether directlyindirectly, contingently or otherwise) for the obligations any of any other Person, except in the ordinary course of business and consistent with past practiceits capital stock; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estatee);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after between the date hereofof this Agreement and the Effective Time, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only in in, and the Company shall not take any action except in, the ordinary and usual course andof business, to the extent consistent therewith, the with past practice. The Company shall use its best reasonable efforts to preserve intact its business organization intact organization, to keep available the services of its current officers, employees and maintain consultants, and to preserve its existing relations present relationships with customers, supplierssuppliers and other persons with which it has significant business relations. By way of amplification and not limitation, employeesexcept as contemplated by this Agreement, creditors and business partners;
(b) the Company will shall not, between the date of this Agreement and the Effective Time, directly or indirectly, (i) except upon exercise of stock options do or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge propose or agree to sell, transfer or pledge do any treasury stock of the Company beneficially owned by it, following without the prior written consent of Republic:
(iia) amend or otherwise change its Restated Certificate articles of Incorporation incorporation or Bylaws bylaws or similar equivalent organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable forencumber, or, authorize the issuance, sale, pledge, disposition, or encumbrance of any shares of its capital stock of any class, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock stock, or any other ownership interest, of any class of it (except the Company, other than Company may issue additional shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options Shareholders in accordance with Section 5.17 and 5.18); or Warrants or conversion of Voting Debt outstanding on the date hereof; (iiiii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than encumber, or authorize the sale, pledge, disposition or encumbrance of its assets, tangible or intangible, except in the ordinary and usual course of business and consistent with past practice;
(c) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, other than payable in cash, stock, property or otherwise, with respect to any of its capital stock or pay any bonuses to the ordinary and usual course of business and consistent with past practice; Shareholders or the Taorminas;
(ivd) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire acquire, directly or indirectly indirectly, any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable acquire (including, without limitation, for cash or to become payable shares of stock, by the Company to any of its executive officers; (ii)(A) adopt any newmerger, consolidation, or (Bacquisition of stock or assets) amend any interest in any corporation, partnership or otherwise increaseother business organization or division thereof or any assets, or accelerate the payment make any investment either by purchase of stock or vesting securities, contributions of the amounts payable capital or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debtproperty transfer, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice, purchase any property or assets of any other Person (except as provided for in Sections 5.17 and 5.18); (ii) assumeincur any indebtedness for borrowed money or issue any debt securities or assume (except as provided for in Sections 5.17 and 5.18), guarantee, guarantee or endorse or otherwise as an accommodation become liable or responsible (whether directlyfor, contingently or otherwise) for the obligations of any other Person, or make any loans or advances; or (iii) enter into any Contract other than in the ordinary course of business, consistent with past practice;
(f) increase the compensation payable or to become payable to its officers or employees, or, except as presently bound to do, grant any severance or termination pay to, or enter into any employment or severance agreement with, any of its directors, officers or other employees, or establish, adopt, enter into or amend or take any action to accelerate any rights or benefits which any collective bargaining, bonus, profit sharing, trust, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees;
(g) take any action other than in the ordinary course of business and in a manner consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances practice with respect to accounting policies or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)procedures;
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any existing claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such claimsbusiness and consistent with past practice of due and payable liabilities reflected or reserved against in its financial statements, as appropriate, or liabilities or obligations, incurred after the date hereof in the ordinary course of business and consistent with past practice;
(i) increase or decrease prices charged to its customers, except for previously announced or contracted price changes, or claims, liabilities take any other action which might reasonably result in any material increase in the loss of customers through non-renewal or obligations reflected termination of service contracts or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Companyother causes;
(j) except in accordance with Section 5.17 and 5.18, enter into any transaction with an Affiliate, whether or not in the Company shall not adopt a plan ordinary course of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);business; or
(k) the Company shall not takeagree, in writing or agree otherwise, to commit to take, any action that would, take or is reasonably likely to, result in authorize any of the conditions to the Merger set forth in Article VII not being satisfied, foregoing actions or any action which would make many any representation or warranty of the Company contained herein inaccurate in any respect at, Article III untrue or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingincorrect.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) between the date of this Agreement and the Effective Time, except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 set forth in Section 5.01 of the Company Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business businesses of the Company and its Subsidiaries shall be conducted only in the ordinary course of business and usual course and, to the extent consistent therewith, the Company shall use its reasonable best reasonable efforts to preserve its substantially intact the business organization of the Company and its Subsidiaries and to preserve substantially intact the current relationships of the Company and maintain its existing relations Subsidiaries with customersany persons with which the Company or any such Subsidiary has material business relations. Except as expressly contemplated by any other provision of this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule, suppliersneither the Company nor any of its Subsidiaries shall, employeesbetween the date of this Agreement and the Effective Time, creditors do any of the following without the prior written consent of Parent, which consent shall not be unreasonably withheld or delayed:
(a) amend or otherwise change its Amended and business partnersRestated Certificate of Incorporation, By-Laws or other similar organizational documents, or authorize or adopt (or publicly propose) a plan of complete or partial liquidation or dissolution of the Company;
(b) the Company will not, directly or indirectly, (i) issue, grant, sell, dispose of, deliver, encumber (other than Permitted Liens), or authorize any such issuance, grant, sale, disposition, delivery or encumbrance of, any shares of any class of capital stock of the Company or any of its Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest, of the Company or any of its Subsidiaries (except upon exercise for the issuance of Shares issuable pursuant to employee stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans restricted stock units, in each case, outstanding on the date hereof of this Agreement and in accordance with their present terms) or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, (ii) sell, transfer dispose of, transfer, abandon, lease, license or pledge otherwise encumber (other than Permitted Liens), or agree to sellauthorize any such sale, transfer disposition, transfer, abandonment, lease, license or pledge encumbrance of, any treasury stock properties, rights or assets of the Company beneficially owned by itor any of its Subsidiaries that are material to the Company and its Subsidiaries, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Sharestaken as a whole;
(c) the Company shall not: (i) declare, set aside aside, make or pay any dividend or other distribution distribution, payable in cash, stock stock, property or property otherwise, with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) , except for dividends or other distributions to the Company shall not: (i) grant or any increase in the compensation payable other direct or to become payable by indirect wholly owned Subsidiary of the Company to by any of its executive officers; (ii)(A) adopt any new, direct or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee indirect wholly owned Subsidiary of the Company;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any capital stock of the Company or any of its Subsidiaries (or any rights, warrants or options to acquire any such capital stock);
(e) (i) acquire (including by purchase, merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership or other business organization (or any division or business thereof); (ii) except among the Company shall not modifyand any of its wholly owned Subsidiaries and except for borrowings under existing credit facilities in the ordinary course of business, incur any indebtedness for borrowed money or issue any debt securities or calls, options, warrants or other rights to acquire debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person; (iii) except among the Company and any of its wholly owned Subsidiaries and as required in accordance with its terms, redeem, purchase, prepay, defease or cancel any indebtedness for borrowed money; (iv) except with respect to the Company or any of its wholly owned Subsidiaries, make any loans, advances, investments or capital contributions in any material amount in or to any person; (v) enter into, terminate, amend or terminate fail to renew any of contract material to the Company and its material contracts Subsidiaries, taken as a whole, or waive, release or assign any material rights or claimsclaims thereunder; or (vi) authorize, or make any commitment with respect to, capital expenditures that, individually or taken together, exceed by 10% the aggregate amount of the annual capital expenditures budget of the Company and its Subsidiaries, taken as a whole (a copy of which has been previously provided to Parent);
(f) (i) increase the compensation payable or to become payable or the benefits provided to its current or former directors, officers or employees, except with respect to officers or employees below the level of facility executive officer or with respect to other officers or employees whose annual compensation after such increase does not exceed $100,000, in each case in the ordinary course of business and consistent with past practice;
; (fii) grant any retention, severance, change in control, or termination pay to, or enter into any employment, bonus, change of control or severance agreement with, any current or former director, officer or other employee of the Company shall or of any Subsidiary of the Company; (iii) establish, adopt, enter into, terminate or amend any Plan, or establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan or collective bargaining agreement if it were in existence as of the date of this Agreement, for the benefit of any director, officer or employee except as required by Law; (iv) loan or advance any money or other property to any current or former director, officer or employee of the Company or any of its Subsidiaries; or (v) take any action to accelerate the time of vesting or payment of (or fund or otherwise secure) any compensation or benefits under any Plan, except, in the case of the matters described in clauses (ii) and (iii), the entering into, or making available to, newly hired employees and promoted employees, in each case, who are not permit any insurance policy naming it as a beneficiary directors or a loss payable payee to executive officers (and who will not be cancelled directors or terminated without notice to executive officers after such promotion), plans, agreements, benefits and compensation arrangements (including grants under the Purchaser, except Company Stock Plan) in the ordinary course of business and consistent with past practice;
(g) other than in the Company shall not ordinary course of business or except as required by applicable Law, make, change or rescind any material Tax election, file any amended material Tax Return, enter into any closing agreement relating to Taxes, waive or extend the statute of limitations in respect of material Taxes (i) incur or assume any long-term debt, or, except other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business, incur ) or assume settle or compromise any short-term indebtedness material income Tax liability or other Tax liability in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations excess of any other Person, except $1.0 million in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)aggregate;
(h) fail to maintain in full force and effect the existing insurance policies (or alternative policies with comparable terms and conditions) covering the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Electionand its Subsidiaries and its and their respective properties, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessmentassets and businesses;
(i) the Company shall not pay, discharge or satisfy settle (x) any claimsAction other than payments, discharges and settlements involving not more than $1.0 million in the aggregate (net of insurance proceeds, including any such proceeds from PSI Surety, Inc.) and that do not require any actions or impose any material restrictions on the business or operations of the Company and its Subsidiaries, taken as a whole, or (y) any Action involving any holder or group of holders of Shares;
(j) except as required by GAAP or Law, make any change in financial accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction results of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) operations of the Company;
(jk) (i) effect or permit a “plant closing” or “mass layoff” as those terms are defined in the Company shall not adopt a plan Workers Adjustment and Retraining Notification Act without complying with the notice requirements and all other provisions of complete such act or partial liquidation(ii) except as required by Law, dissolution, merger, consolidation, restructuring, recapitalization enter into or other reorganization of the Company (modify or amend in any material respect or terminate any collective bargaining agreement with any labor union other than pursuant to customary negotiations in the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any ordinary course of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;business; or
(l) the Company shall not redeem the Rights announce an intention, enter into any formal or terminate, amend informal agreement or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of make a court of competent jurisdiction; and
(m) the Company shall not enter into an agreementcommitment, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Psychiatric Solutions Inc)
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees that, (i) during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, unless Parent shall otherwise agree in writing, the Company shall conduct its business and shall cause the businesses of its subsidiaries to be conducted only in, and the Company and its subsidiaries shall not take any action except in, the ordinary course of business and in a manner consistent with prudent industry practice; and the Company shall use all reasonable commercial efforts to preserve substantially intact the business organization of the Company and its subsidiaries, to keep available the services of the present officers, employees and consultants of the Company and its subsidiaries and to preserve the present relationships of the Company and its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except as expressly contemplated by this Agreement, neither the Option Company nor any of its subsidiaries shall, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Stockholders AgreementEffective Time, directly or indirectly do, or (ii) as disclosed on Schedule 5.2 propose to do, any of the Disclosure Schedule, or (iii) as agreed in writing by following without the Purchaser, after the date hereof, and prior to the time the directors written consent of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):Parent:
(a) amend or otherwise change the business Certificate of Incorporation or By-Laws of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use or any of its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnerssubsidiaries;
(b) the Company will not, directly or indirectly, (i) except upon exercise of stock options or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge or agree to sell, transfer or pledge any treasury stock of the Company beneficially owned by it, (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (ii) issue, sell, pledge, dispose of or encumber any additional shares ofencumber, or securities convertible into authorize the issuance, sale, pledge, disposition or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquireencumbrance of, any shares of capital stock of any class class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including, without limitation, any phantom interest) in the Company, other than any of its subsidiaries or affiliates (except for the issuance of shares of Company Common Stock reserved for issuance on the date hereof issuable (i) pursuant to Stock Options which were granted under the exercise of Options or Warrants or conversion of Voting Debt Company Stock Option Plan and are outstanding on the date hereof; , (ii) pursuant to options described in Section 1.6(c) of the Company Disclosure Schedule outstanding on the date hereof and (iii) transfer, lease, license, pursuant to the Warrants).
(c) sell, mortgage, pledge, dispose of, of or encumber any assets other than of the Company or any of its subsidiaries (except for (i) sales of assets in the ordinary and usual course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or incur worthless assets, and (iii) sales of immaterial assets not in excess of $50,000 in the aggregate);
(i) declare, set aside, make or modify pay any indebtedness dividend or other liabilitydistribution (whether in cash, other than stock or property or any combination thereof) in the ordinary and usual course respect of business and consistent with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock, except that a wholly owned subsidiary of the Company may declare and pay a dividend to its parent, (ii) split, combine or reclassify any of its capital stock or 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, accelerate the vesting of, purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary to purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, shares of Company Common Stock or any option, warrant or right, directly or indirectly, to acquire shares of Company Common Stock, or propose to do any of the foregoing;
(di) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof, except that the Company shall not: may (i1) grant acquire complementary businesses or finance the acquisition by its affiliated physician groups of hospital medical service contracts in an amount not to exceed $1,000,000 in any single case and $2,750,000 in the aggregate, (2) with the prior written consent of Parent (which consent will not be unreasonably withheld or delayed) acquire the businesses described on Section 4.1(e) of the Company Disclosure Schedule and (3) finance the acquisition by its affiliated physician groups of the hospital medical service contracts described in Section 4.1(e) of the Company Disclosure Schedule not to exceed in the aggregate the amount previously specified in writing by the Company to Parent; (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 obligations of any person or, except in the ordinary course of business consistent with past practice, make any loans or advances; (iii) enter into or amend any material contract or agreement, except that the Company may amend its existing $6,500,000 bank credit agreement to increase the amount of credit available thereunder to up to $25,000,000; (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $100,000 for the Company and its subsidiaries taken as a whole (except for purchases and leases of equipment not to exceed $1,000,000 in aggregate payments required for the development of new hyperbaric oxygen therapy and dialysis treatment facilities); or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(e);
(f) increase the compensation payable or to become payable by the Company to any its officers or employees (except for increases in compensation of its executive officers; (ii)(A) adopt any newemployees without employment agreements in amounts consistent with past practices), or (B) amend grant any severance or otherwise increasetermination pay to, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with orany director, except in accordance with the existing written policies of the Company, grant any severance officer or termination pay to any officer, director or other employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts subsidiaries, or waiveestablish, release adopt, enter into or assign amend any material rights collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or claimsother plan, except agreement, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees, except, in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it each case, as a beneficiary or a loss payable payee to may be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practicerequired by law;
(g) the Company shall not (i) incur take any action to change accounting policies or assume any long-term debt, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction procedures (including, but not limited towithout limitation, any borrowingprocedures with respect to revenue recognition, capital expenditure or purchase, sale or lease payments of assets or real estateaccounts payable and collection of accounts receivable);
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change tax election inconsistent with past practice or settle or compromise any material Tax election already madefederal, adopt any material Tax accounting methodstate, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim local or assessment foreign tax liability or consent agree to any material Tax claim or assessment or any waiver an extension of the a statute of limitations for any such material claim or assessmentlimitations;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such claims, business and consistent with past practice of liabilities reflected or obligations, reserved against in the financial statements contained in the Company SEC Reports filed prior to the date of this Agreement or incurred in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;; or
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit in writing or otherwise to take, any action that wouldof the actions described in Sections 4.1 (a) through (i) above, or is reasonably likely to, result in any action which would make any of the conditions to the Merger set forth in Article VII not being satisfied, representations or would make many representation or warranty warranties of the Company contained herein inaccurate in any respect at, this Agreement untrue or as of any time prior to, the Effective Time, incorrect or that would materially impair the ability of prevent the Company to consummate the Merger in accordance with the terms hereof from performing or materially delay such consummation;
(l) cause the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingperform its covenants hereunder.
Appears in 1 contract
Conduct of Business by the Company Pending the Merger. The Company covenants and agrees thatPrior to the Effective Time, (i) except unless Parent or Acquisition Subsidiary shall otherwise agree in writing or as expressly otherwise contemplated by this Agreement, the Option Agreement or the Stockholders Agreement, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after the date hereof, and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):Additional Agreements:
(a) the business The Business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partnerscourse;
(b) the The Company will not, directly or indirectly, shall not (i) except upon exercise of stock options directly or other rights to indirectly redeem, purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge otherwise acquire or agree to sellredeem, transfer purchase or pledge otherwise acquire any treasury stock of the Company beneficially owned by it, its Units; (ii) amend its Restated Certificate of Incorporation or Bylaws or similar organizational documents; Operating Agreement except to effectuate the transactions contemplated in this Agreement or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) Units or declare, set aside or pay any dividend or other distribution payable in cash, stock equity or property or make any distribution with respect to its capital stock; any such Units;
(iic) issue, sell, pledge, dispose of The Company shall not (i) issue or encumber agree to issue any additional shares of, or securities convertible into or exchangeable forUnits, or options, warrants, calls, commitments warrants or rights of any kind to acquire, acquire any shares of capital stock Units; (ii) acquire or dispose of any class fixed assets or acquire or dispose of the Company, any other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber any substantial assets other than in the ordinary and usual course of business and consistent with past practice, or incur or modify any indebtedness or other liability, other than in the ordinary and usual course of business and consistent with past practicebusiness; or (iv) redeem, purchase or otherwise acquire directly or indirectly any of its capital stock;
(d) the Company shall not: (i) grant any increase in the compensation payable or to become payable by the Company to any of its executive officers; (ii)(A) adopt any new, or (B) amend or otherwise increase, or accelerate the payment or vesting of the amounts payable or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) incur additional Indebtedness or any other liabilities or enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debt, or, except other transaction other than in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances or capital contributions to, or investments in, any other Person; or (iv) enter into any material contract, agreement, commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate);
(h) the Company shall not (i) change arrangement with respect to any of the accounting methods used by it unless required by GAAP; foregoing or (iiv) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required except as contemplated by GAAPthis Agreement, enter into any closing contract, agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;
(j) the Company shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in any of the conditions to the Merger set forth in Article VII not being satisfied, or would make many representation or warranty of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do dissolve, merge, consolidate or enter into any other material business combination;
(d) The Company shall use its commercially reasonable efforts to preserve intact the business organization of the Company, to keep available the service of its present officers and key employees, and to preserve the good will of those having business relationships with it;
(e) The Company will not, nor will it authorize any director or authorize or permit any officer or employee or any attorney, accountant or other representative retained by it to make, solicit, encourage any inquiries with respect to, or engage in any negotiations concerning, any Acquisition Proposal (as defined below for purposes of this paragraph). The Company will promptly advise Parent orally and in writing of any such inquiries or proposals (or requests for information) and the substance thereof. As used in this paragraph, "Acquisition Proposal" shall mean any proposal for a merger or other business combination involving the Company or for the acquisition of a substantial equity interest in it or any material assets of it other than as contemplated by this Agreement. The Company will immediately cease and cause to be terminated any existing activities, discussions or negotiations with any Person conducted heretofore with respect to any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoing.; and
Appears in 1 contract
Samples: Merger and Share Exchange Agreement (Asta Holdings, Corp.)
Conduct of Business by the Company Pending the Merger. The Except as set forth on Schedule 4.1, the Company covenants and agrees that, (i) between the date of this Agreement and the Effective Time, the business of the Company and its consolidated subsidiaries shall be conducted only in, and the Company and its consolidated subsidiaries shall not take any action except in, the ordinary course of business, consistent with past practice. The Company and its subsidiaries shall use their reasonable best efforts, subject to the covenants of this Article IV, to preserve intact their business organization, to keep available the services of their current officers, employees and consultants and to preserve their present relationships with customers, suppliers and other persons with which they have significant business relations. By way of amplification and not limitation, except as expressly contemplated by this Agreement, the Option Agreement or the Stockholders AgreementCompany and each of its consolidated subsidiaries shall not, or (ii) as disclosed on Schedule 5.2 of the Disclosure Schedule, or (iii) as agreed in writing by the Purchaser, after between the date hereof, of this Agreement and prior to the time the directors of the Purchaser have been elected to and shall constitute a majority of the Board of Directors pursuant to Section 1.3 (the "Appointment Date"):
(a) the business of the Company shall be conducted only in the ordinary and usual course and, to the extent consistent therewith, the Company shall use its best reasonable efforts to preserve its business organization intact and maintain its existing relations with customers, suppliers, employees, creditors and business partners;
(b) the Company will notEffective Time, directly or indirectly, (i) except upon exercise of stock options do or other rights to purchase shares of Company Common Stock pursuant to the Option Plans outstanding on the date hereof or upon exercise of outstanding Warrants or conversion of Voting Debt, issue, sell, transfer or pledge propose or agree to sell, transfer or pledge do any treasury stock of the Company beneficially owned by it, following without the prior written consent of Republic:
(iia) amend or otherwise change its Restated Certificate articles of Incorporation incorporation or Bylaws bylaws or similar equivalent organizational documents; or (iii) split, combine or reclassify the outstanding Shares;
(c) the Company shall not: (i) declare, set aside or pay any dividend or other distribution payable in cash, stock or property with respect to its capital stock; (iib) issue, sell, pledge, dispose of or encumber any additional shares of, encumber, or, authorize the issuance, sale, pledge, disposition, grant or securities convertible into or exchangeable forencumbrance of (i) any shares of its capital stock of any class, or any options, warrants, calls, commitments convertible securities or other rights of any kind to acquire, acquire any shares of such capital stock of any class of the Company, other than shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options or Warrants or conversion of Voting Debt outstanding on the date hereof; (iii) transfer, lease, license, sell, mortgage, pledge, dispose ofstock, or encumber any assets other than ownership interest, of it or (ii) any of its assets, tangible or intangible, except in the ordinary and usual course of business and consistent with past practice;
(c) declare, set aside, make or incur or modify pay any indebtedness dividend or other liabilitydistribution, other than payable in the ordinary and usual course of business and consistent cash, stock, property or otherwise, with past practice; or (iv) redeem, purchase or otherwise acquire directly or indirectly respect to any of its capital stock;
(d) the Company shall not: reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock;
(i) grant any increase in the compensation payable acquire (including, without limitation, for cash or to become payable shares of stock), by the Company to any of its executive officers; (ii)(A) adopt any newmerger, consolidation, or (Bacquisition of stock or assets) amend any interest in any corporation, partnership or otherwise increaseother business organization or division thereof or any assets, or accelerate the payment make any investment either by purchase of stock or vesting securities, contributions of the amounts payable capital or to become payable under, any existing bonus, incentive compensation, deferred compensation, severance, profit sharing, stock option, stock purchase, insurance, pension, retirement or other employee benefit plan, agreement or arrangement; or (iii) enter into any employment or severance agreement with or, except in accordance with the existing written policies of the Company, grant any severance or termination pay to any officer, director or employee of the Company;
(e) the Company shall not modify, amend or terminate any of its material contracts or waive, release or assign any material rights or claims, except in the ordinary course of business and consistent with past practice;
(f) the Company shall not permit any insurance policy naming it as a beneficiary or a loss payable payee to be cancelled or terminated without notice to the Purchaser, except in the ordinary course of business and consistent with past practice;
(g) the Company shall not (i) incur or assume any long-term debtproperty transfer, or, except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) assume, guarantee, endorse purchase any property or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations assets of any other Person, (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 obligations of any Person, or make any loans or advances other than in the ordinary course of business, or (iii) enter into any Contract other than in the ordinary course of business, consistent with past practice;
(f) increase the compensation payable or to become payable to its officers or employees other than the ordinary course of business consistent with past practice, or, except as presently bound to do, grant any severance or termination pay to, or enter into any employment or severance agreement with, any of its directors, officers or other employees, or establish, adopt, enter into or amend or take any action to accelerate any rights or benefits under any collective bargaining, bonus, profit sharing, trust, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees;
(g) take any action other than in the ordinary course of business and in a manner consistent with past practice; (iii) other than ordinary course expense advances, make any loans, advances practice with respect to accounting policies or capital contributions to, or investments in, any other Person; or (iv) enter into any material commitment or transaction (including, but not limited to, any borrowing, capital expenditure or purchase, sale or lease of assets or real estate)procedures;
(h) the Company shall not (i) change any of the accounting methods used by it unless required by GAAP; or (ii) other than related to a QEF Election, make any material Tax election, change any material Tax election already made, adopt any material Tax accounting method, change any material Tax accounting method unless required by GAAP, enter into any closing agreement, settle any material Tax claim or assessment or consent to any material Tax claim or assessment or any waiver of the statute of limitations for any such material claim or assessment;
(i) the Company shall not pay, discharge or satisfy any existing claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of any such claimsbusiness and consistent with past practice of due and payable liabilities reflected or reserved against in its financial statements, as appropriate, or liabilities or obligations, incurred after the date hereof in the ordinary course of business and consistent with past practice;
(i) materially increase or decrease prices charged to its customers, except for previously announced price changes, or claims, liabilities take any other action which might reasonably result in any material increase in the loss of customers through non-renewal or obligations reflected termination of service contracts or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of the Company;other causes; or
(j) the Company shall not adopt a plan of complete agree, in writing or partial liquidationotherwise, dissolution, merger, consolidation, restructuring, recapitalization to take or other reorganization of the Company (other than the Merger);
(k) the Company shall not take, or agree to commit to take, any action that would, or is reasonably likely to, result in authorize any of the conditions to the Merger set forth in Article VII not being satisfied, foregoing actions or any action which would make many any representation or warranty in Article III materially untrue or incorrect except in the ordinary course of the Company contained herein inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of the Company to consummate the Merger in accordance with the terms hereof or materially delay such consummation;
(l) the Company shall not redeem the Rights or terminate, amend or otherwise modify the Rights Agreement prior to the consummation of the Offer unless required to do so by order of a court of competent jurisdiction; and
(m) the Company shall not enter into an agreement, contract, commitment or arrangement to do any of the foregoing, or to authorize, recommend, propose or announce an intention to do any of the foregoingbusiness.
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