Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed): (a) amend or propose to amend its or any of its Subsidiaries' Charter Documents; (b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent); (c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes; (d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced; (e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice; (f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization; (g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries; (h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP; (i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums; (j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a); (k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law; (l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim; (m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate; (n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or (o) agree or commit to do any of the foregoing.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of (ix) the Effective Time termination of this Agreement and (iiy) the first date on which Closing, the Company agrees (unless the Company is required to take such action pursuant to this Agreement or Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the give its prior written consent of Parent (not to be unreasonably withheld, conditioned or delayedin writing), conduct to carry on its business in all material respects substantially in the usual, regular and ordinary course of business, substantially consistent with past practice (including practice, to pay its Liabilities and Taxes consistent with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately ’s past practices, to account pay or perform other obligations when due consistent with the Company’s past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith and for any planned store closures) which adequate reserves have been established), and, to the extent consistent therewithwith such business, the Company shall, and shall cause each of its Subsidiaries to, to use commercially reasonable best efforts to maintain and preserve substantially intact its and its Subsidiaries' present business organization, to keep available the services of its and its Subsidiaries' current present officers and employees, to key employees and preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees licensees, independent contractors and other Persons having material business relationships dealings with it or it, all with the express purpose and intent of preserving substantially unimpaired its Subsidiaries (it being agreed goodwill and understood that no action ongoing businesses at and after the Closing. Except as expressly contemplated by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheldParent, conditioned take or delayed):
(a) amend agree in writing or propose otherwise to amend its take, any action that would result in the occurrence of any of the changes described in Section 2.9 or any other action that would make any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify representations or make any like change warranties contained in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, untrue or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or incorrect when made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect. The Company shall not, without the prior written consent of Parent, take or agree in writing or otherwise to take, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a prevent the Company Employee Plan if it were in existence as of from performing or cause the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, perform its agreements and covenants hereunder or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, knowingly cause any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, ’s closing obligations in Section 6.1 or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit Section 6.3 not to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingsatisfied.
Appears in 1 contract
Conduct of Business of the Company. The Company shallExcept as contemplated by this Agreement, during the period from the date hereof to the Closing Date, each Seller will, and shall will cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects operations in the ordinary course Ordinary Course of business, consistent with past practice Business (including with respect to future purchase commitments for each the continued maintenance, servicing and refurbishment and retrieval of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closuresIRDs) and, to the extent consistent therewith, with no less diligence and effort than would be applied in the Company shallabsence of this Agreement, and shall cause each of its Subsidiaries to, use reasonable best efforts seek to maintain and preserve intact its current business organizations, and its Subsidiaries' business organization, seek to keep available the services service of its and its Subsidiaries' current officers and employees, key employees and seek to preserve its and its Subsidiaries' present relationships and goodwill with master sales agents, Full Service Providers, customers, suppliers, lessors, distributors, licensors, licensees suppliers and other Persons others having material business relationships dealings with it or its Subsidiaries (it being agreed to the end that goodwill and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 ongoing businesses shall be deemed to be a breach of unimpaired at the foregoing unless such action would constitute a breach of such other provision of this Agreement)Closing Date. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by provided in this Agreement or as set forth on Section 6.01 of the Company Disclosure LetterAgreement, the relevance of which disclosure prior to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-referenceClosing Date, or as required by applicable Law, the Company each Seller shall not, nor and shall it not permit any of its Subsidiaries to, without the prior written consent of Parent Buyer (which consent shall will not unreasonably be unreasonably withheld, conditioned withheld or delayed):
(a) amend its certificate or propose articles of incorporation or bylaws (or other similar governing instrument) in a manner that would reasonably be likely to amend its have an adverse effect on the Business, the Transferred Assets or any the rights of its Subsidiaries' Charter DocumentsBuyer hereunder;
(b) (i) adjust, split, combine, reclassify or make any like change except in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquireconnection with the Debt Tender Condition, or offer to repurchaseas otherwise provided herein or consistent herewith, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any reorganization of such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company Seller or any of its Subsidiaries, guarantee provided, that any debt securities such action taken in connection with the Debt Tender Condition, may only be taken by such Seller if such action would not interfere with, or be inconsistent with, the rights of another PersonBuyer under this Agreement and would not be reasonably likely to result in a Material Adverse Change;
(c) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiary of such Seller;
(d) except as contemplated by this Agreement, (i) enter into into, adopt or amend or terminate any “keep well” bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase, pension, retirement, deferred compensation, employment, severance or other Contract to maintain any financial statement condition employee benefit agreement, trust, plan, fund, award or other arrangement for the benefit or welfare of any director, officer or employee in any manner (other Person than any Stay Bonuses paid in accordance with the terms hereof or any other stay bonuses paid at such Seller's expense that such Seller reasonably determines in good faith to be necessary to retain the services of the recipients thereof through the Closing Date); provided, that such Seller may amend its severance plans as long as such amendment does not increase the Liability of Buyer or adversely affect Buyer's rights hereunder; or (ii) except for normal increases in the Ordinary Course of Business that, in the aggregate, do not result in a material increase in benefits or compensation expense to either Seller, increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan and arrangement as in effect as of the date hereof (including the granting of stock appreciation rights or performance units);
(e) except as set forth on Schedule 9.1(e), hire or retain any individual as an employee of or consultant to such Seller or any Subsidiary of such Seller, except in the Ordinary Course of Business;
(f) except as set forth on Schedule 9.1(f), modify in any material respect any Material Contract or enter into or renew any arrangement having material Contract which, if in effect on the economic effect date hereof, would have been required to be disclosed on Schedule 6.11(a);
(g) except as may be required as a result of a change in Law or in GAAP, change any of the foregoingaccounting principles or practices used by it;
(h) revalue any of its assets, including writing up or down the value of inventory or writing-off notes or accounts receivable other than in the Ordinary Course of Business;
(i) make or revoke any tax election or settle or compromise any tax liability material to such Seller, or change (or make a request to any taxing authority to change) any material aspect of its method of accounting for tax purposes, other thanthan such revocation, settlement, compromise or change that does not increase any Liability of Buyer or adversely affect Buyer or its rights hereunder;
(j) pay, discharge or satisfy any material claims or Liabilities, other than the payment, discharge or satisfaction of Liabilities reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of Primestar and its Subsidiaries;
(k) settle or compromise any pending or threatened material Action or Contractual claim or initiate or join any material Action or Contractual claim, including any Action or claim arising under the Loral Contract, other than any such Action or claim relating to any Excluded Assets or Excluded Liabilities; provided, that, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course such settlement or compromise does not increase any Liability of business consistent with past practice, Buyer or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification adversely affect Buyer or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiariesrights hereunder;
(hl) (i) incur or assume any long-term or short-term debt or issue any debt securities except for borrowings under existing lines of credit in the Ordinary Course of Business and in amounts not material to such Seller and its Subsidiaries, taken as a whole; (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 in amounts not material to such Seller and its Subsidiaries, taken as a whole; (iii) make any loans, advances or capital contributions to, or investments in, any other Person (other than customary loans or advances to employees in the Ordinary Course of Business and in amounts not material to the maker of such loan or advance); (iv) pledge or otherwise encumber shares of capital stock of such Seller or its Subsidiaries; or (v) mortgage or pledge any of its assets, tangible or intangible, or create or suffer to exist any Lien thereupon;
(m) except as contemplated by the High Power Agreement, (i) acquire, sell, lease or dispose of any assets outside the Ordinary Course of Business or any assets which in the aggregate are material to such Seller and its Subsidiaries, taken as a whole; (ii) enter into any new line commitment or transaction outside the Ordinary Course of Business; or (iii) grant any exclusive distribution rights;
(i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or make division thereof or agree to make any equity interest therein; (ii) authorize any new capital expenditure or expenditures which, individually, is in excess of $250,000 or that10,000 or, in the aggregate, are in excess of $500,0001 million, other than (A) as contemplated by the Company's capital expenditure budgetpurchase of 75,000 IRDs under the GI Contract pursuant to purchase orders in effect on the date hereof and purchases of Dishes, which has been provided or made available to ParentLNBs, or (B) Primefinder Remotes and other equipment in the ordinary course Ordinary Course of business consistent with past practice, (ii) except in Business at the ordinary course expense of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder Sellers; or (iii) dispose of, grant, obtain enter into or permit to lapse amend any material Company IPContract providing for the taking of any action that would be prohibited hereunder;
(io) dischargemodify or alter any of its programming content or the Subscriber acquisition and packaging offers currently being utilized or enter into any new programming Contracts, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition commercially reasonable response to promotional market activity of any material restriction on the business multichannel video programming distributor which is intended by Seller to retain existing Subscribers or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiumsto obtain new Subscribers;
(jp) enter into disclose to any Contract of a type referenced in clause (ii), (iii), (iv), (v) Person other than Buyer or (viii) of Section 4.13(a);
(k) make its representatives any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local Records or other Tax election, adopt or change information regarding any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practiceSubscribers; or
(oq) take, propose to take, or agree in writing or commit otherwise to do take, any of the foregoingactions described in Section 9.1(a) through Section 9.1(p) or any other action which would make any of the representations or warranties of such Seller contained in this Agreement untrue or incorrect.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of the valid termination of this Agreement in accordance with Article VII and the Closing, the Seller shall cause the Company (except (i) to the Effective Time and extent that the Buyer shall otherwise consent in writing, (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted contemplated by this AgreementAgreement (including, as set forth on without limitation, with respect to any assignment or transfer contemplated by Section 6.01 to the Company Disclosure Letter or 4.14), (iii) as required by applicable Law or with the prior written consent of Parent Order (not to be unreasonably withheldincluding, conditioned or delayed)without limitation, conduct any COVID-19 Measures) to, carry on its business in all material respects the usual and Ordinary Course of Business in substantially the ordinary course of businesssame manner as heretofore conducted pay its debts and Taxes when due, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries topay or perform other obligations when due, use commercially reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its present officers, Key Employees and Non-Key Employees and use its Subsidiaries' current officers commercially reasonable efforts consistent with past practice and employees, policies to preserve intact its present business organization and preserve its Subsidiaries' present material relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees licensees, and other Persons others having material business relationships dealings with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement)it. Without limiting the generality of the foregoing, between the date of this Agreement foregoing and the Effective Time, except (i) as otherwise expressly permitted contemplated by this Agreement (including, without limitation, with respect to any assignment or transfer contemplated by Section 4.14), (ii) consented to in writing by the Buyer, (iii) as required by applicable Law or Order (including, without limitation, any COVID-19 Measures) or (iv) as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawSchedule 4.7, the Company shall not, nor and the Seller shall it permit any of its Subsidiaries cause the Company not to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed)::
(a) amend (i) make any payments or propose enter into any commitment or transaction outside of the Ordinary Course of Business, (ii) waive or release any material right or claim, (iii) fail to amend its pay, or delay in paying, accounts payable when due, (iv) accelerate the payment of any accounts receivable, or (v) change or deviate from any accounting policies and procedures (except to the extent required by GAAP) or any of its Subsidiaries' Charter Documentscash management practices;
(b) issue, sell, grant, or deliver (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securitiescapital stock of the Company, (ii) repurchaseany securities convertible into, redeem or otherwise acquireexchange for, or offer rights warrants, or options to repurchase, redeem acquire any capital stock of the Company or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declareother rights, set aside Contracts, arrangements or pay any dividend or distribution commitments (whether in cash, stock, property contingent or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of obligating the Company to its parent)issue, deliver, convert, exchange or sell any capital stock of the Company;
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice[***]; or
(o) agree or commit to do any of the foregoing.{00194413.DOCX;12 }
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement until to the earlier Closing Date, and except as otherwise expressly provided in this Section 4.01 or Schedule 4.01 of the Disclosure Schedule, Principals will cause the Company to (i) the Effective Time conduct its business and operations according to its ordinary course of business consistent with past practice, (ii) the first date on which Parent shall have exercised rights under Section 1.03 use its reasonable best efforts to designate at least a majority of the Boardpreserve intact its business organization and its relationship with licensors, suppliers, distributors, employees, customers and others having business relationships with them, except as expressly permitted may otherwise be agreed by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shallPrincipals and Buyer, and shall cause each of (iii) use its Subsidiaries to, use reasonable best efforts to maintain the Major Customers Contracts in full force and preserve intact its effect in accordance with their terms up to the Closing Date. As used in this Article IV and its Subsidiaries' business organizationelsewhere in this Agreement, the term "reasonable best efforts" shall not require the party using such efforts to keep available the services of its and its Subsidiaries' current officers and employees, make any payment to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed party which it is not otherwise required to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement)pay. Without limiting the generality of the foregoing, between the date of this Agreement foregoing and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 provided in Schedule 4.01 of the Company Disclosure LetterSchedule, the relevance of which disclosure prior to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, Closing without the prior written consent of Parent (which consent shall Buyer, Principals will not be unreasonably withheld, conditioned or delayed):permit the Company to:
(a) amend change or propose to amend its Articles of Incorporation or any of its Subsidiaries' Charter DocumentsBy-laws (or similar governing documents);
(b) (i) adjustcreate, splitincur or assume any debt, combineliability or obligation, reclassify direct or indirect, whether accrued, absolute, contingent or otherwise, other than normal trade obligations incurred in the ordinary course of business consistent with past practice and borrowings by the Company in the ordinary course under its current lines of credit or (ii) pay any debt, liability or obligation of any kind other than current liabilities incurred in the ordinary course of business consistent with past practice and current maturities of existing long-term debt or (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, or make any like change loans or advances to any person, except in any the ordinary course of business consistent with past practice; provided, however, that without the prior written consent of Buyer, the Company Securities shall not enter into a new agreement to provide services or Company Subsidiary Securities, products to a reseller of such services or products or to a competitor of Buyer (ii) repurchase, redeem or otherwise acquire, or offer except in either case with respect to repurchase, redeem or otherwise acquire, any Company Securities (other than renewals of agreements with current customers in the Convertible Notes as contemplated by the terms thereofordinary course) or Company Subsidiary Securities, amend any Major Customer Contract in a material adverse manner to the Company;
(iiic) declare, set aside or pay any dividend or other distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect ofof the capital stock of the Company, or enter into redeem or otherwise acquire any Contract with respect to of the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary capital stock of the Company to its parent);
(c) issueor split, deliver, sell, pledge, dispose of, transfer, modify combine or encumber any otherwise similarly change the capital stock of the Company Securities or Company Subsidiary Securities, other than (i) authorize the creation or issuance of or issue or sell any shares of Company Common Stock upon the exercise of its capital stock or any Company Equity Award outstanding as of the date of this Agreement in accordance with its termssecurities or obligations convertible into or exchangeable for, (ii) the issuance of or giving any person any right to acquire from it, any shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreementits capital stock, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notesagree to take any such action;
(d) (i) except as required by applicable Law change in any manner the rate or required terms of compensation or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation bonus payable or that could to become payable by to any director, officer or employee or (ii) change in any manner the Company rate or terms of any of its Subsidiaries to directors insurance, pension, severance, or officersother employee benefit plan, payment or arrangement made to, for or with any employees;
(e) discharge or satisfy any lien other than increases in compensation made in the ordinary course of business and consistent in all material respects with past practice, or subject to any Lien any assets or properties, except for any Liens that would otherwise be permitted under Section 2.09 hereof;
(f) except as otherwise permitted in this Section 4.01, enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or commitment for any planborrowing, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances capital expenditure or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, financing in excess of $250,000 50,000 individually or in the aggregate;
(g) sell, except (A) pursuant lease, transfer or dispose of any of its properties or assets, waive or release any rights of material value, or cancel, compromise, release or assign any indebtedness owed to existing Contracts that have been disclosed it or made available to Parent and any claims held by it in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or each case other reimbursable expenses made than in the ordinary course of business consistent with past practice;
(fh) (i) transfer, license, sell, lease, sublease, subject to make any Lien (other than Permitted Liens) or otherwise dispose investment of any assets or properties (whether a capital nature either by way of merger, consolidation, sale purchase of stock or assetssecurities, contributions to capital, property transfers or otherwise, or otherwise), including by the capital stock or other equity interests in purchase of any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets material property or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person individual, firm, corporation or enter into any arrangement having the economic effect of any of the foregoingentity, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice;
(i) except as required by generally accepted accounting principles (A) utilize accounting principles different from those used in the preparation of the Financial Statements, modify(B) change in any manner its method of maintaining its books or accounts and records from such methods as in effect on the date of the Financial Statements, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iiiC) dispose ofaccelerate booking of revenues or the deferral of expenses, other than as shall be consistent with past practice and in the ordinary course of business;
(j) take any action to permit any insurance policy naming it as a beneficiary or a loss payable payee to be canceled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination or cancellation replacement policies providing substantially the same coverage and which are obtainable on substantially the same economic terms are in full force and effect; provided, however that if the Company shall receive notice of any such cancellation or termination, it shall so notify Buyer promptly upon receipt thereof and, if feasible upon the payment of a premium which is not materially 15 - 63 - greater than the premium payable under such terminated or canceled policy, obtain simultaneously with such termination or cancellation such replacement policies;
(k) enter into any collective bargaining agreement;
(l) settle or compromise any claim, suit or cause of action involving more than $10,000;
(m) license, transfer, grant, obtain waive, release, permit to lapse or otherwise fail to preserve any of the material Proprietary Rights, dispose of or permit to lapse any material Company IP;
(i) dischargelicense, settlepermit or other form of authorization, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition dispose of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estatecustomer list;
(n) enter into terminate, materially amend or fail to perform any Store Leases other than in the ordinary course of business consistent in all its material respects with past practiceobligations under any Material Contract; or
(o) agree or commit enter into an agreement to do any of the foregoingthings described in clauses (a) through (n) above.
Appears in 1 contract
Samples: Stock Acquisition Agreement (Data Transmission Network Corp)
Conduct of Business of the Company. The Company shall, and shall cause each Subject to the last sentence of its Subsidiaries tothis SECTION 4.1, during the period from the date of this Agreement and continuing until the earlier of (i) the termination of this Agreement or the Effective Time and (ii) Time, the first date on which Company agrees to conduct its business, except to the extent that Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Boardotherwise consent in writing, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written which consent of Parent (will not to be unreasonably withheld, conditioned or delayedin the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay the debts and Taxes of the Company when due (subject to SECTION 4.1(e) below), conduct its business in all material respects in the ordinary course of businessto pay or perform other obligations when due, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewithwith such business, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' the present business organizationorganizations of the Company, to use commercially reasonable efforts to keep available the services of its and its Subsidiaries' current the present officers and employees, to key employees of the Company and preserve its and its Subsidiaries' present the relationships and goodwill of the Company with customers, suppliers, lessors, distributors, licensors, licensees licensees, and other Persons others having material business relationships dealings with it or its Subsidiaries (it being agreed them, all with the goal of preserving unimpaired the goodwill and understood that no action by ongoing businesses of the Company at the Effective Time. The Company shall use commercially reasonable efforts to promptly notify Parent of any event or its Subsidiaries with respect to matters specifically addressed by any other provision occurrence or emergency not in the ordinary course of this Section 6.01 shall be deemed to be a breach business of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting Company and any material event involving the generality of Company that arises during the foregoing, between period from the date of this Agreement and continuing until the earlier of the termination date of this Agreement or the Effective Time; provided, however, that no failure of the Company to notify Parent of any such event or occurrence or emergency shall constitute a breach of the covenant contained in this sentence unless such event, occurrence or emergency, individually or in the aggregate, has caused or could reasonably be expected to cause a Company Material Adverse Effect or to cause any of the conditions to Parent's obligations to consummate the Merger not to be satisfied. In addition to the foregoing, except as otherwise expressly permitted contemplated by this Agreement or and except as expressly set forth on Section 6.01 in SECTION 4.1 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawSchedule, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (Parent, which consent shall will not be unreasonably withheld, conditioned or delayed):from and after the date of this Agreement:
(a) amend cause or propose permit any amendments to amend its or any of its Subsidiaries' the Charter Documents;
(b) make any expenditures or enter into any commitment or transaction exceeding $100,000 individually or $250,000 in the aggregate or any commitment or transaction of the type described in SECTION 2.10 hereof other than in the ordinary course of business;
(ic) adjustother than repayment of indebtedness for borrowed money and other than payments in connection with the Parent/Company Litigation (including any related litigation with insurance carriers with respect to disputes as to coverage), splitpay, combinedischarge, reclassify waive or satisfy, any indebtedness or any third party expense in an amount in excess of $50,000 in any one case, or $100,000 in the aggregate, or any other claim, liability, right or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than with respect to such other claim, liability right or obligation, the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the Current Balance Sheet;
(d) adopt or change accounting methods or practices (including any change in depreciation or amortization policies) other than as required by GAAP;
(e) make or change any material Tax election, adopt or change any material Tax accounting method, enter into any closing agreement, settle or compromise any material Tax claim or assessment, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment or file any amended Return unless a copy of such Return has been delivered to Parent for review a reasonable time prior to filing and Parent has approved such Return;
(f) materially revalue any of its assets (whether tangible or intangible), including without limitation writing down the value of inventory or writing off notes or accounts receivable, other than in the ordinary course of business and consistent with past practice;
(g) declare, set aside, or pay any dividends on or make any like change other distributions (whether in cash, stock or property) in respect of any Company Securities Capital Stock, or split, combine or reclassify any Company Subsidiary SecuritiesCapital Stock or issue or authorize the issuance of any other securities in respect of, (ii) in lieu of or in substitution for shares of Company Capital Stock, or repurchase, redeem or otherwise acquire, directly or offer to repurchase, redeem or otherwise acquireindirectly, any shares of Company Securities Capital Stock (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside Options or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parentrights exercisable therefor);
(ch) issueincrease the salary or other compensation payable or to become payable to any officer, deliverdirector, sellEmployee or advisor, pledgeor make any declaration, dispose ofpayment or commitment or obligation of any kind for the payment (whether in cash or equity) of a severance payment, transfertermination payment, modify bonus or encumber other additional salary or compensation to any Company Securities or Company Subsidiary Securitiessuch person, other than except payments made pursuant to written Contracts outstanding on the date hereof and disclosed in the Disclosure Schedule and except (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation changes made in the ordinary course of business in connection with annual or other periodic reviews of employees below the level of Vice President and (ii) finalization and implementation of the Company's 2007 sales commission structure; provided, in that in the cases of clauses (i) and (ii) above, the aggregate increase in actual and/or forecasted compensation, as the case may be, will not exceed five percent (5%) of the levels of such compensation as of December 31, 2006.
(i) sell, lease, license or otherwise dispose of or grant any security interest in any of its properties or assets (whether tangible or intangible which properties or assets are material to the Company, individually or in the aggregate), including without limitation the sale of any accounts receivable of the Company, except in the ordinary course of business and consistent with past practices;
(j) make any loan to any person (other than travel advances to employees in all material respects the ordinary course of business consistent with past practice) or purchase debt securities of any person or amend the terms of any outstanding loan agreement;
(k) incur any indebtedness for borrowed money, guarantee any indebtedness of any person, issue or sell any debt securities, or guarantee any debt securities of any person;
(l) waive or release any material right or claim of the Company, including any write-off or other compromise of any account receivable of the Company, other than in the ordinary course of business consistent with past practices;
(m) other than any action taken in connection with the Parent/Company Litigation, commence or settle any lawsuit (other than claims solely for money damages), threat of any lawsuit or proceeding or material investigation against the Company other than by the payment of money;
(n) issue, grant, deliver or sell or authorize or propose the issuance, grant, delivery or sale of, or purchase or propose the purchase of, any Company Capital Stock or any securities convertible into, exercisable or exchangeable for, or subscriptions, rights, or Company Options to acquire, or other Contracts or commitments of any character obligating it to issue or purchase any such shares or other convertible securities, except for the issuance of Company Capital Stock pursuant to the exercise of outstanding Company Options;
(o) sell, lease, license or transfer to any person any rights to any Company Intellectual Property or enter into any new Contract or amend in any material respect, modify any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement Contract with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution respect to any Company Employee PlanIntellectual Property with any person or with respect to any Intellectual Property of any person, (ii) purchase or license any Intellectual Property or enter into any Contract or modify any existing Contract with respect to the Intellectual Property of any person or (iii) enter into any Contract or modify any existing Contract with respect to the development of any Intellectual Property with a third party, or (iv) change pricing or royalties set or charged by the Company to its customers or licensees, or the pricing or royalties set or charged by persons who have licensed Intellectual Property to the Company, in each case, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (Ax) in the ordinary course of business consistent with past practice or (y) in direct competition with Parent for a specific customer or project;
(p) enter into or amend any Contract pursuant to which any other party is granted exclusive marketing, distribution, development, manufacturing or similar rights of any type or scope with respect to employees with an annual base salary not to exceed $150,000, any products or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that technology of the employee replacedCompany;
(er) acquireamend, by merger, consolidation, acquisition of stock terminate or assetsotherwise modify (or agree to do so), or otherwiseknowingly violate the terms of, any of the Material Contracts;
(s) acquire or agree to acquire by merging or consolidating with, or invest inby purchasing any assets or equity securities of, or by any other manner, any business or Person any corporation, partnership, association or other business organization or division thereof thereof, or make otherwise acquire or agree to acquire any loansassets that are material, advances individually or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, to the business of the Company except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and for purchases of assets in the ordinary course of business consistent with past practice, (Bwithin the limits set forth in SECTION 4.1(b) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practiceabove;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (iit) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur amend any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another PersonPlan, enter into any “keep well” employment Contract, pay or agree to pay any bonus or special remuneration to any director or Employee, or increase or modify the salaries, wage rates, or other Contract compensation (including, without limitation, any equity-based compensation) of its Employees except payments made pursuant to maintain written agreements outstanding on the date hereof and disclosed in SECTION 4.1(t) of the Disclosure Schedule and except as permitted by Section 4.1(g);
(u) enter into any financial statement condition strategic alliance, affiliate agreement or joint marketing arrangement or agreement other than as permitted by the last sentence of this SECTION 4.1;
(v) promote, demote or terminate any Employees, or encourage any Employees to resign from the Company or hire or offer to hire any Employees, other Person than Employees to (A) fill the open positions described on SECTION 4.1(v) of the Disclosure Schedule and (B) replace (1) any existing Employees of the Company critical to the continuing operations of the Company (as reasonably determined by the Company) who leave the Company's employ after the date of this Agreement or (2) any Employees hired pursuant to clause (A) of this sentence who leave the Company's employ after the date of this Agreement;
(w) alter, or enter into any arrangement having commitment to alter, its interest in any corporation, association, joint venture, partnership or business entity in which the economic effect of Company directly or indirectly holds any interest;
(x) cancel, amend or renew any material insurance policy; or
(y) take, or agree in writing or otherwise to take, any of the foregoing, other than, actions described in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practiceSECTIONS 4.1(a) through 4.1(x) hereof, or take any other action (other than the entry into this Agreement and the other Company Transaction Documents) that would, or would reasonably be expected to (i) prevent the Company from performing in all material respects, or cause the Company not to perform in all material respects, its covenants hereunder or (ii) cause or result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company conditions to Parent's obligations to consummate the Merger not to be satisfied. Notwithstanding the foregoing or any other provision to the contrary, no provision of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree this Agreement is intended to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by require the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in and the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or shall not pending before a Governmental Entitybe required, (i) to take any action (including making any disclosure, notification, or other communication to Parent) that the Company's Board of Directors determines in good faith, after consultation with outside the ordinary course legal counsel, could constitute or result in a violation of business consistent with past practice applicable antitrust, competition, or similar Laws; or (ii) relating to refrain from entering into, amending, or arising from any securities class action claims or related derivative claimsterminating strategic alliance, in each case except joint marketing, distribution, and/or revenue sharing agreements with mobile phone carriers/operators, mobile device original equipment manufacturers, advertising partners, search content providers, directory assistance providers, mobile middleware and voice solution providers, and (with respect to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction proposed "VSearch" product) business development partners so long as none of such claim would not result in the imposition of any arrangements includes exclusivity, "most favored nation" or other material restriction restrictions on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingbusiness.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the BoardClosing, except as expressly permitted contemplated by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter Agreement or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed)Royal Gold, conduct its business in all material respects in the ordinary course of business, business consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact the Contributed Assets (including maintaining the Tetlin Lease and all claims; it being understood that Company or its Affiliate shall timely pay any amounts due and owing under the Tetlin Lease and in order to maintain the claims) and preserve intact its and its Subsidiaries' ’ business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Timeearlier of the termination of this Agreement and the Closing, except as otherwise expressly permitted contemplated by this Agreement or as set forth on Agreement, including pursuant to Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law4.04, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):Royal Gold:
(a) amend Enter into, create, incur or propose assume (i) any borrowings under capital leases relating to amend its the Contributed Assets or (ii) any of its Subsidiaries' Charter Documentsobligations which would have a Company Material Adverse Effect;
(b) (i) adjustSell, splittransfer, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquirelease, or offer to repurchase, redeem or otherwise acquire, permit the incurrence of any Company Securities Lien (other than any Permitted Lien) on, any of the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary SecuritiesContributed Assets or, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent)Contributed Assets;
(c) issueEnter into any agreements or commitments relating to the Contributed Assets with another Person, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) except on commercially reasonable terms in the issuance ordinary course of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notesbusiness;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend Violate in any material respect, respect any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of Law applicable the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replacedContributed Assets;
(e) acquireViolate in any material respect any Contract or Governmental Consent applicable to the Contributed Assets;
(f) Terminate or amend the Tetlin Lease;
(g) Commence a Legal Action which would affect in any adverse manner the Contributed Assets;
(h) Purchase, by merger, consolidation, acquisition of stock or assetslease, or otherwiseotherwise acquire any assets relating to the Contributed Assets, except for supplies, materials, services and equipment purchased, leased, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than acquired by the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transferEnter into any royalty, licensestreaming, sellfinancing, lease, sublease, subject to any Lien (other than Permitted Liens) joint venture or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation partnership agreement relating to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiumsContributed Assets;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with With respect to settlement of a pending Tax claim for no more than 110% of the amountContributed Assets, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business, (i) make any changes in capital expenditures or deferrals of capital expenditures; or (ii) change any of its business consistent policies;
(k) Amend the terms of its certificate of incorporation or bylaws in all any manner that would be reasonably likely to materially impede or delay the consummation of the Transactions;
(l) With respect to the Contributed Assets, make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any amendment to a Tax return, enter into any closing agreement with a Governmental Entity relating to Taxes, settle any claim or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of material respects with past practiceTaxes if any of the foregoing could reasonably be expected to adversely and materially impact the Company or Royal Gold;
(m) Intentionally take any other action or fail to exercise commercially reasonable efforts to take any action that would cause a Company Material Adverse Effect; or
(on) agree Enter into any Contract or commit agree, in writing or otherwise, to do take any of the foregoingactions described in Section 4.01(a) through Section 4.01(m) above.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the BoardTime, except as expressly contemplated or permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter Agreement or as required by applicable Law or with the prior written consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed), conduct its business business, in all material respects respects, in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to maintain and preserve substantially intact its and its Subsidiaries' ’ business organization, use its reasonable best efforts to keep available the services of its and its Subsidiaries' ’ current officers and employees, key employees and use its reasonable best efforts to preserve its and its Subsidiaries' ’ present relationships and goodwill with material customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood it; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 5.01 shall be deemed to be a breach of the foregoing this sentence unless such action would constitute a breach of such other provision of this Agreement)specific provision. Without limiting the generality of the foregoing, between from the date of this Agreement and until the Effective Time, except as otherwise expressly contemplated or permitted by this Agreement or as set forth on Section 6.01 5.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, Letter or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend the articles of association or propose to amend its memorandum of association (or other comparable organizational documents) of the Company or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, combine or reclassify or make any like change in any Company Securities Common Shares or Company Subsidiary SecuritiesEquity Interests of the Company, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (Common Shares or Equity Interests of the Company, except pursuant to the Company Share Plans or other than documents set forth on the Convertible Notes as contemplated by the terms thereof) Company Disclosure Letter, or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stockshares, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities shares of its share capital or Company Subsidiary Securities Equity Interests (other than dividends from a direct or indirect among the Company and its wholly owned Subsidiary of Subsidiaries or among the Company to its parentCompany’s wholly owned Subsidiaries);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify of or encumber any Company Securities Common Shares or Equity Interests of the Company Subsidiary Securitiesor any of its Subsidiaries, other than (i) the issuance of shares of Company Common Stock Shares upon the exercise and/or vesting of any Company Equity Award Table of Contents outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares Company Equity Awards pursuant to any written commitment to issue Company Equity Awards disclosed and described on Section 5.01(c) of the Company Disclosure Letter and the issuance of Company Common Stock in respect Shares upon the exercise or vesting of other equity compensation awards outstanding under any such Company Stock Plans as of the date of this Agreement in accordance with their termsEquity Awards, (iii) the issuance of shares of the True-Up Shares, if any, in accordance with Section 2.06(b) or (iv) transactions solely among the Company Common Stock upon exercise of and its wholly-owned Subsidiaries or among the Company’s wholly-owned Subsidiaries;
(d) except as required by applicable Law or by any Warrant that is outstanding Company Employee Plan, Foreign Company Employee Plan or Contract in effect as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors directors, officers or officersemployees, other than increases in compensation base salary made in the ordinary course of business consistent in all material respects with past practicebusiness, or (ii) enter into any new or amend in any material respect, respect any existing employment or consulting, bonusemployment, severance, retirement, retention, retention or change in control agreement other than entering into or similar amending employment agreements in the ordinary course of business with non-officer employees whose annual compensation opportunity is not (either before or following the execution of such employment agreement with any or amendment) in excess of its past or present officers$250,000, directors or consultants or (iii) establish, adopt, enter into, amend, terminate terminate, or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Foreign Company Employee Plan if it were in existence as of the date of this AgreementPlans, or make any contribution to any Company Employee Plan or Foreign Company Employee Plan, other than amendments and contributions required by Law (iv) take any action to fund the payment of compensation or the terms of such benefits under any Company Employee Plans as in effect on the date hereofPlan or otherwise, or (iiv) hire implement or announce any new employees, except (A) in “mass layoff” or “plant closing” within the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that meaning of the employee replacedWARN Act (or similar foreign Laws);
(e) acquire, by merger, consolidation, acquisition of stock shares or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than such transactions among the Company and its Subsidiaries or one or more of its among the Company’s Subsidiaries), in any transaction or series of transactions, ) in excess of $250,000 1,000,000 in the aggregateaggregate and other than acquisitions of inventory, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent equipment, goods and services in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) except for transactions exclusively among the Company and its Subsidiaries or among the Company’s Subsidiaries, (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) lease or otherwise dispose of any assets or properties outside of the ordinary course of business (whether by way of merger, consolidation, sale of stock shares or assets, or otherwise), including the capital stock or other equity interests Equity Interests in any Subsidiary of the Company, any provided that the foregoing shall not prohibit the Company and its Subsidiaries from (A) transferring, licensing, selling, leasing or disposing of obsolete equipment or assets being replaced, in each case in the ordinary course of business, (B) the lease and subleases of Owned Real Estate, any Lease or any Estate and Leased Real Estate, except (A) dispositions of obsoletein each case, surplus or worn out assets or assets that are no longer useful in the conduct ordinary course of the business of the Companybusiness, (B) transfers among in each case, which are not material to the Company and or its Subsidiaries, or (C) pursuant to existing Contracts or otherwise sales of inventory in the ordinary course of business consistent with past practice or (which D) sales or other dispositions in the ordinary course of business pursuant to existing Contracts for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, purchase of supplies and inventory)goods or services, or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationreorganization of the Company or any of its Subsidiaries (other than the Merger);
(g) repurchaseincur, prepay offer, place, arrange, syndicate, assume or incur otherwise become liable for any indebtedness (directly, contingently or otherwise) for borrowed money or guarantee any Table of Contents such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, Subsidiaries or guarantee any debt securities of another Person, enter into any “keep well” or incur, assume or other Contract become liable for any obligations (directly, contingently or otherwise) under interest rate, currency or commodity derivatives or hedging transactions (valued at the termination value thereof) or guarantee any such obligation of another Person, in excess of $2,500,000 in the aggregate, other than (i) indebtedness incurred under the Credit Agreement or incurred to maintain replace, renew, extend, refinance or refund any financial statement condition such existing indebtedness in an amount not to exceed the amount of indebtedness available under the Credit Agreement, (ii) indebtedness incurred in connection with the financing of ordinary course trade payables, (iii) any other Person indebtedness among the Company and its Subsidiaries or enter into any arrangement having among the economic effect Company’s Subsidiaries or (iv) guarantees by the Company of any indebtedness of Subsidiaries of the foregoingCompany, which indebtedness is incurred in compliance with this Section 5.01(g);
(i) amend or modify in any material respect, or consent to the termination of (other than at its stated expiration date), or waive any material provisions of, any Company Material Contract, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility than in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (iii) enter into any new line Contract with a term longer than twelve (12) months which cannot be terminated without penalty upon notice of business sixty (60) days or make less, that would have been a Company Material Contract if it were entered into on or agree prior to make any new capital expenditure in excess the date of $250,000 or that, in the aggregate, are in excess of $500,000this Agreement, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate for any Company Material Contract that would have been required to be disclosed pursuant to Section 3.14(a)(ii) or waive, release or assign any material rights or claims thereunder or Section 3.14(a)(iii) (iii) dispose of, grant, obtain or permit to lapse any material Company IPunless such restriction is customary for such Contracts));
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change (i) required by a change in GAAP or applicable Law, (ii) required by a Governmental Entity or the Financial Accounting Standards Board or any similar organization or (iii) disclosed in the Company SEC Documents;
(lj) make, revoke change or amend rescind any federal Tax election or material state, local or other Tax election, adopt or change any material Tax accounting period or method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure LetterTax accounting, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise file any material state, local or other amended Tax liability or refundReturn, enter into any material agreement closing agreement, settle any material Tax claim or assessment, surrender any right to claim a material Tax refund, offset or other reduction in liability, consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to federalthe Company or its Subsidiaries, stateor effect any material repatriation transaction not requested by Parent;
(k) except as expressly permitted by Section 5.03, local take any action to exempt any Person from, or other Taxes, file make any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices acquisition of securities of the CompanyCompany by any Person not subject to, except any state takeover statute or similar statute or regulation that no consent shall be required applies to Company with respect to settlement a Takeover Proposal or otherwise, except for Parent, Merger Sub or any of a pending Tax claim for no more than 110% of their respective Subsidiaries or Affiliates, or the amount, as of the date of transactions contemplated by this Agreement, of the FIN 48 reserves applicable to that claim;
(ml) acquire abandon, encumber, convey title (in whole or materially alter any in part), transfer, exclusively license, sell, lease or otherwise dispose of material Company-Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases IP, other than in the ordinary course of business; Table of Contents
(m) make or commit to make any capital expenditures in excess of $2,000,000, except for the expenditures contemplated by the capital budgets set forth in Section 5.01 of the Company Disclosure Letter or for expenditures required by applicable Law or in response to actual or threatened casualty loss or property damage;
(n) other than shareholder Legal Action, which is addressed in Section 5.17, settle or compromise any Legal Action or threatened Legal Action by or before a Governmental Entity or arbitrator if such settlement or compromise (i) with respect to the payment of monetary damages, involves the payment by the Company or any of its Subsidiaries of monetary damages (net of insurance proceeds) in excess of $3,000,000 individually or $6,000,000 in the aggregate or (ii) with respect to any non-monetary terms and conditions therein, imposes or requires actions that would or would reasonably be expected to be material to the business consistent in all material respects with past practiceof the Company and its Subsidiaries, taken as a whole; or
(o) agree agree, authorize or commit make any commitment, in writing or otherwise, to do any of the foregoing.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement Date and continuing until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date termination of this Agreement and the Effective Time, the Company will (except to the extent that Parent shall otherwise consent in writing) carry on its business in the usual and ordinary course in substantially the same manner as otherwise heretofore conducted, pay its debts and Taxes when due, pay or perform other obligations when due, and use all commercially reasonable efforts consistent with past practice and policies to preserve intact its present business organization, keep available the services of its present officers and Key Employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, all with the goal of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. Except as expressly permitted contemplated by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawAgreement, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned delayed or delayedconditioned):
(a) amend issue, grant, deliver or sell, or authorize or propose the issuance, grant, delivery or sale of, or purchase or propose the purchase of, any Company Capital Stock or Company Stock Rights, except for the issuance of Company Common Stock upon exercise of presently outstanding Company Stock Rights; provided, that (i) the Company timely pays in cash all Taxes required to amend its be withheld and paid in connection with such exercise or conversion, (ii) the amount of such Taxes is contributed to the Company in cash by the Person exercising or converting such Company Stock Right, (iii) for purpose of determining the amount of such Taxes, the fair market value of the Company Common Stock received pursuant to such exercise or conversion is equal to the maximum aggregate consideration payable with respect to such Company Common Stock pursuant to this Agreement, including for this purpose any consideration to be deposited with the Escrow Agent as part of its Subsidiaries' Charter Documentsthe Escrow Amount, and (iv) the Company promptly notifies Parent of such exercise or conversion; and, provided further that the Company may issue, grant, deliver or sell, or authorize or propose the issuance, grant, delivery or sale of, Company Capital Stock or Company Stock Rights at fair market value to Employees, consultants and advisors of the Company in an amount not to exceed 25,000 shares of Company Common Stock (on an as-converted basis) to any such person or entity, up to an aggregate of 100,000 shares of Company Common Stock (on an as-converted basis) for all such issuances, grants and sales;
(b) reprice any Company Stock Rights or accelerate the vesting of any Company Stock Right or restricted stock, except as otherwise contemplated by Section 4.11(f) with respect to the vesting acceleration of Accelerating Unvested Company Options;
(ic) adjustsell, splitlease, combinelicense, reclassify pledge, encumber, dispose or transfer to any person or entity any Company assets or properties or subject any such assets or properties to any Liens, except customer license agreements and sales to resellers and distributors entered into in the usual and ordinary course of the Company’s business;
(d) cause or permit any amendments to its Company Certificate of Incorporation or Company Bylaws;
(e) declare, set aside or pay any dividends on or make any like change other distributions (whether in cash, stock or property) in respect of any Company Securities Capital Stock, or split, combine or reclassify any Company Capital Stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of Company Capital Stock, except for the conversion of any outstanding shares of Company Preferred Stock into shares of Company Common Stock, the exercise of any outstanding Company Warrants and the conversion of any outstanding Company indebtedness into shares of Company Preferred Stock or Company Subsidiary Securities, Common Stock pursuant to the terms thereof;
(iif) repurchase, redeem or otherwise acquire, directly or offer to repurchase, redeem or otherwise acquireindirectly, any shares of Company Securities Capital Stock (or options, warrants or other than rights exercisable therefor), except in accordance with the Convertible Notes as contemplated by the terms thereof) agreements evidencing Company Options or Company Subsidiary SecuritiesCapital Stock (i) upon termination of an Employee or consultant of the Company pursuant to a restricted stock purchase agreement or (ii) upon exercise of a contractual right of first refusal in favor of the Company;
(g) acquire or agree to acquire by merging or consolidating with, (iii) declare, set aside or pay by purchasing any dividend assets or distribution (whether in cash, stock, property or otherwise) in respect equity securities of, or enter into by any Contract with respect to the voting ofother manner, any Company Securities business or Company Subsidiary Securities (other than dividends from a direct any Person or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreementdivision thereof, or (iv) the issuance otherwise acquire or agree to acquire outside of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replacedassets thereof;
(eh) acquire, by merger, consolidation, acquisition create any subsidiary of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practiceCompany;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness or guarantees of indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;securities; or
(j) enter into or modify any Contract employment, severance or similar contract, or grant any bonuses, salary increases, severance or termination pay or other material increases in benefits to any Employee of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a)the Company;
(k) make hire or engage any material employees or consultants, or encourage any Employees or consultants to resign from the Company, or promote any Employees or change in the employment status or titles of any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;the Employees; or
(l) maketake, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund agree in writing or otherwise make a material change in the Tax compliance practices of the Companyto take, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingactions described in Sections 4.1(a) through (k) above, or any other action that would prevent the Company from performing or cause the Company not to perform its obligations hereunder.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's ’s brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' ’ business organization, to keep available the services of its and its Subsidiaries' ’ current officers and employees, to preserve its and its Subsidiaries' ’ present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' ’ Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's ’s existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's ’s capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's ’s insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's ’s insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoing.
Appears in 1 contract
Conduct of Business of the Company. From the date hereof until the earlier of the termination of this Agreement and the Closing Date:
(a) The Company shallwill, and shall will cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted (except to the extent expressly provided otherwise in this Agreement or as consented to in writing by Parent);
(b) The Company will and will cause each of its Subsidiaries to , (1) pay all material respects of its debts and Taxes when due, except to the extent such debts or Taxes are being contested in good faith by appropriate proceedings and for which adequate reserves according to GAAP have been established, (2) pay or perform its other obligations when due and use commercially reasonable efforts to pay all accounts payable of the Company and its Subsidiaries prior to Closing, (3) use commercially reasonable efforts consistent with past practice and policies to collect accounts receivable when due and not extend credit outside of the ordinary course of business; (4) sell products and services consistent with past practices as to license, service and maintenance terms and incentive programs; (5) recognize revenue consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain policies and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its termsGAAP, (ii6) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of pay any accrued bonuses or commissions payable after the date of this Agreement in accordance with their terms, (iii) hereof and before the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made Effective Time in the ordinary course of business and (7) use commercially reasonable efforts consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action practice to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) preserve intact its present business organizations, (B) retain the services of its present officers and other senior employees, and (C) preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, to the end that its goodwill and ongoing businesses will be unimpaired at the Closing Date;
(c) The Company will , and will cause each of its Subsidiaries to promptly notify Parent of any change, occurrence or event not in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, and of any change, occurrence or (C) pursuant to existing Contracts event which, individually or otherwise in the ordinary course of business consistent aggregate with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person changes, occurrences and events, has had or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would could reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of have a Material Adverse Effect on the Company or which is reasonably likely to cause any of its Subsidiaries;the conditions in Article 5 not to be satisfied; and
(hd) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or thatThe Company will use commercially reasonable efforts to, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in and will cause each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries to use commercially reasonable efforts to, ensure that each of the Contracts entered into on or Affiliates after the date hereof by it will not require the procurement of any consent, waiver or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) novation or (viii) of Section 4.13(a);
(k) make provide for any material change in the obligations of any method of financial accounting principles party in connection with, or practices, in each case except for any such change required by terminate as a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) result of the Company Disclosure Letterconsummation of, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingTransactions.
Appears in 1 contract
Conduct of Business of the Company. The Except (i) as otherwise expressly provided in this Agreement, (ii) as consented to in writing by Parent, or (iii) with respect to or in connection with the consummation of the Storage USA Acquisition, or as contemplated by the Storage USA Transaction Agreements and the merger contemplated thereby (it being understood and agreed that the Company shallshall not increase the price to be paid in connection with the Storage USA Acquisition or make any material change to the Storage USA Transaction Agreements or grant any material waiver, and consent or election thereunder, except with Parent's consent, provided further that Parent shall cause each be deemed to have consented to any such proposed price increase or material change, waiver, consent or election, as the case may be, if Parent has not responded to the Company's request for consent pursuant to this Section 5.1(iii) within 24 hours of its Subsidiaries tothe delivery of such request), during the period from the date of this Agreement until the earlier of (i) hereof to the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the BoardTime, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with will, and will cause each of its subsidiaries to, and will use commercially reasonable efforts to cause the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed)Public Investees to, conduct its business in all material respects their respective operations in the ordinary and usual course of business, business consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, with no less diligence and effort than would be applied in the Company shallabsence of this Agreement, and shall cause each of its Subsidiaries to, use reasonable best efforts seek to maintain and preserve intact its and its Subsidiaries' their respective current business organizationorganizations, seek to keep available the services of its and its Subsidiaries' their respective current officers and employees, employees and seek to preserve its and its Subsidiaries' present their respective relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees suppliers and other Persons others having material business relationships dealings with it or its Subsidiaries (it being agreed to the end that goodwill and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 ongoing businesses shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement)unimpaired. Without limiting the generality of the foregoing, between the date of this Agreement and but subject to clauses (i) through (iii) above, prior to the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawSchedule, the Company shall will not, and will use commercially reasonable efforts to cause the Public Investees not to, nor shall it permit any of its Subsidiaries subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed)::
(a) amend their respective charters or propose to amend its bylaws (or any of its Subsidiaries' Charter Documentsother similar governing instrument);
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities convertible into or exchangeable for any stock or any equity equivalents (including any stock options or stock appreciation rights), except for (i) adjustthe issuance or sale of Shares pursuant to the exercise of Company Stock Options and conversion of Preferred Stock and the Company's 6.5% Convertible Subordinated Debentures due 2016 in accordance with the terms thereof (for a number of Shares not to exceed the maximum number of Shares set forth in Section 2.2), split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer (A) automatic grants of Company Stock Options to repurchase, redeem or otherwise acquire, any directors of the Company Securities (other than in accordance with plan terms in effect on the Convertible Notes as contemplated by date hereof(B) the terms thereof) or grant of new Company Subsidiary SecuritiesStock Options upon the exercise of outstanding Company Stock Options containing a reload feature requiring a new option grant upon such exercise, (iiiC) the grant of options, in the ordinary course consistent with past practice by subsidiaries of the Company or (D) the grant of Restricted Stock Units pursuant to the Company's matching share program.;
(i) split, combine or reclassify any shares of their respective stock; (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect ofof their respective stock, or enter into any Contract with respect to except the voting of, any Company Securities or Company Subsidiary Securities (other than declaration and payment of regular quarterly cash dividends from a direct or indirect wholly owned Subsidiary not in excess of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) dividend amounts provided for in the issuance of shares of Company Common Stock upon instrument defining the exercise of any Company Equity Award outstanding as rights of the date of this Agreement Preferred Stock, with usual record and payments dates in accordance with its termspast dividend practice; (iii) make any other actual, (ii) the issuance of shares of Company Common Stock constructive or deemed distribution in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of any shares of Company Common Stock upon exercise of their respective stock or otherwise make any Warrant that is outstanding payments to stockholders in their capacity as of the date of this Agreement, such; or (iv) the issuance redeem, repurchase or otherwise acquire any of shares their respective securities or any securities of Company Common Stock upon the conversion any of Convertible Notestheir respective subsidiaries;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(ge) repurchasealter, prepay through merger, liquidation, dissolution, reorganization, restructuring or in any other fashion, their respective corporate structures or ownership of any subsidiary or joint venture;
(f) (i) incur or assume any indebtedness for borrowed money long-term or guarantee any such indebtedness of another Person, short-term debt or issue or sell any debt securities or optionssecurities, warrants, calls or other rights to acquire any debt securities except for borrowings under existing lines of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary and usual course of business consistent with past practicepractice in aggregate amounts not to exceed $50 million other than in connection with the Storage USA Acquisition and in connection with the other transactions listed in Section 5.1(f) of the Company Disclosure Schedule (which, notwithstanding anything to the contrary herein, shall be expressly permitted hereby); (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 and usual course of business consistent with past practice and in aggregate amounts not to exceed $50 million; (iii) make any capital contributions to, or take investments in, any action (other person, other than to the entry into this Agreement and the other Company Transaction Documentswholly owned subsidiaries; (iv) that would reasonably be expected to result in any material amendment, modification pledge or adverse change to any term of, or material default under, any material indebtedness otherwise encumber shares of stock of the Company or its subsidiaries; or (v) mortgage or pledge any of its Subsidiariestheir respective material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon;
(hg) except as may be required by Law, an existing agreement or as contemplated by this Agreement, (i) enter into into, adopt or amend or terminate any new line bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund, award or other arrangement for the benefit or welfare of any director, officer or employee in any manner except for any such actions taken in the ordinary and usual course of business or make or agree to make any new capital expenditure in excess of $250,000 or consistent with past practice and that, in the aggregate, are do not result in excess of $500,000, other than (A) as contemplated by a material increase in the Company's capital expenditure budgetaggregate benefits and compensation expense, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, and (ii) except increase in any manner the ordinary course compensation or fringe benefits of business consistent any director or officer of the Company or pay any benefit not required by any plan and arrangement as in effect as of the date hereof or as modified in accordance with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material this subsection (g) (including the granting of stock appreciation rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IPperformance units);
(ih) dischargeacquire, settlesell, compromise, assign lease or satisfy dispose of any material claim, whether or not pending before a Governmental Entity, (i) assets outside the ordinary and usual course of business consistent with past practice or any assets which individually or in the aggregate have a book or fair market value in excess of $3,000,000, enter into any commitment or transaction outside the ordinary and usual course of business consistent with past practice or grant any exclusive distribution rights other than with respect to the disposition of the Company's right, title and interest in and to 19,403,417 shares of CarrAmerica Realty Corporation, a Maryland real estate investment trust, which shall be specifically permitted hereunder regardless of any other provision hereof;
(i) except as may be required as a result of a change in Law or in GAAP, change any of the accounting principles or practices used by them (whether for financial accounting or Tax purposes);
(j) revalue in any material respect any of their respective assets, including writing-off notes or accounts receivable or modify in any material respect any reserve, in each case, other than in the ordinary and usual course of business consistent with past practice or as required by GAAP;
(a) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or any equity interest therein; (b) enter into any contract or agreement, other than in the ordinary and usual course of business consistent with past practice or amend in any material respect any of the Material Contracts or the policies referred to in Section 3.18; (c) authorize any new capital expenditure or expenditures which are in excess of those contemplated the budgets previously provided by the Company to Parent; or (iv) enter into or amend any contract, agreement, commitment or arrangement providing for the taking of any action that would be prohibited hereunder;
(l) make or revoke any Tax election (except as required by law), or settle or compromise any Tax liability, material to the Company and its subsidiaries taken as a whole (taking into account only the Company's actual ownership interest in each of its subsidiaries), or change (or make a request to any taxing authority to change) any material aspect of their respective method of accounting for Tax purposes;
(m) 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 in the ordinary and usual course of business consistent with past practice of liabilities reflected or reserved against in the consolidated financial statements of such person and its subsidiaries or incurred in the ordinary and usual course of business consistent with past practice or waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which such person or any of its subsidiaries is a party;
(n) settle or compromise any pending or threatened suit, action or claim relating to the Merger;
(o) enter into any agreement or arrangement that limits or otherwise restricts such person or any of its subsidiaries or any successor thereto or that would, after the Effective Time, limit or restrict the Surviving Corporation and its affiliates (including Parent) or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(p) in any case where the Company, as such, has a contractual right to consent to any matter requested or proposed by Storage USA or Regency, the company shall not so consent without Parent's consent, which shall not be unreasonably withheld or delayed;
(q) take, propose to take, or agree in writing or otherwise to take, any of the actions described in Sections 5.1(a) through 5.1(n) or any action which would make any of the representations or warranties of the Company contained in this Agreement (i) which are qualified as to materiality untrue or incorrect or (ii) relating which are not so qualified untrue or incorrect in any material respect. For purposes of this Agreement, the Company shall be deemed to have used its commercially reasonable efforts to cause the Public Investees to take or arising from not take any securities class action claims or related derivative claimsactions contemplated herein if the Company (i) exercises all voting rights, in each case except to the extent such claim is fully covered by that the Company's insurance policies (other than taking or not taking of any applicable deductible), but only if action requires a vote of the discharge, settlement, compromise, assignment or satisfaction stockholders of such claim would not result in the imposition of Public Investee, (ii) exercises all rights under any material restriction on the business contract or operations of agreement to which the Company or any of its Subsidiaries or Affiliates or subsidiaries is a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii)party, and (iii), (iv), (v) causes its representatives acting as members of the board of directors or (viii) trustees of Section 4.13(a);
(k) make any material change in any method of financial accounting principles such Public Investees subject to their fiduciary duties to such Public Investees or practices, in each case except for any such change required by a change in GAAP or trustees and their shareholders under applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method to exercise all rights as directors of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amountsuch Public Investee, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingapplicable.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date termination of this Agreement and the Effective Time, except (i) as otherwise expressly permitted prohibited or required by this Agreement or Law, (ii) as set forth on Section 6.01 of in the Company Disclosure LetterLetter or (iii) as otherwise required or contemplated by this Agreement, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company unless Parent shall not, nor shall it permit any of its Subsidiaries to, without the prior written otherwise consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its termsshall, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any and shall cause each of its Subsidiaries to directors or officersto, other than increases in compensation made (x) conduct its business in the ordinary course of business consistent with past practice and (y) use commercially reasonable efforts to preserve intact its business organization and material business relationships and keep available the services of its current officers and employees;
(ii) without limiting the generality of Section 6.01(a)(i), the Company shall:
(A) Maintain the Card Network Registration (and any other registration or qualification required by the applicable Card Networks) to issue Card Network branded Cards and operate the Card program, in all material respects respects;
(B) maintain and operate an anti-money laundering and customer identification program for its Customers and Cardholders as required by applicable Law, including as necessary to complete the Screening Requirements and any Order, including that certain Memorandum of Understanding, dated June 10, 2013, by and between the Board of Directors of Company and the California Department of Business Oversight, in all material respects; and
(C) promptly notify Parent of any notice that Company receives from the Card Networks, the Company’s sponsor bank for Card Network purposes, any department of labor, banking regulator or other regulatory authority, including the Consumer Financial Protection Bureau, which indicates or suggests that (1) the Company is not authorized or permitted to provide the products or services it offers to its Customers or other parties, (2) the Company has experienced a material data breach, (3) any other event has occurred or is likely to occur which relates to a material violation of applicable Law, any Order or (4) otherwise is material to Company and its Subsidiaries;
(iii) without limiting the generality of Section 6.01(a)(i) and to the fullest extent permitted by Law, the Company shall not, and shall not permit any of its Subsidiaries to, do any of the following without the prior written consent of Parent:
(A) amend the Company Charter or the Company By-laws or amend in any material respect (or in any respect adversely impacting Parent or Merger Sub) the comparable organizational documents of any Subsidiary of the Company, or enter into any written agreement with any of the Company’s stockholders in their capacity as such;
(B) (1) issue, sell, encumber or grant any shares of its capital stock or other equity or voting interests, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its capital stock or other equity or voting interests, or any rights, warrants or options to purchase any shares of its capital stock or other equity or voting interests, except for any issuance, sale or grant solely between or among the Company and its Subsidiaries, (2) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock or other equity or voting interests, or any rights, warrants or options to acquire any shares of its capital stock or other equity or voting interests, except, in each case, pursuant to written commitments in effect as of the date hereof and set forth in the Company Disclosure Letter with former directors or employees in connection with repurchase of Company Stock Options upon the termination of their services to the Company or any of its Subsidiaries, (3) in the case of the Company, establish a record date for, declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or other equity or voting interests, (4) split, combine, subdivide or reclassify any shares of its capital stock or other equity or voting interests, or (5) amend the Company Stock Plan;
(C) (1) incur any Indebtedness, except for (I) Indebtedness solely between or among the Company and any of its Subsidiaries, (II) letters of credit and/or bankers’ acceptances issued in the ordinary course of business, (III) Indebtedness incurred under (x) the Credit Agreement (including in respect of letters of credit and/or bankers’ acceptances), (y) bank lines of credit in effect as of the date hereof used to fund short term working capital requirements of Subsidiaries of the Company organized outside of the United States or (z) the Receivables Facility, (IV) trade credit or trade payables in the ordinary course of business consistent with past practice, or enter into (2) make any new loans, capital contributions or amend advances to any person outside of the ordinary course of business consistent with past practice in amounts greater than $750,000 other than to the Company or any Subsidiary of the Company;
(D) sell, lease (as lessor), license, mortgage, sell and leaseback or otherwise subject to any Lien (other than Permitted Liens), or otherwise dispose of any material respect, any existing employment properties or consulting, bonus, severance, retirement, retention, change in control assets or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, interests therein other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A1) in the ordinary course of business consistent with past practice with respect to employees with for fair market value in an annual base salary amount not to exceed $150,000750,000 in the aggregate, or (B2) pursuant to replace existing employees whose employment has terminatedContracts in existence on the date of this Agreement, at compensation levels and (3) with benefits consistent in all material respects with that of the employee replaced;
respect to transactions (ex) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than where the Company or is the disposing party, among the Company and one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and Subsidiaries in the ordinary course of business consistent with past practicepractice or (y) where its Subsidiary is the disposing party, among the Company and one or more of its Subsidiaries or among its Subsidiaries, or (B4) employee loans pursuant to the Receivables Facility;
(E) make any material change in financial accounting methods, principles or advances for travelpractices, businessexcept insofar as may have been required by a change in GAAP or Law (after the date of this Agreement);
(F) enter into or amend any Material Contract to the extent consummation of the Merger or compliance by the Company or any of its Subsidiaries with the provisions of this Agreement would reasonably be expected to conflict with, relocation or result in a violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation, any obligation to make an offer to purchase or redeem any Indebtedness or capital stock or any loss of a material benefit under, or result in the creation of any Lien upon any of the material properties or assets of the Company or any of its Subsidiaries under, or require Parent, the Company or any of their respective Subsidiaries to license or transfer any of its material properties or assets under, or give rise to any increased, additional, accelerated, or guaranteed right or entitlements of any third party under, or result in any material alteration of, any provision of such Contract or amendment; provided, however that Company and its Subsidiaries shall not enter into any agreement to refinance any of their respective outstanding Indebtedness or other reimbursable expenses made debt obligations without the prior written consent of Parent;
(G) assign, transfer, lease, cancel, fail to renew or fail to extend any material Permit;
(H) settle or compromise, or propose to settle or compromise, any Action involving or against the Company or any of its Subsidiaries, other than settlements or compromises involving only monetary payment by the Company or any of its Subsidiaries in an amount not to exceed $500,000 individually or $1 million in the aggregate; provided, however, any such settlements or compromises with customers for less than $10,000 shall not count toward the $1 million cap in this Section 6.01(a)(iii)(H);
(I) abandon, encumber, convey title (in whole or in part), exclusively license or grant any material right, material license or exclusive licenses to material Intellectual Property owned by or exclusively licensed to the Company or any of its Subsidiaries, or enter into licenses or agreements that impose material restrictions upon the Company or any of its Affiliates with respect to material Intellectual Property owned by any third party and impair the operation of the business of the Company or any of its Affiliates, in each case, other than in the ordinary course of business consistent with past practice;
(fJ) (i) transferexcept for amendments, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) terminations or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility non-renewals in the ordinary course of business consistent with past practice, or take any action amend, waive, fail to enforce (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in each case, in any material amendmentrespect), modification assign or adverse change to terminate any term of, or material default under, any material indebtedness of the Company or any of its SubsidiariesMaterial Contract;
(hK) (i) enter into except as required by Law, pursuant to the terms of any new line of business Company Benefit Plan or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (1) materially increase the compensation of any executive officer, (2) grant any new equity award, (3) materially increase the benefits provided under any Company Benefit Plan, (4) implement any raises or (5) increase or decrease any bonus targets;
(L) take or omit to take any action if such action or failure to act would be reasonably likely to prevent or impede the Merger from qualifying as a “reorganization” within the meaning of Sections 368(a)(1)(A) (by reason of Section 368(a)(2)(E) of the Code) and 368(a)(1)(B) of the Code;
(M) take or omit to take any action (including taking a position on a Tax Return) if such action or failure to act would be reasonably likely to prevent or impede the Spin Transaction from (i) qualifying as a reorganization within the meaning of Section 368(a)(1)(D) of the Code for the Company and Ceridian HCM and under Section 355 and related provisions of the Code (including Section 361(c)(1) of the Code) or (ii) except not being taxable by reason of Section 355(e) of the Code;
(N) make or change any material tax election (other than customary elections made in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductiblebusiness), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of change any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial annual tax accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax electionperiod, adopt or change any material method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letteraccounting, extend amend any Tax Returns or waive the application of file claims for tax refunds, enter any statute of limitations regarding the assessment closing agreement, settle any material tax claim, audit or collection of assessment, or surrender any federal Tax or material stateright to claim a tax refund, local offset or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refundreduction in tax liability;
(O) except as set forth in Section 7.08(h), enter into any material agreement relating to federal, state, local amendment or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in termination of the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Matters Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(nP) enter into any Store Leases other than amendment of the Employee Matters Agreement, dated as of October 1, 2013, by and among the Stockholder, Ceridian HCM and the Company that modifies the pension indemnity provided therein in a manner adverse to the ordinary course Company;
(Q) terminate or enter into any amendment to that certain Transition Services Agreement, dated as of business consistent October 1, 2013, by and between Ceridian HCM and the Company, as amended;
(R) hire any employee, independent contractor or similar individual with a base salary in all material respects with past practiceexcess of $100,000 per year; or
(oS) agree agree, commit or commit propose to do take any of the foregoingforegoing actions.
(iv) The Stockholder shall not, and shall cause its Subsidiaries (including the Company) not to, repay any Indebtedness that would constitute Repaid Indebtedness other than out of cash flows of the Company and its Subsidiaries.
Appears in 1 contract
Conduct of Business of the Company. The Company shallExcept as ---------------------------------- contemplated by this Agreement, during the period from the date hereof to the Closing Date, each Seller will, and shall will cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects operations in the ordinary course Ordinary Course of business, consistent with past practice Business (including with respect to future purchase commitments for each the continued maintenance, servicing and refurbishment and retrieval of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closuresIRDs) and, to the extent consistent therewith, with no less diligence and effort than would be applied in the Company shallabsence of this Agreement, and shall cause each of its Subsidiaries to, use reasonable best efforts seek to maintain and preserve intact its current business organizations, and its Subsidiaries' business organization, seek to keep available the services service of its and its Subsidiaries' current officers and employees, key employees and seek to preserve its and its Subsidiaries' present relationships and goodwill with master sales agents, Full Service Providers, customers, suppliers, lessors, distributors, licensors, licensees suppliers and other Persons others having material business relationships dealings with it or its Subsidiaries (it being agreed to the end that goodwill and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 ongoing businesses shall be deemed to be a breach of unimpaired at the foregoing unless such action would constitute a breach of such other provision of this Agreement)Closing Date. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by provided in this Agreement or as set forth on Section 6.01 of the Company Disclosure LetterAgreement, the relevance of which disclosure prior to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-referenceClosing Date, or as required by applicable Law, the Company each Seller shall not, nor and shall it not permit any of its Subsidiaries to, without the prior written consent of Parent Buyer (which consent shall will not unreasonably be unreasonably withheld, conditioned withheld or delayed):
(a) amend its certificate or propose articles of incorporation or bylaws (or other similar governing instrument) in a manner that would reasonably be likely to amend its have an adverse effect on the Business, the Transferred Assets or any the rights of its Subsidiaries' Charter DocumentsBuyer hereunder;
(b) (i) adjust, split, combine, reclassify or make any like change except in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquireconnection with the Debt Tender Condition, or offer to repurchaseas otherwise provided herein or consistent herewith, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any reorganization of such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company Seller or any of its Subsidiaries, guarantee provided, that any debt securities such action taken in connection with the Debt -------- Tender Condition, may only be taken by such Seller if such action would not interfere with, or be inconsistent with, the rights of another PersonBuyer under this Agreement and would not be reasonably likely to result in a Material Adverse Change;
(c) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Subsidiary of such Seller;
(d) except as contemplated by this Agreement, (i) enter into into, adopt or amend or terminate any “keep well” bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase, pension, retirement, deferred compensation, employment, severance or other Contract to maintain any financial statement condition employee benefit agreement, trust, plan, fund, award or other arrangement for the benefit or welfare of any director, officer or employee in any manner (other Person than any Stay Bonuses paid in accordance with the terms hereof or any other stay bonuses paid at such Seller's expense that such Seller reasonably determines in good faith to be necessary to retain the services of the recipients thereof through the Closing Date); provided, that such Seller may amend its severance plans as long -------- as such amendment does not increase the Liability of Buyer or adversely affect Buyer's rights hereunder; or (ii) except for normal increases in the Ordinary Course of Business that, in the aggregate, do not result in a material increase in benefits or compensation expense to either Seller, increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan and arrangement as in effect as of the date hereof (including the granting of stock appreciation rights or performance units);
(e) except as set forth on Schedule 9.1(e), hire or retain any --------------- individual as an employee of or consultant to such Seller or any Subsidiary of such Seller, except in the Ordinary Course of Business;
(f) except as set forth on Schedule 9.1(f), modify in any material --------------- respect any Material Contract or enter into or renew any arrangement having material Contract which, if in effect on the economic effect date hereof, would have been required to be disclosed on Schedule 6.11(a); ----------------
(g) except as may be required as a result of a change in Law or in GAAP, change any of the foregoingaccounting principles or practices used by it;
(h) revalue any of its assets, including writing up or down the value of inventory or writing-off notes or accounts receivable other than in the Ordinary Course of Business;
(i) make or revoke any tax election or settle or compromise any tax liability material to such Seller, or change (or make a request to any taxing authority to change) any material aspect of its method of accounting for tax purposes, other thanthan such revocation, settlement, compromise or change that does not increase any Liability of Buyer or adversely affect Buyer or its rights hereunder;
(j) pay, discharge or satisfy any material claims or Liabilities, other than the payment, discharge or satisfaction of Liabilities reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) of Primestar and its Subsidiaries;
(k) settle or compromise any pending or threatened material Action or Contractual claim or initiate or join any material Action or Contractual claim, including any Action or claim arising under the Loral Contract, other than any such Action or claim relating to any Excluded Assets or Excluded Liabilities; provided, that, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course such settlement or compromise does not increase -------- any Liability of business consistent with past practice, Buyer or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification adversely affect Buyer or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiariesrights hereunder;
(hl) (i) incur or assume any long-term or short-term debt or issue any debt securities except for borrowings under existing lines of credit in the Ordinary Course of Business and in amounts not material to such Seller and its Subsidiaries, taken as a whole; (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 in amounts not material to such Seller and its Subsidiaries, taken as a whole; (iii) make any loans, advances or capital contributions to, or investments in, any other Person (other than customary loans or advances to employees in the Ordinary Course of Business and in amounts not material to the maker of such loan or advance); (iv) pledge or otherwise encumber shares of capital stock of such Seller or its Subsidiaries; or (v) mortgage or pledge any of its assets, tangible or intangible, or create or suffer to exist any Lien thereupon;
(m) except as contemplated by the High Power Agreement, (i) acquire, sell, lease or dispose of any assets outside the Ordinary Course of Business or any assets which in the aggregate are material to such Seller and its Subsidiaries, taken as a whole; (ii) enter into any new line commitment or transaction outside the Ordinary Course of Business; or (iii) grant any exclusive distribution rights;
(i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or make division thereof or agree to make any equity interest therein; (ii) authorize any new capital expenditure or expenditures which, individually, is in excess of $250,000 or that10,000 or, in the aggregate, are in excess of $500,0001 million, other than (A) as contemplated by the Company's capital expenditure budgetpurchase of 75,000 IRDs under the GI Contract pursuant to purchase orders in effect on the date hereof and purchases of Dishes, which has been provided or made available to ParentLNBs, or (B) Primefinder Remotes and other equipment in the ordinary course Ordinary Course of business consistent with past practice, (ii) except in Business at the ordinary course expense of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder Sellers; or (iii) dispose of, grant, obtain enter into or permit to lapse amend any material Company IPContract providing for the taking of any action that would be prohibited hereunder;
(io) dischargemodify or alter any of its programming content or the Subscriber acquisition and packaging offers currently being utilized or enter into any new programming Contracts, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition commercially reasonable response to promotional market activity of any material restriction on the business multichannel video programming distributor which is intended by Seller to retain existing Subscribers or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiumsto obtain new Subscribers;
(jp) enter into disclose to any Contract of a type referenced in clause (ii), (iii), (iv), (v) Person other than Buyer or (viii) of Section 4.13(a);
(k) make its representatives any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local Records or other Tax election, adopt or change information regarding any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practiceSubscribers; or
(oq) take, propose to take, or agree in writing or commit otherwise to do take, any of the foregoingactions described in Section 9.1(a) through Section 9.1(p) or any -------------- -------------- other action which would make any of the representations or warranties of such Seller contained in this Agreement untrue or incorrect.
Appears in 1 contract
Samples: Asset Purchase Agreement (Tci Satellite Entertainment Inc)
Conduct of Business of the Company. The During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement and the Effective Time, the Company shallagrees (unless the Company is required to take such action pursuant to this Agreement or Acquiror shall give its prior consent in writing which consent shall not be unreasonably withheld) to carry on its business in the usual, regular and shall cause each ordinary course consistent with past practice and in any event consistent with the Company's 2000 Operating Plan provided prior to the date of this Agreement to Acquiror, to pay its Liabilities and Taxes consistent with the Company's past practices (and in any event when due, unless subject to a good faith dispute), to pay or perform other obligations when due consistent with the Company's past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith through appropriate proceedings), and, to the extent consistent with such business, to use reasonable efforts and institute all policies to preserve intact its present business organization, keep available the services of its Subsidiaries topresent officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, independent contractors and other Persons having business dealings with it, all with the express purpose and intent of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. Except as expressly contemplated by this Agreement, the Company shall not, without the prior written consent of Acquiror, take or agree in writing or otherwise to take, any action that would result in the occurrence of any of the changes described in Section 3.6 of this Agreement. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of (i) the termination of this Agreement or the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the BoardTime, except as set forth in the Company Disclosure Schedule or as required or expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall notnot do, nor shall it cause or permit any of its Subsidiaries tothe following, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoing.Acquiror:
Appears in 1 contract
Samples: Merger Agreement (Valueclick Inc/Ca)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as Except for matters set forth on in Section 6.01 to of the Company Disclosure Letter or otherwise expressly permitted or required by this Agreement, as required by applicable Law or with the prior written consent of Parent (which consent shall not to be unreasonably withheld, conditioned delayed or delayedconditioned), conduct its business in all material respects in from the ordinary course of business, consistent with past practice (including with respect Agreement Date to future purchase commitments for each the earlier of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to Offer Closing Time and the extent consistent therewithtermination of this Agreement in accordance with its terms (the “Pre-Closing Period”), the Company shall, and shall cause each of its the Company Subsidiaries to, conduct its business in the ordinary course and use commercially reasonable best efforts to maintain and (x) preserve intact its and its Subsidiaries' present business organization, to (y) keep available the services of its present officers at the vice president level and its Subsidiaries' current officers above and employees, to (z) preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees licensees, contractors, partners and other Persons others having material business relationships dealings with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement)it. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective TimeIn addition, except as otherwise expressly permitted by this Agreement or as for matters set forth on in Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in Letter or otherwise expressly permitted or required by this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure Agreement or cross-reference, or as required by applicable Law, during the Pre-Closing Period, the Company shall not, nor and shall it permit cause the Company Subsidiaries not to, do any of its Subsidiaries to, the following without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned delayed or delayedconditioned):
(a) amend (i) enter into any new material line of business or propose enter into any agreement, arrangement or commitment that materially limits or otherwise restricts the Company or its affiliates, including, following the Merger Closing, Parent and its affiliates (other than in the case of Parent and its affiliates, due to amend the operation of Parent’s or its affiliates’ own Contracts), from time to time engaging or competing in any line of business or in any geographic area or (ii) otherwise enter into any agreements, arrangements or commitments imposing material restrictions on its Subsidiaries' Charter Documentsassets, operations or business;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside aside, establish a record date in respect of, accrue or pay any dividend dividends on, or distribution make any other distributions (whether in cash, stock, property equity securities or otherwiseproperty) in respect of, or enter into any Contract with respect to the voting ofof its capital stock, any Company Securities or Company Subsidiary Securities (other than dividends from and distributions of cash by a direct or indirect wholly owned Subsidiary subsidiary of the Company to its parent), (ii) 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 (iii) repurchase, redeem, offer to redeem or otherwise acquire, directly or indirectly any shares of capital stock of the Company or options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire any such shares of capital stock, except for (A) acquisitions of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options outstanding on the Agreement Date in order to pay the exercise price of Company Stock Options, (B) the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to awards granted pursuant to the Company Stock Plans outstanding on the Agreement Date and (C) the acquisition by the Company of Company Stock Options and Company RSUs, in each case, outstanding on the Agreement Date in connection with the forfeiture of such awards, in each case, in accordance with their terms;
(c) issue, grant, deliver, sell, pledgeauthorize, dispose of, transfer, modify pledge or otherwise encumber any shares of its capital stock or options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire such shares, any Voting Company Securities Debt or any other rights that give any person the right to receive any economic interest of a nature accruing to the holders of Company Subsidiary SecuritiesCommon Stock, other than (i) the issuance of shares issuances of Company Common Stock upon the exercise of any Company Equity Award outstanding as of Stock Options or purchase rights under the date of this Agreement in accordance with its termsCompany ESPP, (ii) the issuance of shares settlement of Company Common Stock RSUs or upon the exercise of Company Warrants, in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement each case, in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) amend its certificate of incorporation, bylaws or other comparable organizational documents (iexcept for immaterial or ministerial amendments);
(e) form any subsidiary or acquire or agree to acquire, directly or indirectly, in a single transaction or a series of related transactions, whether by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any assets outside of the ordinary course of business, any business or any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof or any other Person (other than the Company), if the aggregate amount of consideration paid or transferred by the Company or either Company Subsidiary would exceed $250,000;
(f) except as required by applicable Law or required or permitted by pursuant to the terms of any Company Employee Benefit Plan or written Contract existing prior to Company Benefit Agreement, in each case, as in effect on the date of this Agreement that has been disclosed or made available to ParentDate, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, (i) adopt, enter into, amendestablish, terminate terminate, amend or modify any collective bargaining agreement, Company Benefit Plan or Company Benefit Agreement (or plan or arrangement that would be a Company Benefit Plan or Company Benefit Agreement if in effect on the Agreement Date), (ii) grant to any director, employee or individual service provider of the Company or any Company Subsidiary any increase in base or other compensation, (iii) grant to any director, employee or individual service provider of the Company or any Company Subsidiary any increase in severance or termination pay, (iv) pay or award, or commit to pay or award, any bonuses or incentive compensation, (v) enter into any employment, retention, consulting, change in control, severance, or termination agreement with any director, employee or individual service provider of the Company or any Company Subsidiary, (vi) take any action to accelerate any material rights or benefits under any Company Employee Plans Benefit Plan or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Benefit Agreement, or the funding of any payments or benefits under any Company Benefit Plan or Company Benefit Agreement or (vii) hire or terminate (other than for cause) the employment or service of any employee or individual service provider;
(g) make any contribution change in accounting methods, principles or practices, except as may be required (i) by GAAP (or any authoritative interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, similar organization or (ii) hire any new employeesby Law, except (A) including Regulation S-X promulgated under the Securities Act, in each case, as agreed to by the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replacedCompany’s independent public accountants;
(eh) acquiresell, by mergerlease (as lessor), consolidation, acquisition of stock license or assetsotherwise transfer (including through any “spin-off”), or otherwisepledge, encumber or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, otherwise subject to any Lien (other than a Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwiseLien), including the capital stock any properties or assets (other than Intellectual Property) except (i) sales or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus inventory and excess or worn out assets obsolete properties or assets that are no longer useful in the conduct ordinary course of the business of the Companybusiness, (B) transfers among the Company and its Subsidiaries, or (Cii) pursuant to existing Contracts to which the Company is a party made available to Parent and in effect prior to the Agreement Date or (iii) properties or assets having a fair market value of less than $250,000 in the aggregate;
(i) sell, assign, license or otherwise transfer any Company Intellectual Property, except for (i) licenses (including sublicenses) to Intellectual Property granted in the ordinary course of business, (ii) pursuant to Standard IP Contracts, (iii) pursuant to Contracts to which the Company is a party made available to Parent and in effect prior to the Agreement Date or (iv) abandonment or other disposition of any Company Registered Intellectual Property that is at the end of the applicable statutory term, in the ordinary course of prosecution or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationbusiness;
(gj) repurchase, prepay (i) incur or incur materially modify the terms of (including by extending the maturity date thereof) any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls warrants or other rights to acquire any debt securities of the Company or any of its SubsidiariesCompany, guarantee any debt securities of another Person, enter into any “keep well” or other Contract agreement to maintain any financial statement condition of any other another Person or enter into any arrangement having the economic effect of any of the foregoingforegoing or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other thanthan to or in (A) the Company, (B) any acquisition not in each case, borrowings and repayments violation of Section 6.01(e) or (C) any person pursuant to any advancement obligations under the Company Charter, Company Bylaws or indemnification agreements as in effect on or prior to the Agreement Date;
(k) other than in accordance with the Company's existing revolving credit facility ’s capital expenditure budget made available to Parent, make or agree to make any capital expenditure or expenditures that in the aggregate are in excess of the amount set forth in Section 6.01(k) of the Company Disclosure Letter;
(l) pay, discharge, settle, compromise or satisfy (i) any pending or threatened claims, liabilities or obligations relating to a Proceeding (absolute, accrued, asserted or unasserted, contingent or otherwise), including any Proceeding initiated by the Company, other than any such payment, discharge, settlement, compromise or satisfaction of a claim solely for money damages in the ordinary course of business consistent with past practicein an amount not to exceed $250,000 per payment (assuming the payment in full or all future fixed or contingent payments), discharge, settlement, compromise or satisfaction or $1,000,000 in the aggregate for all such payments, discharges, settlements, compromises or satisfactions or (ii) any litigation, arbitration, proceeding or dispute that relates to the Transactions (which shall be governed by Section 7.08 hereof);
(m) make, change or revoke any material Tax election, change any annual Tax accounting period or adopt or change any material method of Tax accounting, file any amended material Tax Return, enter into any closing agreement within the meaning of Section 7121 of the Code (or any similar provision of state, local or foreign Law), or take settle or compromise any action material Tax liability or refund;
(n) amend, cancel or terminate any material insurance policy naming the Company or either Company Subsidiary as an insured, a beneficiary or a loss payable payee without obtaining comparable substitute insurance coverage;
(o) adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its SubsidiariesMerger);
(hp) (i) enter into any new line of business abandon, cancel, fail to renew or make or agree permit to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than lapse (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, any material Company Registered Intellectual Property or (B) any material registered Intellectual Property to the extent that the Company has the right to take or cause to be taken such action pursuant to the terms of the applicable Contract under which such Intellectual Property is licensed to the Company, (ii) fail to renew (to the extent renewable at the option of the Company) or terminate any Contract under which material Intellectual Property is licensed to the Company, (iii) disclose to any third party, other than under a confidentiality agreement or other legally binding confidentiality undertaking, any Trade Secret of the Company that is included in the Company Intellectual Property in a way that results in loss of material Trade Secret protection thereon, except for any such disclosures made as a result of publication of a Patent application filed by the Company or in connection with any required regulatory filing or (iv) sell, transfer, license or otherwise encumber any Company Intellectual Property other than non-exclusive licenses ancillary to research, development, manufacture, clinical testing, sale, distribution and commercialization activities relating to products or services entered into in the ordinary course of business consistent with past practice, business;
(iiq) except in the ordinary course of business consistent or in connection with past practiceany transaction to the extent specifically permitted by any other subclause of this Section 6.01, modifyenter into, amend terminate or terminate modify in any Company material respect, or expressly release any material rights under, any Material Contract or waiveany Contract that, release or assign any material rights or claims thereunder or (iii) dispose ofif existing on the Agreement Date, grant, obtain or permit to lapse any material Company IPwould have been a Material Contract;
(ir) dischargeparticipate in any scheduled meetings or scheduled teleconferences with, settleor correspond in writing, compromisecommunicate or consult with the FDA or any similar Governmental Entity without providing Parent (to the extent reasonably practicable and permitted under applicable Law, assign and excluding routine administrative communications, or satisfy any material claimimmaterial communications) with prior written notice and, whether within 24 hours from the time such written notice is delivered, the opportunity to consult with the Company with respect to such correspondence, communication or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claimsconsultation, in each case except to the extent such claim is fully covered permitted by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(ls) make(i) commence any clinical study of which Parent has not been informed prior to the Agreement Date, revoke (ii) unless mandated by any Regulatory Authority, discontinue, terminate or amend suspend any federal Tax election ongoing clinical study or material state(iii) discontinue, local terminate or other Tax election, adopt or change suspend any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change ongoing IND-enabling preclinical study without first consulting with Parent in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practicegood faith; or
(ot) authorize, commit or agree or commit to do take any of the foregoingforegoing actions.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of (i) the termination of this Agreement pursuant to its terms and the Effective Time Time, the Company (which for the purposes of this SECTION 6.1 shall include the Company and (iieach of its Subsidiaries) agrees, except to the first date on which extent that Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written otherwise consent of Parent in writing (which consent shall not to be unreasonably withheld, conditioned or delayed), conduct to carry on its business in all material respects in the ordinary course of business, consistent with past practice (including with respect and to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries toto carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, and to use and cause each of its Subsidiaries to use all commercially reasonable best efforts consistent with past practices and policies to maintain and preserve intact its and its Subsidiaries' present business organizationorganizations, to keep available the services of its and its Subsidiaries' current present officers and employees, to employees and preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees licensees, and other Persons others having material business relationships dealings with it or its Subsidiaries (it being agreed and understood that no action by the Company or any such Subsidiaries, to the end that the goodwill and ongoing businesses of Company and each of its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and unimpaired at the Effective Time, except . Except as otherwise expressly permitted provided for by this Agreement or as set forth on Section 6.01 of the Company Disclosure LetterAgreement, the relevance of which disclosure to Credit Agreement, the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-referenceLoan Documents, or as required by applicable Lawthe Reseller Agreement , the Company shall not, nor and shall it not permit any of its Subsidiaries to, prior to the Effective Time or earlier termination of this Agreement pursuant to its terms, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) Except as provided in this Agreement or as described in SECTION 6.1(a) of the Company Disclosure Schedule, accelerate, amend or propose change the period of exercisability of options or restricted stock, or reprice options granted under the Company Option Plans or authorize cash payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint development agreements or strategic alliances, except in the ordinary course of business pursuant to the Company's standard form of solution partner enrollment agreement, a form of which has been delivered to Parent, except for such changes thereto that are not material;
(c) Terminate any executive officer or other employee with whom the Company has entered into a retention agreement, including without limitation, those agreements set forth on Section 5.2(p)(ii) of the Company Disclosure 36 Schedules, or, except as required by law, grant any severance or termination pay (i) to any executive officer or (ii) to any other employee, except payments made (A) in connection with the termination of employees who are not executive officers in amounts consistent with the Company's policies and past practices, (B) pursuant to written agreements outstanding, or benefit plans or policies existing, on the date hereof and as previously disclosed in writing to Parent or (C) pursuant to written agreements consistent with the past agreements of the Company or any of its Subsidiaries under similar circumstances;
(d) Transfer, license or sell to any person or entity or otherwise extend, amend or modify any rights to the Company Proprietary Rights (including rights to resell or relicense the Company Proprietary Rights) or enter into grants to future patent rights, other than on standard forms of the Company or any of its Subsidiaries (or pursuant to written agreements negotiated at arm's length) providing for a nonexclusive license entered into in the ordinary course of business, including nonexclusive, enterprise-wide or site licenses.
(e) Commence any material litigation other than (i) for the routine collection of bills, (ii) for software piracy, or (iii) in such cases where the Company in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of the business of the Company or any of its Subsidiaries' Charter Documents, provided that the Company consults with the Parent prior to the filing of such a suit and keeps Parent advised of the status and details of such litigation (provided that, notwithstanding the foregoing, the Company shall not be required to obtain Parent's consent to any claim, suit or proceeding against Parent, Merger Sub, any other Subsidiary of Parent, or any of their affiliates, nor shall the Company be required to consult with Parent with respect thereto);
(bf) (i) adjust, split, combine, reclassify Declare or pay any dividends on or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution distributions (whether in cash, stock or property) in respect of any of its capital stock, property or otherwise) 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 capital stock of the Company;
(g) Repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock;
(h) Issue, deliver, sell or authorize or propose the issuance, delivery, grant or sale of, any shares of its capital stock of any class or securities convertible into, or any subscriptions, rights, warrants or options to acquire, or enter into other agreements or commitments of any Contract with respect character obligating it to the voting of, issue any Company Securities such shares or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securitiesconvertible securities, other than (i) the issuance of shares of Company Common Stock upon (with Company Rights attached thereto) pursuant to the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is stock options or warrants outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law Cause, permit or required or permitted by propose any Company Employee Plan or written Contract existing prior amendments to the date Company's articles of this Agreement that has been disclosed incorporation or made available to Parentbylaws; 37
(j) Sell, increase lease, license, encumber or otherwise dispose of any of the compensation payable properties or that could become payable by assets of the Company or any of its Subsidiaries or terminate or waive any contracts, claims, or rights;
(k) Incur any material indebtedness for borrowed money or guarantee any such prohibited indebtedness or issue or sell any debt securities or warrants or rights to directors acquire debt securities of the Company or officersany of its Subsidiaries or guarantee any debt securities of others;
(l) Except as required by law, other than adopt or amend any Company Scheduled Plan or increase the salary or wage rate of any of its employees (except for wage increases in compensation made in the ordinary course of business and consistent in all material respects with past practicepractices), including but not limited to (but without limiting the generality of the foregoing), the adoption or enter amendment of any stock purchase or option plan, the entering into of any new employment contract or amend in the payment of any material respect, special bonus or special remuneration to any existing employment director or consulting, bonus, severance, retirement, retention, change in control employee;
(m) Revalue any of the assets of the Company or similar agreement with any of its past Subsidiaries, including without limitation writing down the value of inventory, writing off notes or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Planaccounts receivable, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replacedas required by GAAP or applicable law;
(en) acquire, by merger, consolidation, acquisition Except as set forth in SECTION 6.1(n) of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company Disclosure Schedule, pay, discharge or one or more of its Subsidiaries), satisfy in any transaction or series of transactions, an amount in excess of $250,000 100,000 (in any one case) or $400,000 (in the aggregate), except any claim, liability or obligation (Aabsolute, accrued, asserted or unasserted, contingent or otherwise) pursuant other than claims, liabilities or obligations (i) as and when required under contracts or agreements entered into prior to existing Contracts that have been the date hereof and disclosed or made available provided to Parent or (ii) set forth in a schedule delivered to and approved by Parent, including, without limitation, under any employment contract or with respect to any bonus or special remuneration, other than the payment, discharge or satisfaction in the ordinary course of business consistent with past practice, (B) employee loans of liabilities of the type reflected or advances for travel, business, relocation or other reimbursable expenses made reserved against in the ordinary course of business consistent with past practiceCompany Financial Statements (or in the notes thereto);
(fo) Waive any rights of material value or, except as required by applicable Tax law, make or change any material election in respect of Taxes, adopt or change in any material respect any accounting method in respect of Taxes, file any material Return or any amendment to a material Return, enter into any closing agreement, settle any claim or assessment in respect of Taxes (i) transferexcept settlements effected solely through payment of immaterial sums of money), license, sell, lease, sublease, subject or consent to any Lien extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(p) Except for any change that is required by reason of a concurrent change in GAAP, the Company will not, and will not permit any of its Subsidiaries to, change any method of accounting or accounting practice used by it;
(q) Except as otherwise permitted pursuant to SECTION 6.2 AND 6.3, take any action to exempt or make any person, entity or action (other than Permitted LiensParent) or otherwise dispose not subject to the provision of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary Article 13.03 of the Company, any Owned Real Estate, any Lease TBCA or any Leased Real Estate, except (A) dispositions of obsolete, surplus other potentially applicable antitakeover or worn out assets similar statute or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationregulation;
(gr) repurchaseRelease or permit the release of any Person from, prepay or incur waive or permit the waiver of any indebtedness for borrowed money provision of, any confidentiality, "standstill" or guarantee similar agreement to which any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” Subsidiaries is a party or other Contract to maintain any financial statement condition of any other Person under which the Company or enter into any arrangement having the economic effect of any of its Subsidiaries has any rights, and will use its best efforts to enforce or cause to be enforced each such agreement at the foregoingrequest of Parent, other than, in each case, borrowings and repayments under except as otherwise required by the fiduciary duties of the Company's existing revolving credit facility board of directors, as determined in good faith thereby (after consultation with and based on the advice of outside legal counsel). Promptly after the S-4 Registration Statement is declared effective by the SEC, the Company will also request each Person that has executed, within 12 months prior to the date of this Agreement, a confidentiality agreement in connection with such Person's consideration of a possible Acquisition Transaction or equity or debt investment in the ordinary course of business consistent with past practice, Company to return all confidential information heretofore furnished to such Person by or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness on behalf of the Company or any of its Subsidiaries;
(hs) (i) enter into Purchase or renew any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any Insurance Policies except in compliance with the provisions of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practiceSECTION 6.9 hereof; or
(ot) Take, or agree in writing or commit otherwise to do take, any of the foregoingactions described in SECTION 6.1(a) THROUGH (s) above, or any action which would cause or would be reasonably likely to cause any of the conditions to the Merger set forth in SECTIONS 7.1 OR 7.3, not to be satisfied.
Appears in 1 contract
Samples: Merger Agreement (Divine Inc)
Conduct of Business of the Company. The Company shall, Except as contemplated by this Agreement and shall cause each of its Subsidiaries tosubject to the restrictions contained in this Section 5.1 and in Section 5.12, during the period from commencing on the date of this Agreement until and ending on the earlier of Closing Date (i) or the Effective Time and (ii) the first date on which Parent this Agreement is terminated pursuant to its terms), the Seller shall have exercised rights under Section 1.03 to designate at least a majority (x) conduct the operations of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct and its business in all material respects Subsidiaries in the ordinary course of business, business consistent with past practice practice, (including with respect y) use commercially reasonable efforts to future purchase commitments for each preserve intact the business organization of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available retain the services of its the current officers and key employees of the Company and its Subsidiaries' current officers and employees, to preserve its maintain satisfactory relationships with the customers, suppliers and employees and others having business relationships with the Company and its Subsidiaries' present relationships , and goodwill with customers, suppliers, lessors, distributors, licensors, licensees to maintain all material equipment of the Company and other Persons having material business relationships with it or its Subsidiaries in good condition, excepting ordinary wear and tear, and (it being agreed z) comply in all material respects with the material terms and understood that no action by conditions of the Company or Permits and Company Material Contracts and shall maintain and renew all existing Company Permits and shall use its Subsidiaries with respect commercially reasonable efforts to matters specifically addressed by any other provision of this Section 6.01 apply for and obtain all additional Company Permits that may be necessary after the date hereof. The Seller shall be deemed to be permit a breach designee of the foregoing unless such action would constitute a breach Buyers (the "Buyer Designee") to observe all financial and operational matters of such other provision of this Agreement)the Companies and its Subsidiaries. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by provided in this Agreement or as set forth on in Section 6.01 5.1 of the Company Seller Disclosure Letter, the relevance of which disclosure prior to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawClosing Date, the Seller shall not permit the Company shall not, nor shall it permit or any of its Subsidiaries to, to take any of the following actions without the prior written consent of Parent the Buyers (which consent shall not be unreasonably withheld, conditioned or delayed):, it being understood that a material impairment of the value of the Company or its Subsidiaries, taken as a whole, resulting from or relating to the following actions will be deemed a valid reason for withholding, conditioning or delaying consent); provided, that it is understood and agreed that if no response to a request for a consent has been received within two days of communication of such request to the Buyers, then such consent shall be deemed given.
(a) amend the organizational documents or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary proportionate representation of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance board of shares directors of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors Subsidiaries;
(b) issue, sell, pledge or officersdeliver (whether through the issuance or granting of any options, warrants, calls, subscriptions, stock appreciation rights or other than increases in compensation made in the ordinary course rights or Contracts) any capital stock or any securities convertible or exchangeable into or exercisable for shares of business consistent in all material respects with past practice, or capital stock;
(c) enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund Contract or other understanding or arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000the voting or registration of any capital stock or any securities convertible or exchangeable into or exercisable for shares of capital stock;
(d) split, combine or (B) to replace existing employees whose employment has terminatedreclassify any shares of its capital stock or redeem, at compensation levels and with benefits consistent in all material respects with that purchase or otherwise acquire any shares of the employee replacedits capital stock;
(e) acquiredeclare, by merger, consolidation, acquisition pay or set aside for payment any dividend or other distribution in respect of its capital stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than between the Company or one or more and any of its Subsidiaries), or make any other payments to Seller or its Subsidiaries (excluding the Company and its Subsidiaries);
(f) increase benefits under or establish any employee benefit plan, or otherwise increase the compensation payable or to become payable to any of its respective directors, officers or employees (except for the payment of accrued or earned but unpaid bonuses described in any transaction or series Section 5.1 of transactionsSeller Disclosure Letter), in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and other than in the ordinary course of business consistent with past practice, as required by Legal Requirements or by any existing employment agreement or employee benefit plan;
(Bg) establish any key employee loans retention plan, enter into any employment or advances for travelseverance agreement with or grant any severance or termination pay to, businessany of its directors, relocation officers or employees, other reimbursable expenses made than in accordance with existing employee benefit plans or as required by applicable Legal Requirements and other than in connection with the hiring of new employees in the ordinary course of business consistent with past practice;
(fh) other than as permitted by Sections 5.1(i), enter into any new Contracts that are, individually or in the aggregate, material to the Company and its Subsidiaries taken as a whole, or terminate or make any change in any existing Contracts that are, individually or in the aggregate, material to the Company and its Subsidiaries taken as a whole;
(i) transferacquire, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale acquisition of stock equity interests or assets, or otherwise, any Person or business or division thereof or any real estate, except acquisitions by PeterStar in amounts not to exceed $2 million individually and $10 million in the aggregate which are approved by at least three quarters of the members of the board of directors of PeterStar;
(j) other than as permitted by Section 5.1(i), including the capital stock enter into any joint venture, partnership, strategic alliance, franchise or other equity interests in similar agreement;
(k) sell, lease, license, transfer, pledge, encumber or dispose of (i) any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful are, individually or in the conduct of the business of the Companyaggregate, (B) transfers among material to the Company and its SubsidiariesSubsidiaries taken as a whole, or (Cii) pursuant to existing Contracts any capital stock of PeterStar or its Subsidiaries, in each case except as contemplated by the operating budgets of PeterStar attached hereto as Exhibit A (the "Budget") and other than the disposition of used or excess equipment in the ordinary course of business consistent with past practice;
(l) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or reorganization;
(m) incur, assume or prepay any indebtedness, letters of credit, contingent or other earn-out payments, capital lease obligations, or assume, guarantee or otherwise become liable or responsible for the indebtedness, letters of credit, contingent or other earn-out payments, or capital lease obligations of any other Person, or issue or sell any debt securities or other rights to acquire any debt securities, or enter into any "keep well" or other arrangement to maintain any financial condition of another Person, other than (i) in each case in the ordinary course of business consistent with past practice (which for under the avoidance existing lines of doubt credit of the Company and without limitation to the foregoing shall be deemed to include the sale or other dispositionits Subsidiaries, including at discounted prices, of supplies and inventory), or (ii) adopt capital lease obligations set forth or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationcontemplated by the Budget and (iii) earn-out payments in connection with transactions permitted by Section 5.1(i);
(gn) repurchasemake any loans, prepay advances or incur capital contributions to, or investments in, any indebtedness for borrowed money other Person (including loans to its employees, directors or guarantee officers);
(o) change its accounting policies or procedures, other than as required by United States Generally Accepted Accounting Principles or Russian generally accepted accounting principles;
(p) incorporate, form or otherwise organize a Subsidiary or any such indebtedness of another other Person;
(q) make any capital expenditures not contemplated by the Budget;
(r) settle or compromise any material claims, issue or sell any debt securities or optionsactions, warrantsinvestigations, calls proceedings or other rights litigation (whether or not commenced prior to acquire the date of this Agreement);
(s) engage in any debt securities transaction with, or enter into any Contract or understanding with, directly or indirectly, any of the Affiliates of the Seller or its Affiliates that would be required to be disclosed under Item 404 of SEC Regulation S-K;
(t) make any payments of any liabilities of the Company or any of its Subsidiaries that are, individually or in the aggregate, material to the Company and its Subsidiaries, guarantee any debt securities of another Persontaken as a whole, before the same come due in accordance with their terms;
(u) enter into any “keep well” Contract (including any lease of real property) materially restricting the ability of the Company or any of its Subsidiaries (and after the Share Purchase, the Buyers or any of their Subsidiaries) to compete in or conduct any line of business or to engage in business in any geographic area;
(v) enter into any Contract containing any so-called "most favored nation" provisions or any similar provision requiring the Company or any of its Subsidiaries (and after the Share Purchase, the Buyers or any of their Subsidiaries) to offer a third party terms or concessions at least as favorable as offered to one or more other parties;
(w) enter into any financial derivatives master agreements, confirmation, or futures account opening agreements and/or brokerage statements evidencing financial hedging or other Contract to maintain any financial statement condition of any other Person trading activities;
(x) terminate, amend or enter into any arrangement having new leases for real property that are material to the economic effect Company and its Subsidiaries taken as a whole or Contracts with Governmental Entities that are material to the Company and its Subsidiaries taken as a whole;
(y) respond to any audit or investigation of a Governmental Entity without consulting with the Buyer Designee;
(z) terminate any material insurance policy;
(aa) cancel any debts of the foregoingsubstantial value or waive or release any claims or rights of substantial value, other than, except in each case, borrowings and repayments under the Company's existing revolving credit facility case in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (iibb) except in the ordinary course of business consistent with past practice, modifyfactor, amend discount or terminate otherwise accept less than full payment with regard to its accounts receivable and other amounts due or offer or extend any Company Material Contract special discounts or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IPterms on the sale of services;
(icc) dischargesolicit customer advances or payment of accounts receivable or other sums due in advance of their respective due dates, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside except in each case in the ordinary course of business consistent with past practice practice; or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(odd) agree or commit to do any of the foregoing.
Appears in 1 contract
Samples: Share Purchase Agreement (Metromedia International Group Inc)
Conduct of Business of the Company. The From the date hereof until the earlier of the termination hereof and the Closing Date:
(a) Seller shall procure that the Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in the usual, regular and ordinary course, en bon père de famille and in substantially the same manner as heretofore conducted (except to the extent expressly provided otherwise in this Agreement or as consented to in writing by Purchaser);
(b) Seller shall procure that the Company and each of its Subsidiaries (1) pay all material respects of its debts and Taxes when due, except to the extent such debts or Taxes are being contested in the ordinary course of businessgood faith by appropriate proceedings and for which adequate reserves according to IFRS have been established, (2) pay or perform its other obligations when due, and (3) uses commercially reasonable efforts consistent with past practice to (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closuresA) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its present business organizations, and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to (B) preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees licensees, and other Persons others having material business relationships dealings with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent)it;
(c) issue, deliver, sell, pledge, dispose of, transfer, modify Seller shall use commercially reasonable efforts to procure that the Company shall have delivered or encumber made available to Purchaser correct and complete copies of each Contract in effect between the Company and any Company Securities foreign sales agent or Company Subsidiary Securities, other than (i) foreign sales representative thereof to the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;extent such Contracts have not previously been provided to Purchaser; and
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement Seller shall procure that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any and each of its Subsidiaries to directors Subsidiaries, promptly notify Purchaser (1) of any change, occurrence or officers, other than increases in compensation made event not in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, and (2) of any change, occurrence or event which, in respect of either (1) or (C2) pursuant to existing Contracts above, individually or otherwise in the ordinary course of business consistent aggregate with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoingchanges, other thanoccurrences and events, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would could reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of have a Material Adverse Effect on the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree which is reasonably likely to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do cause any of the foregoingconditions in Article V not to be satisfied.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of (ix) the Effective Time termination of this Agreement and (iiy) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the BoardClosing, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter (unless the Company is required to take such action pursuant to this Agreement or as required by applicable Law or with the Purchaser shall give its prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct in writing) shall carry on its business in all material respects substantially in the usual, regular and ordinary course of business, substantially consistent with past practice (including practice, pay its Liabilities and Taxes consistent with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account ’s past practices, pay or perform other obligations when due consistent with the Company’s past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith and for any planned store closures) which adequate reserves have been established), and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries towith such business, use commercially reasonable best efforts to maintain and preserve substantially intact its and its Subsidiaries' present business organization, to keep available the services of its and its Subsidiaries' current present officers and employees, to key employees and preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees licensees, independent contractors and other Persons having material business relationships dealings with it or it, all with the express purpose and intent of preserving substantially unimpaired its Subsidiaries (it being agreed goodwill and understood that no action ongoing businesses at and after the Closing. Except as expressly contemplated by this Agreement, neither the Company or its Subsidiaries with respect to matters specifically addressed by nor any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries toShareholder shall, without the prior written consent of Parent (which consent shall not be unreasonably withheldthe Purchaser, conditioned take or delayed):
(a) amend agree in writing or propose otherwise to amend its take, any action that would result in the occurrence of any of the changes described in Section 2.9 or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or other action that would make any like change representations or warranties contained in this Agreement untrue or incorrect when made. Neither the Company nor any Company Securities Shareholder shall, without the prior written consent of the Purchaser, take or Company Subsidiary Securities, (ii) repurchase, redeem agree in writing or otherwise acquire, or offer to repurchase, redeem or otherwise acquiretake, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant action that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by would prevent the Company or any of its Subsidiaries to directors Shareholder from performing or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of cause the Company or any of Shareholder not to perform its Subsidiaries, guarantee agreements and covenants hereunder or knowingly cause any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment Purchaser’s closing obligations in Section 6.1 or satisfaction of such claim would Section 6.3 not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingsatisfied.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, Except as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoingSCHEDULE 5.1 hereto, between the date of this Agreement and the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to its terms, the Company shall, except to the extent that Parent shall otherwise consent in writing, (i) carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due subject to good faith disputes over such obligations, and use all reasonable efforts consistent with past practices and policies to preserve intact the Company's present business organizations, keep available the services of its present officers and employees and preserve its relationships with customers, suppliers and others having business relationships with it, to the end that the Company's goodwill and ongoing business be unimpaired at the Effective Time, except as otherwise expressly permitted by this Agreement and (ii) promptly notify Parent of any event or as set forth on Section 6.01 occurrence (A) not in the ordinary course of business of the Company Disclosure Letterwhich will have or could reasonably be expected to have a Company Material Adverse Effect or (B) that could prevent or materially delay the consummation of the transactions contemplated hereunder. In addition, between the relevance date of this Agreement and the Effective Time or the date, if any, on which disclosure this Agreement is earlier terminated pursuant to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Lawterms, the Company shall not, nor except to the extent that Parent shall it permit any of its Subsidiaries to, without the prior written otherwise consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):in writing:
(a) amend its certificate of incorporation or propose to amend its or any of its Subsidiaries' Charter Documentsby-laws;
(b) (i) adjust, split, combine, reclassify declare or make pay any like change in any Company Securities dividends or Company Subsidiary Securities, (ii) repurchasedistributions on the Company's outstanding shares of capital stock nor purchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, acquire for consideration any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary shares of the Company's capital stock or other securities except in accordance with agreements existing as of the date hereof or as permitted under the Company to its parent)Option Plan;
(c) issue or sell any shares of its capital stock, effect any stock split or otherwise change its capitalization as it exists on the date hereof, or issue, delivergrant, sellor sell any options, pledgestock appreciation or purchase rights, dispose ofwarrants, transferconversion rights or other rights, modify securities or encumber commitments obligating it to issue or sell any Company Securities shares of its capital stock, or Company Subsidiary Securitiesany securities or obligations convertible into, or exercisable or exchangeable for, any shares of its capital stock, other than (i) the issuance of shares of Company Common Stock upon pursuant to the conversion, exercise or exchange of any Company Equity Award securities therefor outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement hereof in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law borrow or required agree to borrow any funds or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practicevoluntarily incur, or enter into any new assume or amend in any material respectbecome subject to, whether directly or by way of guaranty or otherwise, any existing employment obligation or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employeesLiability, except (A) obligations incurred in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replacedpractices;
(e) acquirepay, by mergerdischarge or satisfy any claim, consolidation, acquisition of stock obligation or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, Liability in excess of $250,000 10,000 (in any one case) or $25,000 (in the aggregate), except (A) pursuant to existing Contracts that have been disclosed other than the payment, discharge or made available to Parent and satisfaction in the ordinary course of business of obligations reflected on or reserved against in the Company Balance Sheet, or incurred since the date of the Company Balance Sheet in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practicepractices;
(f) except as required by applicable law, adopt or amend in any material respect, any agreement or plan (iincluding severance arrangements) transfer, license, for the benefit of its employees;
(g) sell, leasemortgage, sublease, subject to any Lien (other than Permitted Liens) pledge or otherwise encumber or dispose of any of its assets which are material, individually or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of aggregate, to the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IPpractices;
(ih) dischargeacquire by merging or consolidating with, settleor by purchasing any equity interest in or a material portion of the assets of, compromiseany business or any corporation, assign partnership interest, association or satisfy other business organization or division thereof, or otherwise acquire any material claimassets which are material, whether individually or not pending before a Governmental Entityin the aggregate, (i) outside to the business of the Company, except in the ordinary course of business consistent with past practice practices;
(i) increase the following amounts payable or to become payable: (i) the salary of any of its directors, officers or other employees, or (ii) relating to any other compensation of its directors, officers or arising from other employees, including any securities class action claims increase in benefits under any bonus, commission, insurance, pension or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment benefit plan made for or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or with any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiumsthose persons;
(j) dispose of, permit to lapse, or otherwise fail to preserve the rights of the Company to use the Company Proprietary Rights or enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations settlement regarding the assessment breach or collection of infringement of, any federal Tax Company Proprietary Rights, or material state, local or other Tax, settle or compromise modify any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required existing rights with respect to settlement of a pending Tax claim for no more than 110% of the amountthereto, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practicepractices, and other than any such disposal, lapse, failure, settlement or modification that does not have, and could not reasonably be expected to have, a Company Material Adverse Effect;
(k) sell, or grant any right to exclusive use of, all or any part of the Company Proprietary Rights;
(l) enter into any contract or commitment or take any other action that is not in the ordinary course of its business or could reasonably be expected to have an adverse impact on the transactions contemplated hereunder or that would have or could reasonably be expected to have a Company Material Adverse Effect;
(m) amend in any material respect any agreement to which the Company is a party the amendment of which will have or could reasonably be expected to have a Company Material Adverse Effect;
(n) waive, release, transfer or permit to lapse any claims or rights (i) that has a value, or involves payment or receipt by it, of more than $25,000 or (ii) the waiver, release, transfer or lapse of which would have or could reasonably be expected to have a Company Material Adverse Effect;
(o) intentionally take any action, including the acceleration of vesting of any options or other rights to acquire shares of the capital stock of the Company, which would be reasonably likely to interfere with Parent's ability to account for the Merger as a pooling of interests under GAAP;
(p) make any change in any method of accounting or accounting practice other than changes required to be made in order that the Company's financial statements comply with GAAP; or
(oq) agree agree, whether in writing or commit otherwise, to do take any of the foregoingaction described in this Section 5.1.
Appears in 1 contract
Samples: Merger Agreement (Allaire Corp)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries toExcept as contemplated by this Agreement or the Escrow Agreement or as otherwise set forth in Schedule 7.1, during the period from the date of this Agreement until to the earlier of (i) the Effective Time Closing Date and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority termination of the Boardthis Agreement in accordance with ARTICLE 11, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with and the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), Company’s Subsidiaries shall conduct its their business in all material respects and operations in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without without limiting the generality of the foregoingforgoing:
(a) the Company and its Subsidiaries shall use commercially reasonably efforts to:
(i) operate the Company’s cash management practices in accordance with past practices, between including the date payment of this Agreement Indebtedness, collection of receivables, purchase of inventory, provision of services, payment of payables and incurrence of and payment or financing of capital expenditures, the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 maintenance of normal levels of xxxxx cash and cash held in the various accounts of the Company Disclosure Letterand its Subsidiaries;
(ii) maintain and protect all Intellectual Property Rights of the Company in accordance with past practices;
(iii) maintain the material assets of the Company in repair, order and condition consistent with past practices;
(iv) maintain the relevance books, accounts and records of which disclosure the Company in accordance with past practices;
(v) cooperate with Buyer, at Buyer’s request and expense (to the appropriate subsection extent the out-of-pocket costs thereof is more than de minimis), in this Section 6.01 is reasonably apparent on its face without addressing any chain of title issues relating to the necessity of repetitive disclosure or cross-reference, or as required Company’s Intellectual Property Rights that are identified in writing by applicable Law, the Buyer to the Company shall not, nor shall it permit any of its Subsidiaries to, prior to the date hereof; and
(b) without the prior written consent of Parent the Buyer (which consent shall not be unreasonably withheldwithheld or delayed in the case of clauses (v), conditioned or delayed):(vii), (viii) and (x) through (xv); provided, that Buyer shall respond as soon as reasonably practicable but in no event later than two Business Days following receipt of the Company’s written request for such response), shall not undertake any of the following actions:
(ai) amend issue, sell or pledge, or authorize or propose to amend its the issuance, sale or pledge of additional shares of capital stock of any class of the Company (including the Shares) or any of its the Company’s Subsidiaries' Charter Documents, or securities convertible into or exchangeable for any such shares, or any rights, warrants or options to acquire any such shares or other convertible securities of the Company or of any of the Company’s Subsidiaries;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchaseredeem, redeem purchase or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, acquire any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary outstanding shares of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance capital stock of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries the Company’s Subsidiaries; provided that nothing in this Agreement or the Escrow Agreement shall restrict the Company from declaring or paying any cash dividend or making any other cash distribution to directors the Securityholders prior to the Closing;
(iii) adopt any amendment to the Certificate of Incorporation or officers, other than increases in compensation made in By-laws of the ordinary course Company or the comparable organizational or governing documents of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or Company’s Subsidiaries;
(iiiv) hire any new employees, except (A) incur any Indebtedness other than in the ordinary course of business consistent with past practice with respect to employees with an annual base salary or (B) incur any Indebtedness that would constitute Closing Indebtedness and cannot to exceed $150,000be prepaid at Closing;
(v) (A) increase in any material manner the rate or terms of compensation or benefits of any of its employees, or (B) to replace existing employees whose employment has terminatedenter into, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock adopt or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments amend in any Person (other than the material respect any collective bargaining agreement or Company or one or more of its Subsidiaries)Plan except, in any transaction or series the case of transactions, in excess of $250,000 in the aggregate, except clauses (A) pursuant and (B), (I) to existing Contracts that have been disclosed the extent required by applicable Legal Requirement, (II) as may be required under any Company Plan or made available other agreement in effect on the date hereof or (III) other than with respect to Parent and directors or executive officers as effected in the ordinary course of business consistent with past practice, including with respect to newly hired individuals and promotions;
(A) except in the ordinary course of business consistent with past practice, sell, lease, transfer or otherwise dispose of, any of its material property or assets or (B) employee loans create any Encumbrance (other than a Permitted Encumbrance) on any material property or assets;
(vii) make any loans, advances or capital contributions other than in the ordinary course of business consistent with past practices;
(viii) enter into, materially amend or become subject to any contract that, if entered into prior to the date hereof, would be a Material Contract, other than in the ordinary course of business consistent with past practices;
(ix) acquire any business or Person, by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions;
(x) make any change in any method of accounting or auditing practice other than those required by GAAP or applicable law;
(xi) enter into any transaction with an Affiliate that would be binding after Closing;
(xii) make, terminate or modify any material election for travelpurposes of any Taxes;
(xiii) accelerate the collection of accounts receivable, business, relocation defer or delay the purchase of raw materials and/or inventories or the payment of accounts payable other reimbursable expenses made than in the ordinary course of business consistent with past practice;
(fxiv) commit to make any capital expenditures in excess of $1,000,000;
(ixv) transfer, license, sell, lease, sublease, subject settle or compromise any litigation or claim material to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect taken as a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationwhole;
(gxvi) repurchaseeffect any recapitalization, prepay redemption or incur any indebtedness for borrowed money or guarantee any such indebtedness repurchase of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities the capital stock of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(oxvii) agree or commit in writing to do take any of the foregoingforegoing actions.
Appears in 1 contract
Conduct of Business of the Company. 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 agrees to conduct its business, except to the extent that Parent shall otherwise consent in writing, which such consent shall not be unreasonably withheld, in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay the debts and Taxes of the Company when due (subject to Section 4.1(e) hereof), to pay or perform other obligations when due, and, to the extent consistent with such business, to preserve intact the present business organizations of the Company, keep available the services of the present officers and key employees of the Company and preserve the relationships of the Company with customers, suppliers, distributors, licensors, licensees, and others having business dealings with the Company, all with the goal of preserving the goodwill and ongoing businesses of the Company at the Effective Time; provided, however, that this Section 4.1 shall not prevent the Company from (i) taking any action expressly contemplated by this Agreement, or (ii) taking any action required by applicable law. The Company shallshall promptly notify Parent of any event, occurrence or emergency not in the ordinary course of business of the Company and shall cause each of its Subsidiaries to, any material event involving the Company that arises during the period from the date of this Agreement and continuing until the earlier of (i) the termination date of this Agreement or the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority Time; provided, however, that no unintentional failure of the BoardCompany to notify Parent of any such event, occurrence or emergency shall constitute a breach of the covenant contained in this sentence unless such event, occurrence or emergency, individually or in the aggregate, has caused or could reasonably be expected to cause any of the conditions to Parent’s obligations to consummate the Merger not to be satisfied. In addition to the foregoing, except as expressly permitted contemplated by this Agreement, Agreement and except as expressly set forth on in Section 6.01 to 4.1 of the Disclosure Schedule (specifying the appropriate subparagraph), the Company Disclosure Letter or as required by applicable Law or with shall not, without the prior written consent of Parent (Parent, which consent will not to be unreasonably withheldwithheld from and after the date of this Agreement:
(a) cause or permit any amendments to the certificate of incorporation, conditioned bylaws or delayed)other organizational documents of the Company;
(b) make any expenditures or enter into any commitment or transaction exceeding $25,000 individually or $50,000 in the aggregate or any commitment or transaction of the type described in Section 2.9 hereof, conduct its business in all material respects other than expenditures in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shallpractices, and shall cause each of its Subsidiaries to, use reasonable best efforts expenditures related to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent transactions contemplated hereby (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parentincluding Third Party Expenses);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoing.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, From and shall cause each of its Subsidiaries to, during the period from after the date of this Agreement until the earlier of (i) hereof through the Effective Time and (ii) the first or such earlier date on which Parent shall have exercised rights under Section 1.03 as this Agreement may be terminated pursuant to designate at least a majority of the BoardArticle VIII), except as expressly permitted by this Agreement, as set forth on Section 6.01 to 6.2 of the Company Disclosure Letter or as required expressly contemplated by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewiththis Agreement, the Company shall, and shall cause each of its Subsidiaries to, (x) conduct its operations only in the ordinary course of business consistent with past practice and with no less diligence and effort than would be applied in the absence of this Agreement and (y) use commercially reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available retain the services of its and its Subsidiaries' current executive officers and employees, to preserve the good will of its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees landlords and other Persons having with whom it has material business relationships in a manner consistent with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement)past practices. Without limiting the generality of the foregoing, between from and after the date of hereof through the Effective Time (or such earlier date as this Agreement may be terminated pursuant to Article VIII), and the Effective Time, except as otherwise expressly permitted contemplated by this Agreement or as set forth on in Section 6.01 6.2 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor and shall it not permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall be deemed to have been granted for purposes hereof to the extent that Parent shall not be unreasonably withheldhave, conditioned within three (3) Business Days following its receipt of a written request for consent from the Company under this Section 6.2, either granted or delayeddeclined to grant such requested consent):
(a) amend or propose to amend its or modify any of its Subsidiaries' Charter DocumentsCompany Organizational Document;
(b) do or effect any of the following actions with respect to the Company Securities: (i) adjust, split, combine, combine or reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchasemake, redeem declare or otherwise acquirepay any dividend (other than dividends paid by wholly-owned Subsidiaries) or distribution on, or, directly or offer to repurchaseindirectly, redeem redeem, purchase or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declaregrant any Person any right or option to acquire any Company Securities, set aside (iv) issue, deliver, pledge, dispose of or pay sell any dividend Company Securities (except pursuant to the exercise of the Options or distribution the terms of Awards outstanding on the date hereof or under the November 2004 Option) or (whether in cash, stock, property or otherwisev) in respect of, or enter into any Contract with respect to the voting ofsale, voting, registration or repurchase of any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent)Securities;
(c) issueexcept for the acceleration of the vesting or exercisability of Identified Options or Identified Awards, deliver, sell, pledge, dispose of, transferamend, modify or encumber waive any Company Securities rights under any outstanding Option or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible NotesAward;
(d) do or effect any of the matters set forth in Section 6.2(b) with respect to the Equity Interests of any of the Company’s Subsidiaries;
(ie) except as required acquire by applicable Law merging or required consolidating with, or permitted by purchasing a substantial portion of the assets, or capital stock of, or by any Company Employee Plan other manner, any business or written Contract existing prior any corporation, partnership, joint venture, association or other business organization or division thereof, other than in connection with the entry into a lease for a retail airport store in the ordinary course of business, consistent with past practice;
(f) sell, grant a license in, mortgage or otherwise encumber or subject to the date any Encumbrance or otherwise dispose of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors Owned Real Property or officers, other material properties or assets other than increases in compensation made the sale of Inventory in the ordinary course of business consistent in all material respects with past practicepractices;
(g) adopt a plan of complete or partial liquidation or dissolution;
(h) merge, consolidate, restructure, recapitalize or enter reorganize;
(i) except for Contracts entered into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000and commitments, amendments, modifications, terminations or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and waivers in the ordinary course of business consistent with past practice, not make any commitment (Bincluding any payment not expressly required thereunder) employee loans or advances for travelenter into, businessor amend, relocation modify, or other reimbursable expenses made in terminate, or waive any rights under, any Material Contract that does not relate to the ordinary course employment, compensation or severance of business consistent with past practiceany officer or director of an Acquired Company;
(fj) make any commitment with respect to, enter into, amend, modify or terminate or waive any rights under any understanding, arrangement or Contract with, or for the benefit of, any officer, director or Affiliate of an Acquired Company;
(k) (i) transfer, license, sell, lease, sublease, subject to incur or prepay any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another PersonIndebtedness, enter into any “keep well” or other Contract agreement to maintain any financial statement condition of any other another Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, except for (x) borrowings and repayments under the Existing Credit Facility line of credit that are made in the ordinary course of business consistent with past practice and that do not result in aggregate borrowings at any time outstanding in excess of $5 million or (y) letters of credit, bankers’ acceptance or similar facilities or other financing arrangements under the Existing Credit Facility relating to the purchase of Inventory in the ordinary course of business, consistent with past practice, (ii) except pursuant to the Merrimack Swap Agreement, enter into Hedge Agreement or any other off-balance sheet structure or transaction or (iii) make any loans, advances or capital contributions to, or investments in, any other Person, other than an Acquired Company's existing revolving credit facility , except in the case of (iii) investments made in connection with the entry into a lease for a retail airport store in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(hl) (i) enter into hire any new line of business or make or agree to make any new capital expenditure employee with an annual base salary in excess of $250,000 175,000, promote any employee to be an officer or thatmember of senior management, or engage any consultant or independent contractor for a period exceeding 60 days unless such engagement may be cancelled without penalty upon not more than 60 days’ notice;
(m) increase in any manner the compensation or benefits of, or pay any bonus to, any employee, officer, director or independent contractor of any Acquired Company, except for increases in the aggregateordinary course of business consistent with past practices;
(n) except as required by any applicable Law, are adopt or enter into any collective bargaining agreement or other labor union Contract applicable to the employees of any Acquired Company, or take action to terminate the employment of any employee of any Acquired Company that has an employment, severance or similar agreement or arrangement with any Acquired Company providing for the payment of any severance in excess of $500,000amounts generally provided to employees of such Acquired Company;
(o) adopt, modify or increase the benefits under, or accelerate or settle the payment of benefits under, any Company Benefit Plan, other than (A) as contemplated by modifications to the Company's capital expenditure budget, which has been provided Acquired Companies’ group health or made available to Parent, or (B) welfare plans in the ordinary course of business consistent with past practice; provided, however, that the Company may establish performance targets under the Brookstone, Inc. Management Incentive Bonus Plan, Brookstone, Inc. Profit Sharing Plan, the Brookstone 4-Wall Bonus Program, the Brookstone Merchant and Planner Bonus Programs and the Brookstone Loss Prevention Bonus Program, Director of Loss Prevention, using a methodology consistent in all material respects with the methodology historically used by the Company to establish such targets, which methodology has been described to Parent prior to the date hereof;
(iip) except make any capital expenditure, other than capital expenditures that are not, in the aggregate, for any fiscal year, more than $2.5 million in excess of the capital expenditures provided for in the Company’s budget for 2005, a correct and complete copy of which has been provided to Parent prior to the date hereof (the “2005 Budget”);
(q) make any material expenditure in connection with any advertising or marketing, or adopt, renew, terminate, change or increase the liability or other material obligations of any Acquired Company under any operating standards, loyalty programs or amenity packages, other than in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(ir) discharge, settle, compromise, assign or satisfy change any of its personnel policies in any material claimrespect or its accounting policies or procedures (including procedures with respect to payment of accounts payable), other than as required by GAAP or other applicable Laws;
(s) fundamentally alter the businesses of the Acquired Companies, or the nature and type of the products sold by the Company when compared with past practices;
(t) fail to maintain or renew its material existing insurance policies (or substantial equivalents) to the extent available at comparable rates or (ii) increase the premium on such policies or replacements thereof in excess of generally available market rates;
(u) settle or compromise any material Legal Proceedings (whether or not pending before a Governmental Entitycommenced prior to the date of this Agreement), other than settlements or compromises of Legal Proceedings which are not Transaction Related Legal Proceedings, settlements or compromises of Legal Proceedings in respect of Tax matters and the settlement of the Exempt Employee Litigation in accordance with the terms of the Exempt Employee Settlement Agreement, where the settlement (i) either (A) is limited solely to monetary payment or (B) would not reasonably be expected, individually or in the aggregate, to materially impair the business, value or operations of the Acquired Companies, taken as a whole, (ii) includes a release of all material claims that are outside of the ordinary course of business consistent with past practice or and (iiiii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered amount paid by the Company's insurance policies Company in all such settlements or compromises does not exceed any amounts reflected or reserved against in the Balance Sheet by $1.1 million in the aggregate; provided, that Parent’s consent shall not be required for the payment by the Company of the Exempt Employee Settlement Amount in settlement of the Exempt Employee Litigation (other than any applicable deductible), but only if and the discharge, settlement, compromise, assignment or satisfaction amount of such claim would Exempt Employee Settlement Amount shall not result in the imposition be counted for purposes of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(aabove);
(kv) make effectuate a “plant closing” or “mass layoff,” as those terms are defined in the WARN Act or any material change similar state Laws, affecting in whole or in part any method site of financial accounting principles employment, facility, operating unit or practices, in each case except for any such change required by a change in GAAP or applicable Lawemployee of the Acquired Companies;
(lw) makeintentionally invalidate, revoke abandon or amend dedicate to the public domain, any federal Tax election Company Intellectual Property owned or material statepurportedly owned by the Acquired Companies, local fail to respond within the applicable deadline to any U.S. Patent and Trademark Office or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement U.S. Copyright Office actions relating to federal, state, local Company Intellectual Property owned or other Taxes, file any amended federal Tax Return purportedly owned by the Acquired Companies or material state, local fail to pay maintenance or other Tax Return similar fees for Company Intellectual Property owned or claim for refund purportedly owned by the Acquired Companies so as to lead to its invalidation or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practiceabandonment; or
(ox) authorize, commit or agree or commit to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Brookstone Inc)
Conduct of Business of the Company. The Company shallExcept as contemplated or permitted by this Agreement or with the prior written consent of Parent (which consent Parent shall use its reasonable best efforts to provide or withhold within five days of the Company’s request therefor, and which consent otherwise shall cause each of its Subsidiaries tonot be unreasonably withheld, delayed or conditioned) during the period from the date of this Agreement until the earlier of Effective Time, or the date (iif any) the Effective Time and (ii) the first date on which Parent shall have exercised rights under this Agreement is terminated pursuant to Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith8.01, the Company shall, and shall cause each of its Subsidiaries to, (x) conduct its business in the ordinary course in all material respects consistent with past practice, (y) use reasonable best efforts to maintain and preserve intact its business organization and its Subsidiaries' advantageous business organization, to keep available relationships and retain the services of its and its Subsidiaries' current key officers and employees, to preserve its key employees and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that z) take no action by that is intended to or would reasonably be expected to adversely affect or materially delay the Company ability of any party to obtain any necessary approvals of any Governmental Authority required for the transactions contemplated hereby or to perform its Subsidiaries with respect covenants and agreements under this Agreement or to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of consummate the foregoing unless such action would constitute a breach of such other provision of this Agreement)transactions contemplated hereby. Without limiting the generality of the foregoing, between during the period from the date of this Agreement and to the Effective Time, except as otherwise expressly permitted by or the date (if any) on which this Agreement or is terminated pursuant to Section 8.01, except as set forth on in Section 6.01 5.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in Schedule and except as permitted by this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawAgreement, the Company shall not, nor and shall it not permit any of its Subsidiaries to, without the prior written consent of Parent (which consent Parent shall use its reasonable best efforts to provide or withhold within five days of the Company’s request therefor, and which consent otherwise shall not be unreasonably withheld, conditioned delayed or delayedconditioned):
(a) amend incur or propose to amend its assume any Indebtedness or any of its Subsidiaries' Charter Documents;
(b) (i) adjustassume, splitguarantee, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem endorse or otherwise acquirebecome liable or responsible (whether directly, contingently or offer to repurchase, redeem otherwise) for the Indebtedness or otherwise acquire, other obligations of any Company Securities other person (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parentCompany);
, or make or forgive any loan or advance to, any person (c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than a wholly owned Subsidiary of the Company), except for (i) Indebtedness in an amount that does not exceed $10,000,000 in the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its termsaggregate, (ii) the issuance of shares letters of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, credit or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as surety bonds required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable be obtained by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (Biii) employee loans $300 million of additional fleet financing incurred by Rental Car Finance Corp. and/or Dollar Thrifty Funding Corp. to be completed no later than September 30, 2010 as required under the terms of the Company’s Series 2010-1 asset backed notes, as partial replacement financing for the Company’s Series 2006-1 asset backed medium term notes that may be refinanced pursuant to clause (v)(y) below), (iv) the Canadian Fleet Securitization Program on the terms set forth in Section 5.01(a)(iv) of the Company Disclosure Schedule (the “New Canadian Facility”), and (v) fleet financing (in a principal amount not to exceed the then-outstanding principal amount of any fleet financing being replaced, modified or advances extended) incurred by any of Rental Car Finance Corp., Dollar Thrifty Automotive Group Canada Inc., DTGC Car Rental Limited Partnership, Dollar Thrifty Funding Corp. or TCL Funding Limited Partnership to replace, modify or extend (y) any fleet financing in place at such time, if such then-outstanding fleet financing would require regularly scheduled amortization payments within 180 days of the date on which such replacement, modification or extension occurs, other than the Company’s Series 2005-1 asset backed medium term notes, but including the Company’s Series 2006-1 asset backed medium term notes (the “Series 2006 Notes”) in the amount of $600 million that will require scheduled amortization payments beginning in December 2010, provided, that in the case of any such fleet financing to replace, modify or extend the Company’s Series 2006 Notes, the proceeds of such financing shall be applied to repay or repurchase outstanding Series 2006 Notes prior to the Closing Date, (z) any fleet financing under which a mandatory prepayment or rapid amortization event has occurred; provided, that the Company shall consult with Parent regarding the terms of any such fleet financing described in this clause (v) and shall use reasonable best efforts in cooperation with Parent to procure that any such fleet financing described in this clause (v) shall (1) not contain any change-in-control provision that would be triggered by the Merger or the other transactions contemplated by this Agreement, (2) not conflict with the terms of any Indebtedness of Parent or its Subsidiaries (it being understood that Parent acknowledges that the Company has no responsibility for travelknowledge of the terms of any Indebtedness of Parent or its Subsidiaries and Parent shall have sole responsibility for identifying any potentially conflicting terms) and (3) permit the use by Parent or its Subsidiaries (whether by sublease or otherwise, and as needed by Parent and its Subsidiaries in the ordinary course operation of their vehicle rental business) of vehicles owned by the Company or its Subsidiaries (terms described in clauses (1) through (3) being “Favorable Terms”); provided, relocation further, that (except in the case of a willful and material breach of the Company’s obligation to use its reasonable best efforts) no failure or inability of the Company to procure any such provisions or other reimbursable expenses provisions requested by Parent in any fleet financing shall constitute a violation or breach of this Section 5.01(a);
(b) except with respect to the Company Credit Agreement or the replacement of any fleet financing pursuant to Section 5.01(a), redeem, repurchase, defease, cancel or otherwise acquire any Indebtedness of the Company or any of its Subsidiaries (other than at stated maturity and other than the making of any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument or agreements, as the case may be, governing such Indebtedness as in effect on the date hereof);
(c) amend or modify the Medium Term Notes so as to delete or adversely affect any Favorable Terms therein;
(d) adjust, split, combine or reclassify any of its capital stock, voting securities or other equity interests;
(e) make, declare or pay any dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire (except for the acceptance or withholding of shares of Company Common Stock in payment of the exercise price or withholding Taxes incurred by any employee or director in connection with the exercise of options to acquire Company Common Stock or stock appreciation rights or the vesting of restricted shares or settlement of other equity-based awards in respect of Company Common Stock granted under a Company Benefit Plan), any shares of its capital stock, voting securities or other equity interests or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock, voting securities or other equity interests (in each case, except the Special Dividend and dividends paid by any wholly owned subsidiary to its parent);
(f) issue, sell, pledge, dispose of, grant or encumber any shares of capital stock or other securities of the Company or any of its Subsidiaries or any subscriptions, options, warrants, calls, rights, “phantom” stock rights, stock appreciation rights, stock-based performance units or other rights of any kind to acquire shares of capital stock or other securities of the Company or any of its Subsidiaries, other than (i) issuances of capital stock or other securities issuable pursuant to Company Incentive Awards granted prior to the date hereof in accordance with the terms thereof which are outstanding on the date hereof and (ii) pledges or Encumbrances of the capital stock of the Company’s Subsidiaries as required by the Company Credit Agreement;
(g) (i) except (w) as required by applicable Law, (x) for promotions or (y) normal performance-related merit increases in base salaries or base wages and benefit levels made in the ordinary course of business consistent with past practicerespect to employees (including executive officers other than those set forth in Section 5.01(g) of the Company Disclosure Schedule) or directors of any of the Company or its Subsidiaries, including in connection with performance reviews and merit increases during the Company’s third fiscal quarter (in the case of performance-related merit increases, the total amount of such increases shall not exceed, (A) with respect to employees who have entered into change-in-control agreements or arrangements or employment agreements providing for severance payments or are participants in the 2010 Retention Plan for DTG Non-Officer Management Team, $750,660 and (B) with respect to other employees, $6,434,438 or (z) as required by the terms of any Company Benefit Plan, increase the wages or salaries of any past, present or future employee of any of the Company or its Subsidiaries, or (ii) except as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement or as modified after the date hereof to the extent permitted by Section 5.01(h), pay or provide, or increase or accelerate the accrual rate, vesting or timing of payment or funding of, any other compensation, benefits or other rights of any employee of any of the Company or its Subsidiaries (including, without limitation, any new or increased incentive compensation (cash or equity) or severance entitlement);
(fh) (i) transferestablish, license, sell, lease, sublease, subject adopt or become a party to any Lien (other than Permitted Liens) new employee benefit or otherwise dispose of compensation plan, program, commitment or agreement or amend or terminate any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real EstateCompany Benefit Plan, except (A) dispositions as required by applicable Law (including any amendments to existing arrangements required to make such arrangements comply with the requirements of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct Section 409A of the business of Code so long as such amendments do not materially increase the cost to the Company, ) or the terms of any Company Benefit Plan as in effect on the date of this Agreement or (B) transfers among the Company and its Subsidiarieswith respect to employees who are not senior executives or directors, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale other than any change-in-control agreements or other disposition, including at discounted prices, of supplies and inventoryarrangements), or (ii) establish, adopt or effect become a plan party to any new, or amend or terminate any existing, change-in-control agreement or arrangement with any employee of complete the Company or partial liquidation, dissolution, restructuring, recapitalization its Subsidiaries or other reorganization(iii) enter into any collective bargaining agreement without providing Parent prior written notice and the opportunity to review and comment on the terms of such agreement;
(gi) repurchase(i) sell, prepay transfer, license, lease, mortgage, encumber or incur otherwise dispose of any indebtedness for borrowed money properties or guarantee assets to any such indebtedness of another Personperson, issue or sell any debt securities or optionsother than (v) sales, warrantstransfers, calls licenses, leases, mortgages, Encumbrances or other rights disposals to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities (w) sales, transfers, licenses, leases, mortgages, encumbrances or disposals of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) vehicles in the ordinary course of business consistent with past practice, (x) with respect to mortgages and encumbrances, Permitted Encumbrances, (y) leases of real property in the ordinary course of business consistent with past practice and (z) sales of properties or assets with a sale price that does not exceed $1,000,000 individually or $5,000,000 in the aggregate, or (ii) cancel, release or assign any claims against any person that exceed $1,000,000 individually or $5,000,000 in the aggregate;
(j) enter into any new line of business or, except as required by changes in applicable Law, regulation or policies imposed by any Governmental Authority or changes made in response to market conditions, change in any material respect its current operating policies;
(k) make any investment (whether by merger, consolidation, acquisition of stock or assets, joint venture or otherwise) either by purchase of stock or securities, contributions to capital or purchase of any division or business or all or any significant portion of the property or assets of any person (other than acquisitions of the stock, securities, properties or assets not in excess of $2,000,000 individually or $6,000,000 in the aggregate or of a wholly owned Subsidiary of the Company in the ordinary course of business consistent with past practice);
(l) commence or settle any action, lawsuit or proceeding, other than (i) the commencement of any such proceedings in the ordinary course of business, (ii) the settlement of automobile accident liability claims incurred in the ordinary course of business and that have not had and are not reasonably expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, and (iii) the settlement of any such proceedings or claims (x) for monetary payment of less than $5,000,000 individually and $10,000,000 in the aggregate and (y) which settlement does not impose any material restriction or obligation on the Company or any of its Affiliates (including, after the Closing, Parent and its Affiliates);
(m) amend its certificate of incorporation, bylaws or other similar governing documents;
(n) except for (i) the Company Credit Agreement and (ii) with respect to any agreement, contract, lease, license, arrangement or commitment that (A) is entered into on an arm’s length basis with an unaffiliated third party, (B) is entered into in the ordinary course of business consistent with past practice, modify(C) would not purport on its face to bind Parent and its Subsidiaries (other than the Company and its Subsidiaries) following the Closing Date and (D) with respect to any new vehicle purchase Contract, does not have a term exceeding one year, unless such Contract may be terminated at any time after one year without payment of penalty or premium, enter into, assume or amend in any material respect, or terminate grant any release or relinquish any material rights under, any Company Material Contract Contract, or waiveany other agreement, release contract, lease, license, arrangement or assign any material rights or claims thereunder or (iii) dispose ofcommitment that, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except if entered into prior to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim date hereof would not result in the imposition of any material restriction on the business or operations of the constitute a Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiumsMaterial Contract;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any extend the term of the foregoing.Second Amended and Restated Data Processing Services Agreement, dated as of August 1, 2006, by and among the Company, Electronic Data Systems Corporation and EDS Information Services
Appears in 1 contract
Conduct of Business of the Company. The During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Effective Time, the Company shall, except to the extent that Parent shall otherwise consent in writing, carry on its business in the usual, regular and shall cause each ordinary course in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations, pay its liabilities and Taxes when due (subject to good faith disputes over such liabilities or Taxes), pay or perform other obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve intact its present business organization, (ii) keep available the services of its Subsidiaries topresent Employees, (iii) preserve its relationships with customers (including the Significant Customers), suppliers (including the Significant Suppliers), distributors, consultants, licensors, licensees and others with which it has significant business dealings and (iv) conduct its working capital and cash management practices, the collection of Receivables, the payment of accounts payable (including the writing and mailing of checks with respect thereto). In addition, the Company shall promptly notify Parent of any material event involving its business or operations occurring outside the ordinary course of business. In addition, without the prior written consent of Parent, except as permitted or required by this Agreement and except as provided in Section 5.1 of the Disclosure Schedule, during the period from the date of this Agreement and continuing until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date termination of this Agreement and pursuant to its terms or the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit not do any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):following:
(a) amend cause, permit or propose submit to amend its a vote of the Company Stockholders any amendments to the Certificate of Incorporation (or similar governing instruments of any of its Subsidiaries' Charter Documents);
(b) (i) adjust, split, combine, reclassify acquire or make any like change in any Company Securities agree to acquire by merging or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquireconsolidating with, or offer to repurchase, redeem by purchasing any equity interest in or otherwise acquire, any Company Securities (other than a portion of the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect 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 enter into any Contract with respect to the voting ofjoint ventures, any Company Securities strategic partnerships or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent)similar alliances;
(c) issue, deliver, sell, pledgeauthorize or designate (including by certificate of designation) or pledge or otherwise encumber, dispose ofor propose any of the foregoing with respect to any shares of Company Capital Stock or the capital stock of its Subsidiaries or any securities convertible into shares of Company Capital Stock or the capital stock of its Subsidiaries, transferor subscriptions, modify rights, warrants or encumber options to acquire any shares of Company Securities Capital Stock or the capital stock of its Subsidiaries or any securities convertible into shares of Company Subsidiary SecuritiesCapital Stock or the capital stock of its Subsidiaries, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (i) the issuance issuance, delivery and/or sale of shares of Company IM Common Stock, MW Common Stock, Series B-1 Preferred Stock, Series C Preferred Stock upon or Series C-1 Preferred Stock, as applicable, pursuant to the exercise of any Company Equity Award Options or Company Warrants outstanding as of the date of this Agreement in accordance with its terms, (ii) which are either vested on the issuance date of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of this Agreement or vest after the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of terms on the date of this Agreement, or (iv) in each case as disclosed on the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) Disclosure Schedule; provided, however, that (i) except as required by applicable Law or required or permitted by any the Company Employee Plan or written Contract existing prior shall be entitled to grant Company Options to recently hired Employees in accordance with Section 5.1(c)(i) of the Disclosure Schedule and, (ii) the Company shall be entitled to continue to grant Company Options to Employees hired after the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects accordance with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) hereof in the ordinary course of business consistent with past practice with respect the guidelines set forth in Section 5.1(c)(ii) of the Disclosure Schedule, so long as such grants do not exceed 310,000 units, each consisting of one share of IM Common Stock and MW Common Stock; provided, further, that all such Company Options may not be granted prior to employees with an annual base salary not three (3) Business Days before the Closing Date and shall be issued at the higher of fair market value on the date of grant and the IM Common Per Share Consideration and the MW Common Per Share Consideration (based on the Estimated Working Capital and Estimated Long-Term Debt Balance); and provided, further, that any such grant of Company Options pursuant to exceed $150,000, or clause (Bii) of this Section 5.1(c) to replace existing employees whose employment has terminatedany Employee at or above the level of director shall require the prior written approval of Parent;
(d) declare, at compensation levels and with benefits consistent set aside or pay any dividends on or make any other distributions (whether in all material respects with that cash, securities or property) in respect of any Company Capital Stock or the employee replacedcapital stock of its Subsidiaries or split, combine or reclassify any Company Capital Stock or the capital stock of its Subsidiaries or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any Company Capital Stock or the capital stock of its Subsidiaries;
(e) purchase, redeem or otherwise acquire, by mergerdirectly or indirectly, consolidationany shares of Company Capital Stock or the capital stock of its Subsidiaries or any other securities of the Company or its Subsidiaries or any options, acquisition warrants, calls or rights to acquire any such shares or other securities, except repurchases of unvested shares at or below cost in connection with the termination of the employment relationship with any employee pursuant to stock option or assetspurchase agreements in effect on the date of this Agreement, provided that no such repurchase shall be permitted in the event the per share repurchase price is greater than the Merger Consideration;
(f) waive any stock repurchase rights, release any Unvested Shares from any escrow arrangement or waive any rights to hold such shares in an escrow arrangement, accelerate, amend or change the period of exercisability of options or restricted stock, or otherwisereprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans; provided, however, that the Company shall be permitted to amend the Plans or any Company Option as necessary in order to implement any acceleration of vesting required to effect the provision of the proviso to the first sentence of Section 2.7(a) with respect to Company Options held by a Company director;
(g) grant or pay any severance or termination pay or any bonus or other special remuneration (whether in cash, securities or property) or any increase thereof to any Employee except as disclosed on Section 5.1(g) of the Disclosure Schedule, adopt any new severance plan, or invest in, any business amend or Person modify or division thereof or make any loans, advances or capital contributions to or investments alter in any Person manner any severance plan, agreement or arrangement existing on the date of this Agreement (including without limitation any retention, change of control or similar agreement), grant any equity-based compensation, whether payable in cash, securities or property, or enter into any agreement the benefits of which are contingent or the terms of which are materially altered upon the occurrence of a transaction involving the Company of the nature contemplated hereby;
(h) grant any loans or advances to Employees (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and advances for travel expenses in the ordinary course of business consistent with past practice, (Bbusiness) employee loans or advances for travel, business, relocation or other reimbursable expenses made third parties, make any investments in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject or capital contributions to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of mergerperson, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Personperson, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another PersonCompany, enter into any “keep well” or other Contract agreement to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoingforegoing other than in connection with the financing of ordinary course trade payables consistent with past practice;
(i) (i) increase the compensation or benefits payable or to become payable to Employees (other than pursuant to existing agreements disclosed on Section 5.1(i)(x) of the Disclosure Schedule), (ii) enter into any new or amend any existing Company Employee Plan, Employee Agreement, indemnification, collective bargaining, or similar agreement, except as required by applicable law, (iii) hire any Employee at or above the level of director, (iv) hire any Employee below the level of director, other than, in each casethe case of this clause (iv) in the ordinary course of business, borrowings and repayments under consistent with its past practices to fill the Company's existing revolving credit facility position of any Employee whose employment with the Company terminated after the date of this Agreement, or in accordance with planned hiring as set forth in Section 5.1(i)(y) of the Disclosure Schedule, (v) terminate any Employee at or above the level of director, or (vi) demote, relocate or reduce the compensation of any Employee at or above the level of director or take any other action that constitutes “good reason” or a material violation of any Employment Agreement with any such Employee;
(j) pay, discharge, settle or satisfy any liabilities, other than the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms of liabilities recognized or disclosed in the Balance Sheet or incurred since the Balance Sheet Date in the ordinary course of business consistent with past practices;
(k) waive the benefits of, agree to modify in any manner, terminate, release any person from or knowingly fail to enforce the confidentiality or nondisclosure provisions of any Contract to which the Company is a party or of which the Company is a beneficiary;
(l) sell, lease, license, encumber or otherwise dispose of any properties or assets except for non-exclusive end user licenses in the ordinary course of business consistent with past practice, and except for the sale, lease, licensing, encumbering or take any action (other than disposition of property or assets not in excess of $100,000 individually or $300,000 in the entry into this Agreement and aggregate, provided such property or assets are not material, individually or in the other Company Transaction Documents) that would reasonably be expected aggregate, to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness the business of the Company or any of its SubsidiariesCompany;
(hm) commit to make following the Closing any capital expenditures in excess of $200,000 individually or $500,000 in the aggregate;
(n) fail to take any necessary actions, including the payment of any registration, maintenance or renewal fees or the filing of any responses to PTO office actions, documents, applications or certificates for the purposes of obtaining, maintaining, perfecting or preserving or renewing any Registered Intellectual Property Rights;
(o) enter into (unless otherwise permitted by this Section 5.1, any contract of a nature required to be listed in Sections 3.20(a)(ii), (v), (vi), (vii), (viii), (ix) (iexcept in the ordinary course of business), or (xvii)-(xxii) of the Disclosure Schedule), or modify or amend (unless such amendment, if it were a new Contract, would be otherwise permitted by this Section 5.1), or terminate any Contract listed in Section 3.20(a)(iii) of the Disclosure Schedule or waive, delay the exercise of, release or assign any material rights or claims thereunder;
(p) enter into any new material line of business business;
(q) except as required by GAAP, revalue any of its assets (including without limitation writing down the value of inventory or make writing off notes or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, Receivables other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice) or make any change in accounting methods, (ii) except in the ordinary course of business consistent with past practice, modify, amend principles or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IPpractices;
(ir) dischargecancel or fail to renew, settlewithout reasonable substitutes, compromiseany insurance policy naming the Company as a beneficiary or loss payee;
(s) make any Tax election or accounting method change (except as required by GAAP) that, assign individually or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on aggregate, is reasonably likely to materially and adversely affect the business Tax liability or operations Tax attributes of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refundSubsidiaries, settle or compromise any material state, local or other Tax liability or refund, file any amendment to a Tax Return, enter into any material closing agreement relating or consent to federal, state, local any extension or other Taxes, file waiver of any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required limitation period with respect to settlement of a pending Tax claim for no more than 110% Taxes;
(t) engage in any action with the intent to, directly or indirectly, adversely impact or materially delay the consummation of the amountTransactions;
(u) make or commit to make any individual or series of related payments outside of the ordinary course of business in excess of $200,000 in the aggregate, other than the payment of Third Party Expenses or as of otherwise provided in this Section 5.1;
(v) commence or settle any pending or threatened litigation, proceeding or investigation (whether or not commenced prior to the date of this Agreement) (other than any litigation to enforce any of its rights under the Agreement), other than the settlement of any litigation, proceeding or investigation existing on the FIN 48 reserves applicable date of this Agreement for amounts not to that claim;exceed $100,000 in each instance; and
(mw) acquire take, or materially alter any Owned Real Estate agree in writing or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit otherwise to do take, any of the foregoingactions described in Section 5.1(a) through 5.1(v), or any other action that would (x) prevent the Company from performing, or cause the Company not to perform, its covenants hereunder or (y) cause or result in any of its representations and warranties contained herein being untrue or incorrect.
Appears in 1 contract
Samples: Merger Agreement (Sybase Inc)
Conduct of Business of the Company. The Company shall, Except as expressly permitted by this Agreement or as Parent may otherwise consent to or approve in writing on and shall cause each of its Subsidiaries toafter the date hereof and prior to the Closing Date, during the period from the date of this Agreement until the earlier of (i) to the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the BoardTime, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct and its business in all material respects Subsidiaries shall operate in the ordinary course Ordinary Course of business, consistent Business and in compliance with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) all applicable Laws and regulations and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use all commercially reasonable best efforts to maintain and preserve intact its and its Subsidiaries' current business organization, to keep available the services of its and its Subsidiaries' current officers and other employees, to manage prudently its cash, and to preserve its relationships with those persons having business dealings with it, including vendors and its Subsidiaries' present relationships and goodwill with customers, suppliersto the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Furthermore, lessorsthe Company covenants, distributorsrepresents and warrants that from and after the date hereof, licensorsunless Parent shall otherwise expressly consent in writing, licensees the Company and each of its Subsidiaries shall use all commercially reasonable efforts to: (i) keep in full force and effect insurance comparable in amount and scope of coverage to insurance now carried by it, (ii) pay all accounts payable and other Persons having material business relationships obligations, when they become due and payable, in the Ordinary Course of Business consistent with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision provisions of this Agreement), except if the same are contested in good faith, and, in the case of the failure to pay any material accounts payable or other obligations which are contested in good faith, only after consultation with Parent and (iii) generate accounts receivable only in the Ordinary Course of Business. Without limiting the generality of the foregoingforegoing (but subject to the above exceptions), between during the period from the date of this Agreement and to the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of neither the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):shall:
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend dividends on, or distribution (whether in cash, stock, property or otherwise) make any other distributions in respect of, any of its Shares or enter into any Contract with other equity interests, except distributions in the Ordinary Course of Business for payment of Taxes imposed on Shareholders as a result of their respective allocation of income from the Company, (ii) split, combine or reclassify any of its Shares or any other equity interests or issue or authorize the issuance of any other securities in respect to the voting of, in lieu of or in substitution for any Company Securities of its Shares or Company Subsidiary Securities (any other than dividends from a direct or indirect wholly owned Subsidiary equity interests, except for issuances of capital stock upon the exercise of options outstanding as of the Company date hereof in accordance with their present terms, (iii) purchase, redeem or otherwise acquire any Shares or any other securities thereof or any rights, warrants or options to its parent)acquire any such shares or other securities or (iv) make any other actual, constructive or deemed distribution in respect of any Shares or other equity interests or otherwise make any payments to Shareholders in their capacity as such;
(cb) issue, deliver, sell, pledgepledge or otherwise encumber or subject to any Lien any Shares, dispose of, transfer, modify any other voting securities or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of interests or any Warrant that is outstanding as of the date of this Agreementsecurities convertible into, or any rights, warrants or options to acquire, any such Shares, voting securities or other equity interests or convertible securities;
(ivc) the issuance amend its articles of shares of Company Common Stock upon the conversion of Convertible Notesincorporation or bylaws or organizational documents;
(d) (i) except as required acquire or agree to acquire by applicable Law merging or required consolidating with, or permitted by purchasing a substantial portion of the stock or assets of, or by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parentother manner, increase the compensation payable or that could become payable by the Company any business or any of its Subsidiaries to directors or officersPerson and, other than increases in compensation made in without limiting the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as generality of the date of this Agreementforegoing, or make shall not create any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that Subsidiary of the employee replacedCompany;
(e) acquiresell, by mergerlease, consolidationlicense, acquisition mortgage or otherwise encumber or subject to any Lien or otherwise dispose of stock or assetsany of the Property (including securitizations), other than in the Ordinary Course of Business;
(f) incur any Indebtedness for borrowed money, other than drawing upon the credit facility in the Ordinary Course of Business, in an amount that exceeds $250,000 in the aggregate, or otherwiseissue any debt securities, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to to, or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Companyin, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationPerson;
(g) repurchaseassume, prepay guarantee or incur endorse the obligations of any indebtedness other Person, indemnify any other person, issue any support guarantees or otherwise become responsible for borrowed money the obligations of any Person;
(h) take, or guarantee agree to commit to take, any action that would or is reasonably likely to result in any of the conditions to the Merger not being satisfied, or that would impair the ability of any of the Parties to consummate the Merger in accordance with the terms hereof or delay such consummation;
(i) make any capital expenditure or expenditures that exceed $100,000 individually or $200,000 in the aggregate;
(j) write-off as uncollectible, discount or establish any extraordinary reserve with respect to, or accelerate the collection of, any Account Receivable or other receivable, delay the payment of accounts payable or defer expenses, reduce inventories or otherwise increase Cash on hand, in each case except in the Ordinary Course of Business;
(k) (i) make or change any Tax election, (ii) adopt any accounting method that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods, (iii) file any amended Tax Returns (except as disclosed in Section 2.8 of the Disclosure Schedule) or claims for Tax refunds, (iv) enter into any closing agreement related to any Tax, (v) surrender any Tax claim, audit or assessment, (vi) surrender any right to claim a Tax refund, offset or other reduction in Tax liability surrendered, (vii) consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment, (viii) settle, compromise or resolve any Tax controversy, or (ix) take or omit to take any other action, if any such indebtedness action or omission would have the effect of another Person, issue materially increasing the Tax liability or sell reducing any debt securities or options, warrants, calls or other rights to acquire any debt securities Tax asset of the Company or any Subsidiary;
(l) except as required under an existing Plan, (i) grant or commit to grant any employee, Shareholder, officer, director or agent any increase in wages, bonus, severance, profit sharing, retirement, insurance or other compensation or benefits (other than an increase in wages in the Ordinary Course of its SubsidiariesBusiness for any individual other than a director or officer of the Company), guarantee (ii) amend or terminate any debt securities of another PersonPlan, except to the extent necessary to comply with applicable Law, (iii) establish any new compensation or benefit plan or arrangement, or (iv) enter into any “keep well” employment, consulting, retention, termination, severance or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practicecollective bargaining agreement;
(m) take, or take agree to commit to take, any action (other than the entry into this Agreement and the other Company Transaction Documents) that would or is reasonably be expected likely to result in the acceleration of vesting or a right to exercise any material amendmentoptions or warrants, modification unless Parent directs or adverse change consents to any term of, or material default under, any material indebtedness of the Company or such action;
(n) revalue any of its Subsidiariesassets, 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 as required by GAAP;
(ho) (i) enter into any new contract or agreement, other than in the Ordinary Course of Business, or amend in any material respect any of the Contracts other than in the Ordinary Course of Business, or (ii) enter into any contract, agreement, commitment or arrangement providing for, or amend any contract, agreement, commitment or arrangement to provide for, the taking of any action that would be prohibited hereunder;
(p) 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 Business of liabilities reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course of Business since the date of the Balance Sheet;
(q) settle or compromise any pending or threatened suit, action or claim relating to the transactions contemplated hereby;
(r) enter into any agreement or arrangement that would limit or restrict the Surviving Company and its Affiliates (including Parent) or any successor thereto, from engaging or competing in any line of business or make or agree to make in any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IPgeographic area;
(is) dischargeenter into, settle, compromise, assign terminate or satisfy amend in any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into respect any Contract of a type referenced in clause (ii), (iii), (iv), (vlisted on Schedule 2.12(a) or (viii) of Section 4.13(aSchedule 2.14(c);
(kt) sell, transfer or grant any license with respect to Intellectual Property of the Company other than non-exclusive licenses granted in the Ordinary Course of Business, or fail to make any filing, pay any fee or take any other action necessary to maintain the existence, validity and ownership by the Company of any material change in any method of financial accounting principles or practices, in each case except for any such change required Intellectual Property owned by a change in GAAP or applicable Lawthe Company;
(lu) makefail to pay any fee, revoke make any filing or amend take any federal Tax election action necessary to maintain the ownership or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating right to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund use or otherwise make a exploit any Intellectual Property that is material change in to the Tax compliance practices business of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(mv) acquire fail to maintain, abandon, or materially alter lose the right to use or otherwise exploit any Owned Real Estate or any Ground Leased Real EstateIntellectual Property material to the business of the Company;
(nw) enter into take any Store Leases other than of the actions described in the ordinary course of business consistent in all material respects with past practiceSection 2.17; or
(ox) agree authorize, or commit or agree to do take, any of the foregoingforegoing actions.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Ixia)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date termination of this Agreement and the Effective Time, the Company agrees (except as otherwise expressly permitted contemplated by this Agreement or to the extent that the Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld) to carry on its business in the usual, regular and ordinary course in substantially the same manner as set forth on Section 6.01 heretofore conducted, to pay its debts and Taxes when due, to pay or perform other obligations when due, and, to the extent consistent with such business, to use all reasonable efforts consistent with past practice and policies to preserve intact its present business organization, keep available the services of its present officers and key employees and preserve their relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, all with the goal of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. Following the date of this Agreement, the Company Disclosure Lettershall promptly notify the Parent of any material event or occurrence or emergency not in the ordinary course of its business, and any event involving or adversely affecting the relevance of which disclosure to the appropriate subsection in Parent or its business. Except as expressly contemplated by this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawAgreement, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (the Parent, which consent shall not be unreasonably withheld, conditioned or delayed)::
(a) amend Enter into any material commitment or propose to amend its or any transaction not in the ordinary course of its Subsidiaries' Charter Documentsbusiness;
(b) (i) adjust, split, combine, reclassify Transfer to any person or make entity any like change in any material rights to the Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities Intellectual Property Rights (other than pursuant to end-user licenses in the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary ordinary course of the Company to its parentbusiness);
(c) issueEnter into any material agreements (or material amendments thereto) pursuant to which any other party is granted marketing, deliver, sell, pledge, dispose of, transfer, modify distribution or encumber similar rights of any type or scope with respect to any products of the Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replacedpractices;
(ed) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) Amend or otherwise dispose of any assets or properties modify (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or thatdo so), in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practicebusiness, modifyor knowingly violate any terms, amend which would be reasonably likely to create a material liability, in any of the agreements set forth or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IPdescribed in the Schedules referenced in Article II;
(ie) dischargeCommence any litigation;
(f) Declare, settleset aside or pay any dividends on or make any other distributions (whether in cash, compromise, assign stock or satisfy any material claim, whether or not pending before a Governmental Entity, (iproperty) outside the ordinary course in respect of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries capital stock, or Affiliates split, combine or a material increase reclassify any of its capital stock or issue or authorize the issuance of any other securities in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practicesrespect of, in each case except lieu of or in substitution for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method shares of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices capital stock of the Company, except that no consent shall be required with respect or repurchase, redeem or otherwise acquire, directly or indirectly, any shares of its capital stock (or options, warrants or other rights exercisable therefor); AGREEMENT AND PLAN OF REORGANIZATION PAGE 37 42 (g) Issue, grant, deliver or sell or authorize or propose the issuance, grant, delivery or sale of, or purchase or propose the purchase of, any shares of its capital stock or securities convertible into, or subscriptions, rights, warrants or options to settlement acquire, or other agreements or commitments of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable any character obligating it to that claimissue any such shares or other convertible securities;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoing.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Electronic Transmission Corp /De/)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Closing Date, the Principal Shareholders shall cause or procure the Company (except to the extent expressly contemplated by this Agreement or as consented to in writing by Offeror), to carry on its and its Subsidiaries' business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay and to cause its Subsidiaries to pay debts and Taxes when due subject (i) the Effective Time to good faith disputes over such debts or Taxes and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 Offeror's consent to the Company Disclosure Letter filing of material tax returns if applicable, to pay or as required by applicable Law or with the prior written consent of Parent (not perform other obligations when due, and to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, use best efforts consistent with past practice (including with respect and policies to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' present business organization, to keep available the services of its and its Subsidiaries' current present officers and employees, to key employees and preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees licensees, and other Persons others having material business relationships dealings with it or its Subsidiaries (it being agreed Subsidiaries, to the end that its and understood that no action by its Subsidiaries' goodwill and ongoing businesses shall be unimpaired at the Closing Date. The Principal Shareholders shall cause or procure the Company to promptly notify Offeror of any event or occurrence not in the ordinary course of its or its Subsidiaries with respect to matters specifically addressed by Subsidiaries' business, and of any other provision of this Section 6.01 shall be deemed to be event which could have a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement)Material Adverse Effect. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, the Principal Shareholders shall cause or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by procure the Company or any of its Subsidiaries to directors not do, allow or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with permit any of its past or present officersthc following, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as without the prior written consent of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoing.Offeror:
Appears in 1 contract
Conduct of Business of the Company. The During the period from the date of this Agreement until the earlier of the Closing Date and the valid termination of this Agreement, except as expressly required or contemplated by this Agreement or applicable Law, as consented to in writing by Purchaser or as set forth in Section 5.4 of the Company Disclosure Schedule, the Company shall, and shall cause each the other Transferred Entities to, (i) use commercially reasonable efforts to conduct its business in the ordinary course of business consistent with past practice in all material respects, including to maintain its Subsidiaries toongoing Capital Expenditures program in all material respects and (ii) use commercially reasonable efforts to preserve intact in all material respects its business and existing personal properties in the ordinary course of business consistent with past practice and to maintain its existing relationships and goodwill with Governmental Entities, customers, suppliers, vendors, creditors, employees, business partners, prospects and agents; provided that no action by any Transferred Entity with respect to matters addressed by any of the following provisions of this Section 5.4 shall be deemed a breach of this sentence unless such action would constitute a breach of one or more of such provisions, and provided, further that the foregoing notwithstanding, the Company and the other Transferred Entities may use cash or cash equivalents to make or pay distributions or dividends on or prior to the Closing. Without limiting the foregoing, during the period from the date of this Agreement until the earlier of (i) the Effective Time Closing Date and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority valid termination of the Boardthis Agreement, except as expressly contemplated or permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as may be required by applicable Law or with the prior written Law, as consented to in writing by Purchaser (such consent of Parent (not to be unreasonably withheld, conditioned or delayeddelayed in the case of Sections 5.4(d), conduct its business in all material respects in the ordinary course of business(i), consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closuresj), (k), (l), (m) and, and (o) and (p) (as it relates to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement clauses) only below) or as set forth on in Section 6.01 5.4 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawSchedule, the Company shall not, nor and shall it permit any of its Subsidiaries cause the other Transferred Entities not to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed)::
(a) (i) amend or propose to amend its or the organizational documents of any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify the Transferred Entities except as otherwise required by applicable Law; or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any non-cash dividend or non-cash distribution to any Person other than a Transferred Entity or redeem or repurchase any equity interest of any Transferred Entity from any stockholder or member of any Transferred Entity;
(whether in cashb) issue, stocksell, property pledge, repurchase or otherwisedispose of, any additional equity interests of any of the Transferred Entities, or any options, warrants or rights of any kind to acquire any membership interests which are convertible into or exchangeable for such membership interests, except for transactions between the Transferred Entities;
(c) in respect ofincur, assume, guarantee, issue or otherwise become liable for any Covered Indebtedness or any debt securities or warrants or other rights to acquire any debt securities of the Transferred Entities, or enter into any Contract with respect Credit Support Arrangements, in each case, in an aggregate amount in excess of $5,000,000; provided that any indebtedness, debt securities or Credit Support Agreements incurred, assumed, guaranteed, issued or entered into pursuant to this Section 5.4(c) shall be repaid, redeemed, discharged or terminated (including satisfaction of all associated repayment costs and expenses), as applicable, prior to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible NotesClosing;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement intercompany loan or any plan, agreement, program, policy, trust, fund or other intercompany debt arrangement that would be a Company Employee Plan if it were in existence as of will remain outstanding after the date of this AgreementClosing, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries)or, in any transaction either case, modify or series of transactionsotherwise increase or decrease the balances thereof to the extent such balance will remain outstanding following the Closing, except, in excess of $250,000 in the aggregateeach case, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(fe) make any acquisition (iby merger, consolidation or the purchase of substantially all of the assets of or equity interests) transferof any Person, licensebusiness or assets for consideration in excess of $15,000,000, sell, lease, sublease, subject to any Lien (other than Permitted Liens) supplies or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise inventory in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationbusiness;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (if) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of outside its existing business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(mg) acquire sell, lease, transfer, dispose of or materially alter any Owned Real Estate or any Ground Leased Real Estate;
encumber (n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(oPermitted Liens) agree or commit to do any assets of the foregoing.Transferred Entities (including the capital stock of Subsidiaries of the
Appears in 1 contract
Conduct of Business of the Company. The Company shallExcept to the extent expressly required or permitted by this Agreement, and shall cause each as required by applicable Law or as set forth in Section 5.01 of its Subsidiaries tothe Disclosure Letter, during the period from the date of this Agreement until the earlier of the Effective Time or the date on which this Agreement is terminated pursuant to Section 7.01 (the “Interim Period”), (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority each of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 Seahorse Parties will conduct and will cause each of its Subsidiaries to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business and operations in all material respects in the ordinary course of business, business consistent with past practice and (including with respect to future purchase commitments for ii) each of the Company's brands; provided that such future purchase commitments Seahorse Parties will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, use and shall will cause each of its Subsidiaries to, to use its commercially reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, and to preserve its the goodwill of and its Subsidiaries' present maintain satisfactory relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other those Persons having material business relationships with it the Seahorse Parties or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement)their Subsidiaries. Without limiting the generality of the foregoingforegoing and except to the extent otherwise expressly required or permitted by this Agreement, between as required by applicable Law or as set forth on Section 5.01 of the Disclosure Letter, during the Interim Period, unless Parent otherwise consents (which consent, other than with respect to Sections 5.01(e), 5.01(f), 5.01(h) or 5.01(m) shall not be unreasonably withheld or delayed; provided, that the parties agree that in the event that the lenders under the Debt Financing Commitments do not provide their consent or otherwise object to any particular request, Parent’s withholding or delaying of its consent shall be deemed to be reasonable; provided, further, that Parent shall request that the lenders provide their consent to such action or inaction and provide them with any information that the Company requests be provided), each of the Seahorse Parties will not and will not permit any of their Subsidiaries to:
(a) issue, sell, grant or pledge, or authorize or propose the issuance, sale, grant or pledge of, any Company Securities or Subsidiary Securities, or pay or make any commitment to pay any amounts directly or indirectly based (in whole or in part) on the price or value of LP Units, Depositary Units or other equity interests in the Seahorse Parties or any of their Subsidiaries other than for the issuance of LP Units and/or Depositary Units pursuant to the exercise of Options or the settlement of Phantom Units that are outstanding as of the date of this Agreement and in accordance with the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documentsexisting terms thereof;
(b) acquire or redeem, directly or indirectly, or amend the terms of any Company Securities or Subsidiary Securities except in connection with the use of LP Units and/or Depositary Units to pay the exercise price or Tax withholding obligation upon the exercise of an Option as presently permitted under any Option Plan of the Company;
(ic) adjust, split, combine, redenominate or reclassify any LP Units, Depositary Units or make any like change in any Company Securities other equity interests or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside aside, make or pay any dividend or distribution (whether in cash, stock, units, partnership interests, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, on any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except engage in or offer to make (including the granting of any option, right of first negotiation, right of first refusal or exclusivity) (collectively, “Offer”) any acquisition, by means of a merger or otherwise, of any business, assets or securities or any sale, lease, encumbrance or other disposition of assets or securities, in each case involving the payment or receipt of consideration of $50,000 or more individually (or payments in excess of $500,000 for all such acquisitions in the aggregate or receipt of consideration in excess of $500,000 for all such sales, leases, encumbrances and other dispositions in the aggregate), or enter into or engage in any Offer with respect to any lease, license or other occupancy or use agreement with respect to any real property providing for annual payments in excess of $50,000 individually or $500,000 in the aggregate, or, in each case, having a term in excess of one year, or (ii) enter into a contract that would be a Material Contract (if it existed as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to of the date hereof) or amend, renew, extend or terminate any Material Contract or grant any release or relinquishment of this any material rights under any Material Contract;
(e) except for borrowings under the Company’s existing Credit Agreement that has been disclosed in the ordinary course of business and consistent with past practice (including in terms both of timing and amounts), incur, create, assume or made available to Parentotherwise become liable for or repay or prepay any indebtedness for borrowed money (including the issuance of any debt security), increase or amend, modify or refinance any existing indebtedness;
(f) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the compensation payable or that could become payable by obligations of any other Person, except wholly owned Subsidiaries of the Company or any of its Subsidiaries to directors or officers, Company;
(g) other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into (i) any new intercompany loan or (ii) intercompany debt arrangements, or, in either case, modify or otherwise increase or decrease the balances thereof;
(h) mortgage, pledge, hypothecate or otherwise encumber or restrict the use of any of its material assets (tangible or intangible), including Subsidiary Securities, or create, assume or suffer to exist any Liens thereupon except Permitted Liens;
(i) make any loans, advances or capital contributions to, or investments in, any other Person (other than wholly owned Subsidiaries of the Company);
(j) change any of the financial accounting methods, principles or practices used by it or any of the working capital policies applicable to the Company and its Subsidiaries, except to the extent required by Law or GAAP;
(k) (i) make, change or revoke any material Tax election, unless an identical Tax election was made, changed or revoked during the preceding one-year period from the date hereof, (ii) settle or compromise any material claim or proceeding relating to Taxes, (iii) except as otherwise in the ordinary course of business consistent with past practice, execute or consent to any waivers extending the statutory period of limitations with respect to the collection of assessment of material Taxes, (iv) file any material amended Tax Return, (v) obtain any material Tax ruling or (vi) enter into a closing agreement with respect to material Taxes;
(l) propose or adopt any amendments to the Limited Partnership Agreement or the certificates of incorporation, bylaws or other similar governing documents of the General Partner or any Subsidiary of the Company;
(m) agree to grant or grant any stock-related or denominated, unit-related or denominated, cash-based performance or similar awards or bonuses or any other award that may be settled in LP Units, Depositary Units or other Company Securities or in Subsidiary Securities;
(n) enter into, forgive, renew or amend in any material respectrespect any loans to employees, officers or directors or any of their respective Affiliates or Associates;
(o) (i) enter into any new, or amend, terminate or renew any existing employment Employment Agreement with or consulting, bonus, severance, retirement, retention, change in control or similar agreement with for the benefit of any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreementemployees, or make grant any contribution increases in the compensation, perquisites or benefits to any Company Employee Planofficers, directors, employees and consultants (other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) agreements that are entered into in the ordinary course of business consistent with past practice with respect to new hire employees with an who are not officers or directors and whose annual base salary compensation does not to exceed $150,000, or (B) to replace existing employees whose employment has terminatedincrease in compensation, at compensation levels and with perquisites or benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available the terms of a Collective Bargaining Agreement in effect on the date hereof with respect to Parent employees subject to such Collective Bargaining Agreement and (C) normal reasonable increases in annual salary to Persons who are not Key Employees in the ordinary course of business consistent with past practicepractice and that, in the aggregate, do not result in a material increase in the benefits or compensation expense of the Company or its Subsidiaries in excess of the prior fiscal year increase), (Bii) employee loans accelerate the vesting or advances payment of the compensation payable or the benefits provided or to become payable or provided to any of its current or former directors, officers, employees or consultants or (iii) hire or terminate (other than for travelcause) any employee, business, relocation or other reimbursable expenses made except in the ordinary course of business consistent with past practice;
(fp) make any deposits or contributions of cash or other property to or take any other action to fund or in any other way secure the payment of compensation or benefits under Employee Benefit Plans or agreements subject to Employee Benefit Plans or any other plan, agreement, contract or arrangement of the Company except to the extent required by Law, such Employee Benefit Plan or agreements, contracts or arrangements in effect prior to the date hereof or in accordance with the ordinary course consistent with past practice of the Company;
(q) except to the extent required by applicable Law or in accordance with the terms of a Collective Bargaining Agreement in effect as of the date hereof, establish, adopt, amend or terminate any Employee Benefit Plan, including any employment, severance, consulting or other individual agreement, or establish, adopt or enter into any insurance, pension or other employee benefit plan or arrangement that would be considered an Employee Benefit Plan if it were in existence on the date of this Agreement;
(r) except as required by Law, enter into, amend or extend any Collective Bargaining Agreement;
(s) (i) transfer, license, sell, lease, sublease, subject make or agree to make any Lien capital expenditure or expenditures (other than Permitted Liens) or otherwise dispose including in respect of any assets repair, alteration, restoration, renovation or properties (whether by way rehabilitation of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real EstateProperty, any Company Lease or Real Property Lease or any Leased Real Estate, except (Aconstruction projects) dispositions of obsolete, surplus or worn out assets enter into any agreements or assets that are no longer useful arrangements providing for any such capital expenditures,in each case other than those set forth in the conduct Company’s capital expenditure budget as set forth on Section 5.01(s) of the Disclosure Letter or (ii) enter into any material new line of business outside of its existing business;
(t) renew or enter into any non-compete, exclusivity, non-solicitation or similar agreement that would restrict or limit, in any material respect, the Company, (B) transfers among operations of the Company and its SubsidiariesSubsidiaries or the Surviving Entity and its Subsidiaries after the Effective Time;
(u) compromise, settle or agree to settle any suit, action, claim, proceeding or investigation (Cincluding any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby) pursuant to existing Contracts other than compromises, settlements or otherwise agreements in the ordinary course of business consistent with past practice or that involve only the payment of monetary damages not in excess of $125,000 individually or $1,000,000 in the aggregate, in each case without the imposition of equitable relief on, or the admission of wrongdoing by, the Company or any of its Subsidiaries or any of its officers or directors;
(which for v) except as may be required by applicable Law or the avoidance Limited Partnership Agreement or any comparable certificates of doubt and without limitation incorporation or bylaws or other similar governing documents of any of the Company’s Subsidiaries or the General Partner, convene any regular or special meeting (or any adjournment thereof) of the Unitholders other than the Special Meeting;
(w) enter into any agreement or understanding or arrangement with respect to the foregoing shall be deemed voting or registration of the Company Securities or the Subsidiary Securities;
(x) fail to include keep in force material insurance policies or replacement or revised provisions providing insurance coverage with respect to any amusement parks, water parks or hotels and any other material assets, operations and activities of the sale Company and its Subsidiaries as is currently in effect;
(y) merge or other disposition, including at discounted prices, consolidate the Company or any of supplies and inventory), or its Subsidiaries with any Person;
(iiz) adopt or effect a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness reorganization of the Company or any of its Subsidiaries;
(h) (iaa) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or thatinto, in the aggregateamend, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend waive or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than terminations in accordance with their terms) any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practiceRelated Party Transaction; or
(obb) authorize, commit or agree or commit to do take any of the foregoingforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Cedar Fair L P)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from agrees that:
(a) between the date of this Agreement until and the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the BoardClosing Date, except as otherwise expressly permitted by provided in this Agreement, as set forth on provided in Section 6.01 to 6.1(a) of the Company Disclosure Letter or as Letter, required by applicable Law or with by the prior written consent terms of Parent any Benefit Plan as in effect on the date of this Agreement, or otherwise agreed to in writing by the Buyer (which agrees to respond promptly to any request for such agreement and not to be unreasonably withheld, conditioned withhold or delayedcondition such agreement), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, to (i) conduct its business in the ordinary course consistent with past practice and (ii) use commercially reasonable best efforts to maintain and preserve intact its business organization and its Subsidiaries' business organization, to keep available the services goodwill of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons those having material business relationships with it or its Subsidiaries it; and
(it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, b) between the date of this Agreement and the Effective TimeClosing Date, except as otherwise expressly permitted by provided in this Agreement or as set forth on Agreement, provided in Section 6.01 6.1(b) of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawLaw or otherwise agreed to in writing by the Buyer (which agrees to respond promptly to any request for such agreement and not to unreasonably withhold or condition such agreement), the Company shall not, nor and shall it permit any of cause its Subsidiaries not to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed)::
(ai) amend the Existing Operating Agreement or propose to amend its or any of its Subsidiaries' Charter Documentscomparable organizational instruments;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchaseincur, redeem assume or otherwise acquire, guarantee any additional Debt or offer to repurchase, redeem or otherwise acquire, grant any Company Securities Lien (other than the Convertible Notes as contemplated by the terms thereofany Permitted Lien) on any material asset or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employeesSubsidiaries, except for borrowings and reborrowings under the Revolving Note, dated February 2, 2006, by and between DCM and Fifth Third Bank (Aas amended, supplemented or otherwise modified from time to time) or in the ordinary course of business consistent with past practice which, for the avoidance of doubt, shall include the incurrence or guarantee of any Debt in connection with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replacedany CDO Financing;
(eiii) acquireissue, by mergerdeliver, consolidationsell, acquisition authorize, grant, dispose of, pledge or otherwise encumber any Membership Interests or any other capital stock, voting securities or equity interests of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more any of its Subsidiaries), in or any transaction class of securities convertible into, exchangeable or series exercisable for, or rights, warrants or options to acquire, any Membership Interests or any other capital stock, voting securities or equity interests of transactionsthe Company or any of its Subsidiaries or repurchase, in excess redeem or otherwise acquire any Membership Interests or any other capital stock, voting securities or equity interests of $250,000 the Company or any of its Subsidiaries;
(iv) effect any recapitalization, reclassification, split or combination in the aggregatecapitalization of the Company or any of its Subsidiaries;
(v) sell or convey any of its material assets, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(fvi) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose change its method of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease accounting or any Leased Real Estateaccounting principle, method, estimate or practice, except as may be required by changes in GAAP or applicable Law;
(Avii) dispositions of obsoletecancel, surplus terminate, amend or worn out assets or assets that are no longer useful in the conduct of the business of the Companyenter into any Material Contract, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise except in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventoryas otherwise permitted in Section 6.1(b)(ix), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(gviii) repurchasemerge or consolidate with or into, prepay or incur acquire by purchasing a substantial portion of the assets of, or by any indebtedness other manner, another Person or enter into any joint venture or partnership agreement or similar Contract;
(ix) (A) adopt, terminate or amend or secure any benefit plan or bonus, profit sharing, deferred compensation, incentive, stock option or stock purchase plan, program or commitment, paid time off for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls sickness or other rights to acquire any debt securities plan, program or arrangement for the benefit of employees, former employees, consultants or directors of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (Subsidiaries other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line adopting or amending Benefit Plans of business or make or agree to make any new capital expenditure general application, but only if such actions do not result in excess of $250,000 or thata material cost increase, in the aggregate, are in excess of $500,000, other than and (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (Bii) in the ordinary course of business and consistent with past practice, entering into employment or consulting agreements with any employees or consultants first hired after the date of this Agreement, PROVIDED, HOWEVER, that in no event will any such person be granted any Membership Interests, or (iiB) except in the ordinary course of business grant any material general increase (other than increases required under a Contract, or consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition compensation of any material restriction on the business or operations employees of the Company or any of its Subsidiaries or Affiliates or a any material increase (other than increases required under a Contract) in the Company's insurance premiums;
(j) enter into compensation payable or to become payable to any Contract of a type referenced in clause (ii), (iii), (iv), (v) officer or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) director of the Company Disclosure Letteror any of its Subsidiaries; PROVIDED, extend HOWEVER, that nothing in this subsection (ix) shall, in any way, prevent the Company or waive the application any of its Subsidiaries from paying, funding or securing any statute of limitations regarding the assessment or collection of benefits under any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of Benefit Plan after the date of this Agreement, pursuant to the terms of any Benefit Plan as in effect on the FIN 48 reserves applicable to that claimdate of this Agreement;
(mx) acquire make any capital expenditures or materially alter enter into any Owned Real Estate or any Ground Leased Real Estatecapital commitments in excess of $250,000;
(nxi) enter into adopt a plan of complete or partial liquidation or dissolution;
(xii) settle or compromise any Store Leases other than litigation, proceeding or investigation material to the Company and its Subsidiaries taken as a whole;
(xiii) issue any broadly distributed communication of a general nature to employees (including general communications relating to benefits and compensation) or customers without the prior approval of the Buyer, except for communications in the ordinary course of business that do not relate to the transactions contemplated by this Agreement;
(xiv) make, change or revoke any Tax election, file any amended Tax Return, settle or compromise any liability for Taxes, surrender any claim for a refund of Taxes, change any method of Tax accounting or any annual Tax accounting period, enter into any closing agreement relating to any Tax or waive or extend the statute of limitations in respect of any Tax (in each case, other than with respect to U.S. federal income or franchise Taxes and any Taxes derivative therefrom) to the extent that any of the foregoing could have a material post-Closing impact on the Buyer and its Affiliates taken as a whole;
(xv) amend or modify any existing employment agreement or any consulting agreement with respect to an employee or consultant to the Company or any of its Subsidiaries, as applicable;
(xvi) make any cash distribution to the Members in excess of (A) $5,997,000, PLUS (B) any amounts payable to the Members that held issued and outstanding Membership Interests as of immediately prior to the Effective Time pursuant to Section 6.22 that are actually received by the Company or any of its Subsidiaries prior to the Effective Time, PLUS (C) quarterly cash tax distributions and a cash tax distribution on or prior to the Closing with respect to any periods and/or portion thereof with respect to which the tax distribution has not previously been made, in each case computed consistent in all material respects with past practicepractice as determined in the reasonable judgment of Sellers' Representative, MINUS (D) any prepayments of Debt made by the Company or any of its Subsidiaries after the date hereof and prior to the Closing Date; PROVIDED THAT, if under the terms of the Existing Operating Agreement, the Company is required to make a distribution to a Put Right Seller (as defined in the Existing Operating Agreement) pursuant to Section 9.1l(g) of the Existing Operating Agreement, then notwithstanding the limitation contained in this Section 6.1(b)(xvi) the Company shall be permitted to make such distribution together with a PRO RATA distribution (in accordance with the Existing Operating Agreement) to all other Members. To the extent that the aggregate amount of all such distributions made by the Company after the date hereof that are addressed and permitted by this Section 6.1(b)(xvi) (including the proviso in the preceding sentence) exceeds the amount of the distributions that would be permitted to be made under this Section 6.1(b)(xvi) (but for the proviso in the preceding sentence), then the Closing Date Aggregate Cash Consideration shall be reduced on a dollar-for-dollar basis by the amount of such excess; or
(oxvii) agree to or commit make any commitment to do take any of the foregoingactions prohibited by this Section 6.1(b).
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 hereof to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewithClosing Date, the Company shall, and the Stockholder shall cause each of use its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by cause the Company or its Subsidiaries to, except to the extent compliance with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted 6.1 is waived in writing by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):SSB:
(a) amend or propose to amend not conduct any business except for its or any of its Subsidiaries' Charter Documentsrights and obligations as lessor under the Lease Agreement;
(b) use its best efforts to keep in full force and effect insurance comparable in amount and scope of coverage to that now maintained by it;
(ic) adjust, split, combine, reclassify use its best efforts to comply with all laws and regulations applicable to it and to the conduct of its business;
(d) not merge or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquireconsolidate with, or offer to repurchasepurchase substantially all of the assets of, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) person or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replacedentity;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more comply with all of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in obligations with respect to the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent 2006 Revenue Bonds and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practiceall agreements related thereto;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or not incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls create or other rights cause to acquire be created any debt securities of Lien on the Company or any of its Subsidiaries, guarantee any debt securities of another Person, Assets;
(g) not enter into any “keep well” or leases other Contract to maintain any financial statement condition than the Lease Agreement;
(h) promptly advise SSB in writing of any other Person or enter into material adverse change and any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action event (other than events generally known to the entry into this Agreement and the other Company Transaction Documentspublic) that which would reasonably be expected to result in such a change, including any material amendmentdefault or event which, modification or adverse change to any term ofwith the giving of notice, lapse of time, or material both, would result in an event of default under, any material indebtedness of with respect to the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP2006 Revenue Bonds;
(i) dischargenot sell, settletransfer or otherwise dispose of, compromiseor agree to sell, assign transfer or satisfy otherwise dispose of, any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any Assets, without the express written consent of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiumsSSB;
(j) not enter into any Contract of a type referenced other Contracts affecting in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a)any way the Assets;
(k) make not enter into or modify any material change in Contract with respect to any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Lawthe foregoing;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, not enter into any material agreement relating to federal, state, local or other Taxes, file do any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claimthings prohibited in clauses (a) - (l) above;
(m) acquire not be in violation or materially alter breach of any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in material provision of this Agreement, and the ordinary course business and operations of business consistent the Company shall comply in all material respects with past practice; or
(o) agree and are being conducted in accordance with, all governing laws, regulations and ordinances applicable thereto and the Company is not in violation of or commit to do in default under, any judgment, award, order, writ, injunction or decree of the foregoingany court, arbitration tribunal, governmental entity or regulatory body.
Appears in 1 contract
Samples: Option Agreement (Amincor, Inc.)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date of this Agreement until the earlier of the termination of this Agreement and the Effective Time, except (i) the Effective Time and as prohibited or required by Applicable Law, (ii) the first date on which Parent shall have exercised rights under as set forth in Section 1.03 to designate at least a majority 5.01 of the BoardCompany Disclosure Letter, except (iii) as otherwise required or expressly permitted contemplated by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written (iv) if Parent shall otherwise consent of Parent (which consent shall not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in or (v) for any actions required to be taken pursuant to the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each terms of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) andLife Sciences SAPA (including, without limitation, the Restructuring Transactions or pursuant to the extent consistent therewithTransition Services Agreement) or otherwise solely related to the Life Sciences Assets or the Life Sciences Liabilities, the Company shall, and shall cause each of its Subsidiaries to, (A) conduct its business in the ordinary course of business consistent with past practice and in compliance in all material respects with all Applicable Laws and the requirements of all Material Contracts, (B) use its reasonable best efforts to maintain and preserve intact its business organization and business relationships (including with its Subsidiaries' business organizationsuppliers, to customers and Governmental Entities) and keep available the services of its and its Subsidiaries' current officers and employees, (C) use its reasonable best efforts to preserve keep in effect all material insurance policies in coverage amounts substantially similar to those in effect on the date of this Agreement, and (D) use its reasonable best efforts to promptly notify Parent of (1) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement, and its Subsidiaries' present relationships and goodwill with customers(2) any Action commenced or threatened in writing, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it relating to or involving or otherwise affecting the Company or any of its Subsidiaries (it being agreed and understood that relates to the consummation of the transactions contemplated by this Agreement; provided, however, that no action by the Company or its Subsidiaries failure to take action with respect to matters specifically addressed by any other provision of this Section 6.01 the provisions of the next sentence shall be deemed to be constitute a breach of the foregoing under this sentence unless such action or failure to take action would constitute a breach of such other provision of this Agreement)the next sentence. Without In addition, and without limiting the generality of the foregoingforegoing and to the fullest extent permitted by Applicable Law, between from the date of this Agreement until the earlier of termination of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or (i) as set forth on in Section 6.01 5.01 of the Company Disclosure Letter, the relevance of which disclosure (ii) for any actions required to be taken pursuant to the appropriate subsection in this Section 6.01 is reasonably apparent on its face terms of the Life Sciences SAPA (including, without limitation, the necessity of repetitive disclosure Restructuring Transactions or cross-referencepursuant to the Transition Services Agreement) or otherwise solely related to the Life Sciences Assets or any Life Sciences Liabilities (except as specifically provided for below), or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the (iii) with Parent’s prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or ), the Company shall not, and shall not permit any of its Subsidiaries' Charter Documents;Subsidiaries to, do any of the following:
(b) (i) adjust, split, combine, reclassify amend the Company Charter or make any like change the Company By-laws or amend in any Company Securities material respect (or Company in any respect adversely impacting Parent or Merger Sub) the comparable organizational documents of any Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than of the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect ofCompany, or enter into any Contract written agreement with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent)Company’s stockholders in their capacity as such;
(cii) (A) issue, deliver, sell, pledgeencumber or grant any shares of its capital stock or other equity or voting interests, dispose ofor any securities or rights convertible into, transferexchangeable or exercisable for, modify or encumber evidencing the right to subscribe for any shares of its capital stock or other equity or voting interests, or any rights, warrants or options to purchase any shares of its capital stock or other equity or voting interests, except for any issuance, sale or grant (1) solely between or among the Company Securities and its wholly owned Non-Life Sciences Subsidiaries or (2) required pursuant to the exercise or settlement of Company Stock Options, Company Restricted Stock Awards or Company Subsidiary SecuritiesRestricted Stock Unit Awards identified in Section 3.03(a) as outstanding on the Capitalization Date in accordance with the terms of the applicable Company Stock Plan in effect on the Capitalization Date or granted after the date hereof to the extent expressly permitted by this Agreement, other than (iB) the issuance redeem, purchase or otherwise acquire any of its outstanding shares of Company Common Stock upon the exercise capital stock or other equity or voting interests, or any rights, warrants or options to acquire any shares of any Company Equity Award outstanding its capital stock or other equity or voting interests, except (x) pursuant to written commitments in effect as of the date hereof with former directors or employees in connection with the termination of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior services to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries Subsidiaries, copies of which have been filed as exhibits to directors the Company SEC Documents or officers(y) in connection with the satisfaction of Tax withholding obligations with respect to Company Stock Options, Company Restricted Stock Awards or Company Restricted Stock Unit Awards, acquisitions by the Company in connection with the forfeiture of such equity awards, or acquisitions by the Company in connection with the net exercise of such Company Stock Options, or (C) split, combine, subdivide or reclassify any shares of its capital stock or other equity or voting interests;
(iii) (A) in the case of the Company, establish a record date for, declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock, Company Securities or other equity or voting interests and (B) in the case of any Subsidiary of the Company, establish a record date for, declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock, Company Securities or other equity or voting interests, other than increases than, in compensation made each case with respect to any dividend or distribution solely to the Company or any wholly owned domestic Non-Life Sciences Subsidiaries or solely to the extent provided for in the Restructuring Transactions;
(iv) (A) incur any Indebtedness or issue or sell any debt securities or rights to acquire debt securities, except for (1) Indebtedness solely between or among the Company and any of its wholly owned Non-Life Sciences Subsidiaries, (2) letters of credit issued in the ordinary course of business consistent with past practices, and (3) trade credit or trade payables in all material respects the ordinary course of business consistent with past practice, or enter into (B) make any new loans, capital contributions or amend in advances to any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as person outside of the date ordinary course of this Agreement, or make any contribution to any Company Employee Planbusiness consistent with past practice, other than amendments to the Company or any wholly owned Non-Life Sciences Subsidiary of the Company;
(v) acquire, sell, lease (as lessor), license, mortgage, sell and contributions required by Law leaseback or the terms of such Company Employee Plans as in effect on the date hereofotherwise subject to any Lien (other than Permitted Liens), or (ii) hire otherwise dispose of any new employeesReal Property or other material properties or assets, except including Intellectual Property, or any material interests therein or waive or relinquish, abandon or allow to lapse any Real Property or other material properties or assets, including Intellectual Property, other than (A) in the ordinary course of business consistent with past practice with respect to employees with for fair market value in an annual base salary amount not to exceed $150,0005,000,000 in the aggregate, (B) pursuant to Contracts in existence on the date of this Agreement and set forth on Section 3.12 of the Company Disclosure Letter, or (BC) with respect to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
transactions (ex) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than where the Company is the acquiring or disposing party, among the Company and one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and wholly owned Non-Life Sciences Subsidiaries in the ordinary course of business consistent with past practicepractice or (y) where a wholly owned Non-Life Sciences Subsidiary is the acquiring or disposing party, among the Company and one or more of the wholly owned Non-Life Sciences Subsidiaries or among the wholly owned Non-Life Sciences Subsidiaries;
(vi) make or authorize capital expenditures in any calendar year that, individually or in the aggregate, exceed the amounts budgeted in the Company’s current plan, which amounts are set forth in Section 5.01(a)(vi) of the Company Disclosure Letter, by more than 10%;
(vii) make any change in financial accounting methods, principles or practices, or elections, except insofar as may be required by a change in GAAP or Applicable Law occurring after the date of this Agreement;
(viii) assign, transfer, lease, cancel, fail to renew or fail to extend any Real Property Lease or Permit;
(ix) (A) commence any Action, except with respect to (1) routine matters in the ordinary course of business and consistent with past practices or (2) in such cases where the Company reasonably determines in good faith that the failure to commence such Action would result in a material impairment of a valuable aspect of the Business (provided that the Company consults with Parent and considers the views and comments of Parent with respect to such Actions prior to the commencement thereof) or (B) employee loans settle or advances for travelcompromise, businessor propose to settle or compromise, relocation any claim or Action involving or against the Company or any of its Subsidiaries, other than, subject to Section 6.10, settlements or compromises involving only monetary payment by the Company or any of its Subsidiaries in an amount not to exceed $5,000,000 individually or $10,000,000 in the aggregate;
(x) abandon, encumber, convey title (in whole or in part), exclusively license or grant any material exclusive right or other reimbursable expenses made material exclusive licenses to material Intellectual Property owned by or exclusively licensed to the Company or any of its Subsidiaries, or enter into licenses or agreements that impose material restrictions upon the Company or any of its Affiliates with respect to material Intellectual Property owned by any third party and impair the operation of the business of the Company or any of its Affiliates, in each case, other than in the ordinary course of business consistent with past practice;
(fxi) except for amendments, terminations or non-renewals in the ordinary course of business consistent with past practice, amend, waive any provision of, fail to enforce (in each case, in any material respect), assign or terminate any Material Contract or enter into a Contract that would reasonably be likely to (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of adversely affect the Company, Parent or the Surviving Company in any Owned Real Estatematerial respect, any Lease (ii) limit or restrict the Surviving Company or any Leased Real Estateof its Affiliates from engaging or competing in any line of business or in any geographical area, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise other than exclusive sales agreements entered into in the ordinary course of business consistent with past practice or (which for the avoidance of doubt and without limitation iii) be a Material Contract if entered into prior to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationdate hereof;
(gxii) repurchaseexcept as required by Applicable Law, prepay pursuant to the terms of any Company Benefit Plan in effect on the date hereof, (i) increase the compensation of, hire or incur terminate any indebtedness for borrowed money or guarantee any such indebtedness of another Persondirector, issue or sell any debt securities or options, warrants, calls executive officer or other rights to acquire any debt securities employee or independent contractor with annual compensation in excess of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing$100,000, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility than in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modifyestablish, amend or terminate any Company Material Contract Benefit Plan (or waiveany plan, release program, arrangement or assign agreement that would be a Company Benefit Plan if it were in existence on the date hereof) or Collective Bargaining Agreement or increase the benefits provided under any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IPBenefit Plan;
(ixiii) dischargeforgive any loans to any employees, settleofficers or directors of the Company, compromiseor any of their respective Affiliates;
(xiv) acquire (whether pursuant to merger, assign stock or satisfy asset purchase or otherwise) in one transaction or any material claimseries of related transactions any equity interests in any Person or any business or division of any Person or all or substantially all of the assets of any Person (or any business or division thereof), whether form any Subsidiary or not pending before enter into any joint venture, partnership, limited liability corporation or similar arrangement;
(xv) adopt a Governmental Entityplan of complete or partial liquidation, dissolution, merger or conversion or resolution providing for or authorizing such a liquidation, dissolution, merger or conversion;
(i1) outside except as in the ordinary course of business consistent with past practice business: (A) make or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of change any material restriction on Tax election of the business Company or operations its Subsidiaries; (B) settle or compromise any material Tax liability of the Company or any of its Subsidiaries or Affiliates settle or compromise any Tax liability that could have a material increase effect on the Company or its Subsidiaries in the Company's insurance premiums;
future taxable years; (j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(kC) make any material change in any method of financial accounting principles or practices, in each case except for Tax accounting; (D) file any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local amendment to an income or other material Tax election, adopt Return; or change any method of tax accounting other than as described on Section 4.06(f(E) of the Company Disclosure Letter, waive or extend or waive the application of any statute of limitations regarding the assessment or collection in respect of any federal Tax material Taxes except as required by Applicable Law; or (2) fail to promptly notify Parent of any material stateaudit, local examination, investigation, written claim or other Taxproceeding by any Governmental Entity relating to Taxes that arises prior to the Effective Time;
(xvii) repatriate any cash, settle cash equivalents or compromise any federal other assets to the extent that such repatriation would result in a Tax liability to the Company or refundany of its Subsidiaries except, settle or compromise any in connection with the repayment of outstanding indebtedness of an amount not in excess of $60,000,000, for withholding taxes in local jurisdictions that are not material statein relation to the value of the cash, local cash equivalents or other Tax liability assets repatriated;
(xviii) amend, modify or refund, enter into waive any material agreement relating to federal, state, local provisions of the Life Sciences SAPA or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund the Transition Services Agreement (or otherwise make a material change in alter the Tax compliance practices terms of any services or consideration to be paid therefor under the Transition Services Agreement) that would adversely impact the Parent, the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of or the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claimSurviving Company in any respect;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(nxix) enter into any Store Leases other than license or sublease with the Life Sciences Buyer of the real property leased by ATMI PACKAGING pursuant to the Lease, dated October 21, 2004, by and between Wxxx-Xxxxx Industrial, LLC and ATMI PACKAGING, as amended from time to time (the “MN Facility”) on terms that are inconsistent with the terms specified in the ordinary course Transition Services Agreement in any material respect and that would not reasonably be expected to materially impair the use of business consistent in all material respects with past practicethe MN Facility by the Company and its Subsidiaries; or
(oxx) agree agree, commit or commit propose to do take any of the foregoingforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Atmi Inc)
Conduct of Business of the Company. The During the period from the date of this Agreement until the earlier of the Closing Date and the valid termination of this Agreement, except as expressly required or contemplated by this Agreement or applicable Law, as consented to in writing by Purchaser or as set forth in Section 5.4 of the Company Disclosure Schedule, the Company shall, and shall cause each the other Transferred Entities to, (i) use commercially reasonable efforts to conduct its business in the ordinary course of business consistent with past practice in all material respects, including to maintain its Subsidiaries toongoing Capital Expenditures program in all material respects and (ii) use commercially reasonable efforts to preserve intact in all material respects its business and existing personal properties in the ordinary course of business consistent with past practice and to maintain its existing relationships and goodwill with Governmental Entities, customers, suppliers, vendors, creditors, employees, business partners, prospects and agents; provided that no action by any Transferred Entity with respect to matters addressed by any of the following provisions of this Section 5.4 shall be deemed a breach of this sentence unless such action would constitute a breach of one or more of such provisions, and provided, further that the foregoing notwithstanding, the Company and the other Transferred Entities may use cash or cash equivalents to make or pay distributions or dividends on or prior to the Closing. Without limiting the foregoing, during the period from the date of this Agreement until the earlier of (i) the Effective Time Closing Date and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority valid termination of the Boardthis Agreement, except as expressly contemplated or permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as may be required by applicable Law or with the prior written Law, as consented to in writing by Purchaser (such consent of Parent (not to be unreasonably withheld, conditioned or delayeddelayed in the case of Sections 5.4(d), conduct its business in all material respects in the ordinary course of business(i), consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closuresj), (k), (l), (m) and, and (o) and (p) (as it relates to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement clauses) only below) or as set forth on in Section 6.01 5.4 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawSchedule, the Company shall not, nor and shall it permit any of its Subsidiaries cause the other Transferred Entities not to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed)::
(a) (i) amend or propose to amend its or the organizational documents of any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify the Transferred Entities except as otherwise required by applicable Law; or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any non-cash dividend or non-cash distribution to any Person other than a Transferred Entity or redeem or repurchase any equity interest of any Transferred Entity from any stockholder or member of any Transferred Entity;
(whether in cashb) issue, stocksell, property pledge, repurchase or otherwise) in respect of, or enter into any Contract with respect to the voting dispose of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary additional equity interests of any of the Company Transferred Entities, or any options, warrants or rights of any kind to its parent)acquire any membership interests which are convertible into or exchangeable for such membership interests, except for transactions between the Transferred Entities;
(c) issueincur, deliverassume, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Personguarantee, issue or sell otherwise become liable for any Covered Indebtedness or any debt securities or options, warrants, calls warrants or other rights to acquire any debt securities of the Company or any of its SubsidiariesTransferred Entities, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other thanCredit Support Arrangements, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure an aggregate amount in excess of $250,000 5,000,000; provided that any indebtedness, debt securities or thatCredit Support Agreements incurred, in the aggregateassumed, are in excess guaranteed, issued or entered into pursuant to this Section 5.4(c) shall be repaid, redeemed, discharged or terminated (including satisfaction of $500,000all associated repayment costs and expenses), other than (A) as contemplated by the Company's capital expenditure budgetapplicable, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except prior to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiumsClosing;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoing.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries toExcept as expressly provided for by this Agreement, during the period from the date of this Agreement until the earlier of (i) to the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewithTime, the Company shallwill conduct, and shall will cause each of its Subsidiaries toto conduct, its operations according to its ordinary and usual course of business consistent with past practice, including in particular, but without limitation, with respect to the fulfillment of orders and the provision of customer rebates and discounts, and in compliance in all material respects with applicable Laws. In addition, the Company will use and will cause each of its Subsidiaries to use its commercially reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, employees and to preserve its the goodwill of and its Subsidiaries' present maintain satisfactory relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other those Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or any of its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement)Subsidiaries. Without limiting the generality of the foregoing, between the date of this Agreement foregoing and the Effective Time, except as otherwise expressly permitted provided for by this Agreement or as set forth on Section 6.01 of Agreement, during the Company Disclosure Letter, period specified in the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries topreceding sentence, without the prior written consent of Parent (which consent consent, in the case of paragraph (d)(iii), (e), (o) or (v) (solely to the extent such paragraph (v) relates to paragraphs (d)(iii), (e), or (o)) shall not be unreasonably withheldconditioned, conditioned withheld or delayed):), the Company will not and will not permit any of its Subsidiaries to:
(a) amend except as set forth in Section 5.01(a) of the Disclosure Letter, issue, sell, grant options or rights to purchase, pledge, or authorize or propose the issuance, sale, grant of options or rights to amend its purchase or pledge, any Company Securities or Subsidiary Securities (or, in each case the economic equivalent thereof), other than Shares issuable upon exercise of its Subsidiaries' Charter Documentsthe Existing Stock Options or Existing Restricted Stock Units, or pursuant to any other awards under the Stock Plans disclosed in Section 3.02(a) hereof and outstanding on the date hereof;
(b) (i) adjustother than in connection with the retention of Shares by the Company representing the amount of taxes due upon the vesting of Existing Restricted Stock Units, splitacquire or redeem, combinedirectly or indirectly, reclassify or make any like change in amend any Company Securities or Company Subsidiary Securities;
(c) split, (ii) repurchase, redeem combine or otherwise acquire, reclassify its capital stock or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside aside, make or pay any dividend or distribution (whether in cash, stock, property stock or otherwiseproperty) in respect of, or enter into on any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities shares of its capital stock (other than cash dividends from paid to the Company or one of its wholly owned Subsidiaries by a direct or indirect wholly owned Subsidiary of the Company with regard to its parentcapital stock or other equity interests);
(cd) issueexcept as set forth in Section 5.01(d) of the Disclosure Letter, deliver(i) make any acquisition or disposition or cause any acquisition or disposition to be made, sellby means of a merger, pledgeconsolidation, dispose ofrecapitalization or otherwise, transferof any business, assets or securities or any sale, lease, encumbrance or other disposition of assets or securities of the Company any of its Subsidiaries or any third party, except for purchases or sales of raw materials, inventory, or equipment incident to the sale of inventory, made in the ordinary course of business and consistent with past practice, (ii) adopt a plan of complete or partial liquidation, dissolution, recapitalization or restructuring, (iii) enter into a Material Contract, modify or encumber terminate any Company Securities Material Contract or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise grant any release or relinquishment of any rights under any Material Contract, (iv) modify, terminate or grant any release or waiver under any noncompetition agreement with any of the Company’s employees, (v) purchase or otherwise cause to be issued any insurance policy in favor of the Company Equity Award or any of its Subsidiaries (except for the insurance policies specified in Section 5.06 of this Agreement), or amend in any material respect or terminate any insurance policy set forth on Section 3.18 of the Disclosure Letter or grant any release or relinquishment of any material rights under any such insurance policy, or (vi) enter into a new agreement related to a clinical trial with regard to the Company’s products or amend or terminate any of the agreements or protocols related to the clinical trials listed on Section 3.17(e) of the Company Disclosure Letter;
(e) except as set forth in Section 5.01(e) of the Disclosure Letter, incur, create, assume or otherwise become liable or responsible for any long-term debt or short-term debt, except for short-term debt incurred under debt instruments outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except wholly owned Subsidiaries of the Company;
(g) make any loans, advances or capital contributions to, or investments in, any other Person (other than wholly owned Subsidiaries of the Company);
(h) change in any material respect, any financial accounting methods, principles or practices used by it, except as required by GAAP;
(i) transfermake or change any material Tax election, licenseextend the statute of limitations (or file any extension request) with any Tax authority, sellamend any material federal, leaseforeign, subleasestate or local Tax return, subject or settle or compromise any material federal, foreign, state or local income Tax liability;
(j) adopt any amendments to its Certificate of Incorporation or Bylaws (or other similar governing documents) or adopt a shareholder rights plan, or otherwise amend or modify the Company Rights Plan or the Rights Plan Amendment;
(k) except as set forth in Section 5.01(k) of the Disclosure Letter, grant any Lien stock-related, performance or similar awards or bonuses;
(l) forgive any loans to employees, officers or directors or any of their respective Affiliates or Associates;
(m) except as set forth in Section 5.01(m) of the Disclosure Letter, enter into any new, or amend, terminate or renew any existing, employment, severance, consulting or salary continuation agreements with or for the benefit of any existing or future officers, directors or employees (other than Permitted Liens) or otherwise dispose of any assets or properties (whether as required by way of merger, consolidation, sale of stock or assetsapplicable Law, or otherwisewith respect to renewals only, pursuant to an automatic renewal provision contained in any such agreement), including the capital stock or other equity interests in grant any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful increases in the conduct of the business of the Companycompensation or benefits to officers, directors or employees (B) transfers among the Company and its Subsidiaries, other than normal increases to employees who are not directors or (C) pursuant to existing Contracts or otherwise officers in the ordinary course of business consistent with past practice (which for practices and that, in the avoidance aggregate, do not result in a material increase in benefits or compensation expense of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventoryCompany), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(gn) repurchase, prepay make any deposits or incur any indebtedness for borrowed money or guarantee any such indebtedness contributions of another Person, issue or sell any debt securities or options, warrants, calls cash or other rights property to acquire or take any debt securities other action to fund or in any other way secure the payment of compensation or benefits under the Plans or agreements subject to the Plans or any other plan, agreement, contract or arrangement of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoingCompany, other than, in each case, borrowings and repayments under than contributions to Plans made by the Company's existing revolving credit facility Company in the ordinary course of business and consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(ho) terminate any employee having an annual base salary of more than $150,000, except as a result of such employee’s (i) voluntary resignation, (ii) failure to perform the duties or responsibilities of his employment, (iii) engaging in serious misconduct, (iv) being convicted of or entering a plea of guilty to any crime or (v) engaging in any other conduct constituting “cause” (as defined in any applicable employment agreement or services agreement) for such employee’s termination as determined in the company’s reasonable discretion;
(p) enter into any new line collective bargaining or similar labor agreement;
(q) except as set forth in Section 5.01(q) of business the Disclosure Letter or make as otherwise required by Law, adopt, amend or agree to make terminate any new Plan or any other bonus, severance, insurance pension or other employee benefit plan or arrangement;
(r) incur any material capital expenditure or any obligations, liabilities or indebtedness in excess of $250,000 or thatrespect thereof, in the aggregate, are in excess of $500,000, other than (A) as except for those contemplated by the Company's capital expenditure budgetbudget for the relevant fiscal year, which capital expenditure budget has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit Parent prior to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(ms) acquire settle any suit, action, claim, proceeding or materially alter any Owned Real Estate or any Ground Leased Real Estateinvestigation;
(nt) enter into convene any Store Leases regular or special meeting (or any adjournment thereof) of the Company Stockholders other than in (i) the ordinary course of business consistent in all material respects with past practiceSpecial Meeting and (ii) subject to Section 5.04(b) hereof, the Annual Meeting;
(u) take or omit to take any action that would cause any issued patents or registered trademarks owned by the Company or its Subsidiaries to lapse, be abandoned or canceled, or fall into the public domain; or
(ov) offer, agree or commit commit, in writing or otherwise, to do take any of the foregoingforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Osteotech Inc)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as Except for matters set forth on in Section 6.01 to of the Company Disclosure Letter or otherwise expressly permitted or required by this Agreement, as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned delayed or delayedconditioned), from the Agreement Date to the earlier of the Effective Time and the termination of this Agreement in accordance with its terms (the “Pre-Closing Period”), the Company shall, and shall cause the Company Subsidiaries to conduct its business in the ordinary course, and use commercially reasonable efforts to (x) preserve intact its present business organization, (y) keep available the services of its present officers at the vice-president level and above and (z) preserve its present relationships and goodwill with suppliers, licensors, licensees, contractors, partners and others having material business dealings with it (it being agreed that matters addressed by the specific provisions of the next sentence shall be governed by such provisions rather than the general provisions of this sentence). In addition, except for matters set forth in Section 6.01 of the Company Disclosure Letter or otherwise expressly permitted or required by this Agreement or required by applicable Law, during the Pre-Closing Period, the Company shall not, and shall cause the Company Subsidiaries not to, do any of the following without the prior written consent of Parent (which consent, in the case of Sections 6.01(f), (g), (h), (i), (k), (l), (m), (n), (q), (r), and (s), shall not be unreasonably withheld, delayed or conditioned):
(a) amend (i) enter into any new material line of business or propose enter into any agreement, arrangement or commitment that materially limits or otherwise restricts the Company or its affiliates, including, immediately following the Merger Closing, Parent and its affiliates (other than in the case of Parent and its affiliates, due to amend the operation of Parent’s or its affiliates’ own Contracts), from time to time engaging or competing in any line of business or in any geographic area, (ii) otherwise enter into any agreements, arrangements or commitments imposing material restrictions on its assets, operations or business, (iii) enter into any agreement, arrangement or commitment that purports to bind or restrict Parent or any of its Affiliates, other than, following the Effective Time, the Surviving Corporation and the Company Subsidiaries' Charter Documents, or (iv) enter into any Contract that by its express terms requires the Company, or any successor to, or acquirer of, the Company to make any Change of Control Payment or which gives another Person a right to receive or elect to receive a Change of Control Payment;
(b) (i) adjustdeclare, splitset aside, combineestablish a record date in respect of, reclassify accrue or pay any dividends on, or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution distributions (whether in cash, stock, property equity securities or otherwiseproperty) in respect of, or enter into any Contract with respect to the voting ofof its capital stock, any Company Securities or Company Subsidiary Securities (other than dividends from and distributions of cash by a direct or indirect wholly owned Subsidiary subsidiary of the Company to its parent), (ii) 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 (iii) repurchase, redeem, offer to redeem or otherwise acquire, directly or indirectly any shares of capital stock of the Company or options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire any such shares of capital stock, except for (A) acquisitions of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options or Company Warrants in order to pay the exercise price of Company Stock Options or Company Warrants, (B) the withholding of shares of Company Common Stock to satisfy Tax obligations with respect to awards granted pursuant to the Company Stock Plans or non-plan inducement awards and (C) the acquisition by the Company of Company Stock Options and Company RSUs in connection with the forfeiture of such awards, in each case, in accordance with their terms;
(c) issue, grant, deliver, sell, pledgeauthorize, dispose of, transfer, modify pledge or otherwise encumber any shares of its capital stock or options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire such shares, any Voting Company Securities Debt or any other rights that give any person the right to receive any economic interest of a nature accruing to the holders of Company Subsidiary SecuritiesCommon Stock, other than (i) the issuance of shares issuances of Company Common Stock upon the exercise of any Company Equity Award outstanding as of Stock Options, the date of this Agreement in accordance with its terms, (ii) the issuance of shares settlement of Company Common Stock RSUs or upon the exercise of Company Warrants, in respect of other equity compensation awards each case, outstanding under Company Stock Plans as of on the date of this Agreement Date and in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) amend its certificate of incorporation, bylaws or other comparable organizational documents (iexcept for immaterial or ministerial amendments);
(e) form any subsidiary or acquire or agree to acquire, directly or indirectly, in a single transaction or a series of related transactions, whether by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any assets outside of the ordinary course of business, any business or any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof or any other Person (other than the Company);
(f) except as required by applicable Law or required or permitted by pursuant to the terms of any Company Employee Benefit Plan or written Contract existing prior to Company Benefit Agreement, in each case, as in effect on the date of this Agreement Date, and that has have been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, Parent (i) adopt, enter into, amendestablish, terminate terminate, amend or modify any collective bargaining agreement, Company Benefit Plan or Company Benefit Agreement (or plan or arrangement that would be a Company Benefit Plan or Company Benefit Agreement if in effect on the Agreement Date), (ii) grant to any director, employee or individual service provider of the Company or any Company Subsidiary any increase in base or other compensation, (iii) grant to any director, employee or individual service provider of the Company or any Company Subsidiary any severance or termination pay or benefits (or increase the amount thereof), (iv) pay or award, or commit to pay or award, any bonuses or incentive compensation, (v) enter into any retention, transaction bonus change in control, severance or termination agreement with any director, employee or individual service provider of the Company or a Company Subsidiary, (vi) take any action to accelerate any material rights or benefits under any Company Employee Plans Benefit Plan or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Benefit Agreement, or make fund or require the funding of any contribution to payments or benefits under any Company Employee Plan, Benefit Plan or Company Benefit Agreement or (vii) hire (other than amendments and contributions required by Law to replace a non-executive officer whose employment has terminated) or promote or terminate (other than for cause) the terms employment or service of such any employee or individual service provider, in either case, at or to the level of executive director or above; provided that this Section 6.01(f) shall not restrict the Company Employee Plans as or either Company Subsidiary from entering into an offer letter (which offer letters shall be at-will in effect on the date hereof, case of employees in the United States) or consulting agreement (ii) hire any new employees, except (Awhich consulting agreement shall be terminable for convenience with no more than 30 days’ notice) in the ordinary course with any employee or individual service provider that is newly hired or engaged below the level of business executive director in accordance with the foregoing clause (vii) or providing to such employee or individual service provider compensation and benefits consistent with its past practice with respect for similarly situated employees (including permitting any such employees to be eligible for the benefits made generally available to non-executive employees with an annual base salary not to exceed $150,000, or (Band the severance set forth in Section 7.03(a) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replacedCompany Disclosure Letter) and individual service providers;
(eg) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loanschange in accounting methods, advances principles or capital contributions to practices, except as may be required (i) by GAAP (or investments in any Person (other than the Company or one or more of its Subsidiariesauthoritative interpretation thereof), in including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any transaction similar organization or series of transactions(ii) by Law, including Regulation S-X promulgated under the Securities Act, in excess of $250,000 in each case, as agreed to by the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practiceCompany’s independent public accountants;
(fh) (i) transfer, license, sell, leaselease (as lessor), subleaselicense or otherwise transfer (including through any “spin-off”), or pledge, encumber or otherwise subject to any Lien (other than a Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwiseLien), including the capital stock any properties or assets (other than Intellectual Property) except (i) sales or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus inventory and excess or worn out assets obsolete properties or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice business, (ii) pursuant to Contracts to which for the avoidance of doubt Company is a party made available to Parent and without limitation in effect prior to the foregoing shall Agreement Date or (iii) properties or assets having a fair market value of less than $100,000 in the aggregate;
(i) sell, assign, license or otherwise transfer any Intellectual Property owned or purported to be deemed owned by the Company or either Company Subsidiary, except for (i) non-exclusive licenses granted to include service providers of the sale Company or other dispositioneither Company Subsidiary to Intellectual Property in connection with such service provider’s provision of services to the Company or either Company Subsidiary in the ordinary course of business, including at discounted prices, of supplies (ii) pursuant to Contracts to which the Company or either Company Subsidiary is a party made available to Parent and inventory)in effect prior to the Agreement Date, or (iiiii) adopt transactions among the Company and the Company Subsidiaries or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationamong the Company Subsidiaries;
(gj) repurchase, prepay (i) incur or incur materially modify the terms of (including by extending the maturity date thereof) any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls warrants or other rights to acquire any debt securities of the Company or any of its SubsidiariesCompany, guarantee any debt securities of another Person, enter into any “keep well” or other Contract agreement to maintain any financial statement condition of any other another Person or enter into any arrangement having the economic effect of any of the foregoingforegoing or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other thanthan to or in (A) the Company, (B) any acquisition not in each case, borrowings and repayments violation of Section 6.01(e) or (C) any person pursuant to any advancement obligations under the Company's existing revolving credit facility Company Charter, Company Bylaws or indemnification agreements as in effect on or prior to the Agreement Date that have been made available to Parent;
(k) make or agree to make any capital expenditure or expenditures that in the aggregate are in excess of $250,000;
(l) pay, discharge, settle, compromise or satisfy (i) any pending or threatened claims, liabilities or obligations relating to a Proceeding (absolute, accrued, asserted or unasserted, contingent or otherwise), other than any such payment, discharge, settlement, compromise or satisfaction of a claim solely for money damages in the ordinary course of business in an amount not to exceed $500,000 per payment, discharge, settlement, compromise or satisfaction or $1,000,000 in the aggregate for all such payments, discharges, settlements, compromises or satisfactions or (ii) any litigation, arbitration, Proceeding or dispute that relates to the Transactions (which shall be governed by Section 7.08 or Section 3.08(d));
(m) (i) adopt or change any accounting method, principle or practice or accounting period used for Tax purposes, (ii) make, amend or revoke any material Tax election, (iii) file an amended income or other material Tax Return, (iv) enter into a “closing agreement” within the meaning of Section 7121 of the Code (or any corresponding or similar provision of any state, local or non-U.S. Tax Law) with any Governmental Entity regarding any Tax liability or assessments, (v) request any Tax ruling from any Governmental Entity, (vi) settle or compromise any Proceeding relating to material Taxes or surrender a right to a material Tax refund, (vii) waive or extend the statute of limitations with respect to any material Tax or material Tax Return (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business consistent with past practice, ) or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (iviii) enter into any new line of business Tax allocation, indemnity or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, sharing agreement (other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available pursuant to Parent, or (B) agreements nor primarily related to Taxes and entered into in the ordinary course of business consistent with past practice);
(n) amend, (ii) except in the ordinary course of business consistent with past practice, modify, amend cancel or terminate any material insurance policy naming the Company Material Contract or waiveeither Company Subsidiary as an insured, release a beneficiary or assign a loss payable payee without obtaining comparable substitute insurance coverage;
(o) adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the Merger);
(p) adopt or implement any material stockholder rights plan (or claims thereunder similar plans or arrangements);
(iiiq) dispose of(i) abandon, grantcancel, obtain fail to renew or permit to lapse any material Company IPRegistered Intellectual Property, (ii) terminate any Contract under which material Intellectual Property is licensed to the Company or either Company Subsidiary, (iii) disclose to any third party, other than under a confidentiality agreement or other legally binding confidentiality undertaking, any material Trade Secret owned or purported to be owned by the Company or either Company Subsidiary in a manner that results in loss of trade secret protection thereon, except for any such disclosures made as a result of publication of a Patent application filed by the Company or (iv) sell, transfer, license or otherwise encumber any Company Intellectual Property other than through the grant of non-exclusive licenses ancillary to research, development, manufacture, clinical testing, sale, distribution or commercialization activities relating to products or services entered into in the ordinary course of business;
(r) except in connection with any transaction to the extent specifically permitted by any other subclause of this Section 6.01, enter into, terminate or modify in any material respect, or expressly waive or release any material rights under, any Material Contract or any Contract that, if existing on the Agreement Date, would have been a Material Contract;
(i) dischargecommence any clinical study by dosing the first patient in such study, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from commence any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required IND-enabling preclinical study with respect to settlement of a pending Tax claim for no more than 110% of the amountCompany Product, as of the date of this Agreementand (iii) unless mandated by any Regulatory Authority, of the FIN 48 reserves applicable to that claim;
(m) acquire discontinue, terminate, suspend, amend or materially alter modify any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practiceongoing clinical study; or
(ot) authorize, commit or agree or commit to do take any of the foregoingforegoing actions.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries toExcept as contemplated by this Agreement or as described on Schedule 6.1, during the period from the date of this Agreement until the earlier of (i) hereof through the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewithTime, the Company shall, and shall cause each of its the Company Subsidiaries to, use reasonable best efforts conduct its business in the ordinary course consistent with past practice (including with respect to maintain cash management practices, maintenance of working capital levels and estimation of reserves), and will seek to (i) preserve intact its current business organizations and its Subsidiaries' to maintain the value of the business organizationas a going concern, (ii) use commercially reasonable efforts to keep available the services service of its and its Subsidiaries' current officers and employees, employees and to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees lessors and other Persons others having material business relationships dealings with it or and (iii) use commercially reasonable efforts to preserve the goodwill of its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement)business. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by provided in this Agreement or as set forth described on Section 6.01 of Schedule 6.1, during the Company Disclosure Letter, period from the relevance of which disclosure to date hereof through the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawEffective Time, the Company shall not, nor and shall it not permit any of its the Company Subsidiaries to, without the prior written consent of Parent (Parent, which consent shall not be unreasonably delayed or withheld, conditioned or delayed)::
(a) (i) enter into any agreement that would be required (assuming the Company continued to be subject to SEC rules and regulations requiring filing of current and periodic reports under the Exchange Act) to be filed as an exhibit to, or described in, filings made or to be made by the Company with the SEC or (ii) violate, extend, amend or propose to amend its otherwise modify or waive any of the material terms of any Material Contract or any agreement filed with the SEC as an exhibit to any of its Subsidiaries' Charter the Company SEC Documents, or enter into or modify in any material respect any contract that is or would be, if entered into or as so amended, required to be filed with the SEC or set forth in Schedule 4.10;
(b) cause, propose or permit any amendment to the Company Certificate, Company Bylaws or other comparable charter or organizational documents;
(ic) adjustauthorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any shares of any class or any other securities or equity equivalents (including, without limitation, any options or appreciation rights), except for the issuance and sale of shares of Common Stock upon the exercise of Company Options outstanding on the date of this Agreement and in accordance with their present terms;
(d) split, combine, reorganize, recapitalize or reclassify any shares of capital stock or make any like change in any Company Securities or Company Subsidiary Securitiesother voting securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or other distribution (whether in cash, stock, shares or property or otherwiseany combination thereof) or repurchase, redeem or otherwise acquire shares of capital stock or other voting securities, make any other actual, constructive or deemed distribution in respect of, of shares of capital stock or enter into other voting securities or otherwise make any Contract with respect payments to the voting ofstockholders of the Company in their capacity as such;
(e) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parentMerger);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(df) (i) incur or assume any long-term or short-term debt or issue any debt securities, except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract for borrowings under existing prior to the date lines of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made credit in the ordinary course of business consistent business; provided that such borrowing does not exceed $100,000 whether in all material respects with past practice, a single transaction or enter into any new or amend in any material respect, one or more transactions in any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or 21 day period; (ii) hire any new employeesassume, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000guarantee, endorse or (B) to replace existing employees whose employment has terminatedotherwise become liable or responsible, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquirewhether directly, by merger, consolidation, acquisition of stock or assets, contingently or otherwise, or invest infor the obligations of any other person, any business or Person or division thereof or except a Company Subsidiary other than FFPE, LLC and its Subsidiaries, (iii) make any material loans, advances or capital contributions to or investments in any Person other person or (other than the Company iv) sell, transfer, mortgage or one or more pledge any of its or any Company Subsidiaries)’ material assets, in tangible or intangible, or create or suffer to exist any transaction material Lien thereupon, except for Permitted Liens;
(g) pay, discharge, compromise, satisfy, cancel or forgive any debts or claims or rights (or series of transactionsrights, debts or claims) involving, individually or in the aggregate, consideration in excess of $250,000 100,000;
(h) except as may be required by law, enter into, adopt or amend or terminate any bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any director, officer or employee of the Company or any Company Subsidiary in any manner or increase in any manner the aggregatecompensation or fringe benefits of any director, except officer or employee of the Company or any Company Subsidiary or pay any benefit not required by any plan or arrangement as in effect as of the date hereof (including, without limitation, the granting of appreciation rights or performance units); provided, however, that this paragraph (h) shall not prevent the Company or any Company Subsidiary from (A) pursuant to existing Contracts that have been disclosed entering into employment agreements or made available to Parent and severance agreements with employees in the ordinary course of business business; provided any such agreement would not result in material liability to the Company or (B) increasing annual compensation and/or providing for or amending bonus arrangements for non-executive employees in the ordinary course of compensation reviews to the extent that such compensation increases and new or amended bonus arrangements do not result in a material increase in benefits or compensation expense to the Company or any Company Subsidiary;
(i) enter into any agreement providing for the employment or consultancy of any person on a full-time, part-time, consulting or other basis or otherwise providing compensation or other benefits to any officer, director, employee or consultant; hire any person on a full-time, part-time, consulting or other basis or otherwise providing compensation or other benefits to any officer, director, employee or consultant hired on or after the date hereof, if the compensation to be paid and payable on an annualized basis to such person (i) will exceed $100,000, or (ii) together with the compensation to be paid and payable on an annualized basis to all other such persons hired on or after the date hereof, will exceed $500,000;
(j) effect any reduction in force;
(k) acquire, sell, lease or dispose of material property or assets in any single transaction or series of related transactions;
(l) maintain its books and records in a manner other than in the ordinary course of business, consistent with past practice;
(m) except as may be required as a result of a change in Law or in GAAP, change any of the accounting principles or practices used by it;
(Bn) employee loans in respect of any Taxes, make or advances for travelchange any material election, businesschange any accounting method, relocation enter into any closing agreement or settle any material claim or assessment or consent to any extension or waiver of the limitations period applicable to any material claim or assessment except as required by applicable law;
(i) acquire, by merger, consolidation or acquisition of stock or assets, any corporation, partnership or other reimbursable expenses made business organization or division thereof or any equity interest therein or (ii) make or authorize any new capital expenditure or expenditures which in the aggregate are in excess of $500,000; provided, that none of the foregoing shall limit any capital expenditure required pursuant to existing written contracts;
(p) settle or compromise any pending or threatened suit, action or claim (i) which relates to the transactions contemplated hereby or (ii) the settlement or compromise of which would involve a payment in excess of $50,000;
(q) revalue in any material respect any of the assets of the Company or any Company Subsidiary, including, without limitation, writing down the value of inventory or writing-off notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(fr) (i) transferenter into or perform any transaction with, licenseor for the benefit of, sellany officer, leasedirector, sublease, subject to employee or Affiliate of the Company or any Lien Company Subsidiary (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of mergerpayments made to officers, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company directors and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise employees in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventorywith Section 6.1(h), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization);
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (is) enter into any new line term sheet, memorandum of understanding, or contract, whether binding or not, regarding a potential sale or other disposition of part or all of the business conducted directly or make or agree to make any new capital expenditure indirectly by FFPE, LLC;
(t) incur out-of-pocket expenses in excess of $250,000 or thatthe amounts listed in Schedule 6.1(t) in connection with the transactions contemplated hereby relating to financial advisory fees, fees payable to any YUM Brands company, payments to employees triggered by the consummation of the transactions contemplated by this Agreement, proxy solicitation expenses, reimbursement of expenses of a bidder in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;sale process and legal fees; and
(iu) discharge, settle, compromise, assign take or satisfy agree in writing or otherwise to take any material claim, whether of the actions described in Sections 6.1(a) through 6.1(t) or not pending before a Governmental Entity, (i) outside any action which would make any of the ordinary course of business consistent with past practice representations or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations warranties of the Company contained in this Agreement untrue or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingincorrect.
Appears in 1 contract
Samples: Merger Agreement (Worldwide Restaurant Concepts Inc)
Conduct of Business of the Company. The Company shall, and shall cause each Except (a) as described in Section 5.1 of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as expressly permitted under Section 5.2 or Section 5.3, (b) as required by applicable Law (including any reasonable actions after notice has been provided to Parent or Parent’s counsel as may be taken in response to acts or war or sanctions imposed in connection with the prior written consent of Parent (not current dispute involving the Russian Federation and Ukraine, including relating to be unreasonably withheld, conditioned or delayedBelarus), conduct its business (c) as consented to in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action writing by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
) or (ad) amend as required or propose expressly provided for by this Agreement, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, (x) the Company will use and will cause each of its Subsidiaries to amend use its commercially reasonable efforts to conduct its operations in all material respects according to its ordinary and usual course of business consistent with past practice, and the Company will use and will cause each of its Subsidiaries to use its commercially reasonable efforts to preserve intact its business organization and to preserve the present relationships with those Persons having significant business relationships with the Company or any of its Subsidiaries' ; provided, that the Company or any of its Subsidiaries may take such reasonable actions after notice has been provided to Parent or Parent’s counsel as may be taken in response to acts or war or sanctions imposed in connection with the current dispute involving the Russian Federation and Ukraine, including relating to Belarus, and (y) without limiting the generality of the foregoing, the Company will not, and will not permit any of its Subsidiaries to:
(i) adopt any amendments to the Charter Documentsor bylaws (or other similar governing documents) of the Company;
(bii) (i) adjustissue, splitsell, combinegrant rights to purchase, reclassify pledge, or make any like change in authorize or propose the issuance, sale, grant of rights to purchase or pledge, any Company Securities or Company Subsidiary Securities, other than Company Shares issuable with respect to the exercise, vesting or settlement of Company Stock Awards outstanding as of the date hereof or granted in compliance with this Agreement;
(iiiii) repurchase, acquire or redeem or otherwise acquire, or offer to repurchaseacquire or redeem, redeem directly or otherwise acquireindirectly, or amend any Company Securities (Securities, other than in connection with the Convertible Notes as contemplated by satisfaction of exercise price and/or Tax withholding obligations in connection with the terms thereofvesting, settlement and/or exercise of any Company Stock Award or the reacquisition of Company Securities upon any forfeiture or repurchase of any Company Restricted Stock Award;
(iv) split, combine or Company Subsidiary Securities, (iii) reclassify its capital stock or declare, set aside aside, make or pay any dividend or distribution (whether in cash, stock, property stock or otherwiseproperty) in respect of, or enter into on any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities shares of its capital stock (other than dividends from paid to the Company or one of its wholly owned Subsidiaries by a direct or indirect wholly owned Subsidiary of the Company with regard to its parentcapital stock or other equity interests);
(cv) issue(A) acquire, deliverby means of a merger, sellconsolidation, pledgerecapitalization or otherwise, dispose ofany material business, transferassets or securities (other than, modify or encumber any Company Securities or Company Subsidiary Securitiesin each case, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement capital expenditures in accordance with its terms, subclause (xiv) below and (ii) the issuance any acquisition of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) services in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (Bpractice) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, for consideration in excess of $250,000 15,000,000, (B) sell, lease, or otherwise dispose of any material assets of the Company or any of its Subsidiaries with a fair market value in the aggregateexcess of $15,000,000, except (A1) pursuant to Contracts or commitments existing Contracts that have been disclosed as of the date of this Agreement, (2) sales of products or made available to Parent and services in the ordinary course of business consistent with past practice, (3) Incidental Contracts, (4) non-exclusive licenses entered into in the ordinary course of business consistent with past practice, (5) dispositions of marketable securities in the ordinary course of business consistent with past practice, and (6) dispositions or abandonments of immaterial tangible assets in the ordinary course of business and consistent with past practice, or (C) adopt a plan of complete or partial liquidation, dissolution, recapitalization or restructuring;
(vi) incur, assume or otherwise become liable or responsible for any indebtedness for borrowed money;
(vii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (except wholly owned Subsidiaries of the Company) in an amount not to exceed $5,000,000 in the aggregate;
(viii) make any loans, advances (other than for ordinary course business expenses consistent with past practice or pursuant to the Company’s governing documents or existing indemnification obligations) or capital contributions to, or investments in, any other Person (other than wholly owned Subsidiaries of the Company) in excess of $5,000,000, except for advancement of expenses (A) under any indemnification agreement, (B) employee loans the Charter, bylaws or advances for travel, business, relocation similar governing documents of the Company or other reimbursable expenses any of its Subsidiaries or (C) made in the ordinary course of business consistent with past practice;
(fix) change, in any material respect, any financial accounting methods, principles or practices used by it, except as required by GAAP or applicable Law;
(ix) transferchange any annual Tax accounting period, licensemake or change any material Tax election, sellamend any material Tax Return, leasesettle any material Tax claim or assessment, sublease, subject consent to any Lien (extension or waiver of any limitation period with respect to any material Tax claim or assessment, or enter into a closing agreement with any Governmental Authority regarding any material Tax, in each ease, other than Permitted Liens) as required by applicable Law or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationbusiness;
(gxi) repurchaseexcept to the extent required by this Agreement, prepay applicable Law or incur the existing terms of any indebtedness for borrowed money Plan or guarantee Contract: (A) materially increase the compensation or benefits payable or to become payable to any such indebtedness of another Personexecutive officers, issue or sell any debt securities or optionsemployees, warrants, calls individual independent contractors or other rights to acquire any debt securities Service Providers of the Company or any of its Subsidiaries, guarantee (B) amend any debt securities of another PersonPlan, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person establish, adopt, or enter into any new such arrangement having that if in effect on the economic effect of any of the foregoingdate hereof would be a Plan (except for adoptions, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility amendments or terminations in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected do not materially increase costs to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
, and further excluding any offer letters that provide for no severance or change in control benefits), (hC) accelerate the vesting, exercisability or funding under any Plan, (iD) enter into any new line or amend any existing severance, change in control and retention arrangements with any Service Providers, or (E) terminate (other than for cause or due to death or disability) the employment of or hire any employee with a title of Vice President or above or who is eligible to earn an annualized base salary, wage, fees or equivalent base compensation greater than $150,000, except in the ordinary course of business to replace employees in such roles who have terminated employment;
(xii) enter into any collective bargaining or similar labor Contract or (B) effectuate or announce any plant closing, mass layoff, furlough or other event affecting in whole or in part any site of employment, facility, office, or operating unit that would require advance notice under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable law (individually and collectively, as applicable, the “WARN Act”) or that would result in material liability or obligation to the Company or any of its Subsidiaries under the WARN Act;
(xiii) make or agree to make authorize any new material capital expenditure or incur any obligations, Liabilities or indebtedness in excess of $250,000 or thatrespect thereof, in the aggregate, are in excess of $500,000, other than except for (A) as those contemplated by the Company's capital expenditure budgetbudget for the relevant fiscal year, which capital expenditure budget has been provided or made available to Parent, or Parent prior to the date of this Agreement and (B) any unbudgeted capital expenditure, in an amount not to exceed, in any year, in the ordinary course aggregate, $10,000,000;
(xiv) settle any suit, action, claim, proceeding or investigation other than as contemplated by Section 6.10 or a settlement solely for monetary damages (net of business consistent with past practice, insurance proceeds received) not in excess of $5,000,000 individually or $10,000,000 in the aggregate;
(iixv) except in the ordinary course of business consistent with past practicepractice or in connection with any transaction to the extent specifically permitted by any other subclause of this Section 5.1, (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract; or (B) materially modify, materially amend or terminate (other than expirations in accordance with its terms) any Company Material Contract or waive, release or assign any material rights or material claims thereunder or thereunder; provided, that any Material Contract (iiix) dispose of, grant, obtain or permit to lapse any material Company IPdescribed by the definition set forth in Section 3.18(a)(viii) shall be exclusively governed by Section 5.1(v) and (y) described by the definition set forth in Section 3.18(a)(ix) shall be exclusively governed by Section 5.1(vi);
(ixvi) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside except in the ordinary course of business consistent with past practice or in the reasonable business judgment of the Company or any of its Subsidiaries, license, sell, transfer, dispose of, abandon, cancel, knowingly allow to lapse, or fail to use commercially reasonable efforts to renew, maintain or defend any material Company Registered Intellectual Property Rights; or
(iixvii) relating to offer, agree or arising from any securities class action claims or related derivative claimscommit, in each case except writing or otherwise, to take any of the extent such claim foregoing actions. Notwithstanding the foregoing, nothing in this Agreement is fully covered by intended to give Parent or Merger Sub, directly or indirectly, the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment right to control or satisfaction of such claim would not result in the imposition of any material restriction on direct the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in at any time prior to the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii)Effective Time. Prior to the Effective Time, (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letterand its Subsidiaries shall exercise, extend or waive consistent with the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date terms and conditions of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of complete control and supervision over their own business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingand operations.
Appears in 1 contract
Conduct of Business of the Company. The Company shallExcept as expressly permitted by this Agreement or as Parent may otherwise consent to or approve in writing (delivered personally, by facsimile or email) on and shall cause each of its Subsidiaries toafter the date hereof and prior to the Closing Date, during the period from the date of this Agreement until the earlier of (i) to the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the BoardTime, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or shall operate in the Ordinary Course of Business and in compliance with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and applicable Laws and regulations and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use commercially reasonable best efforts to maintain and preserve intact its and its Subsidiaries' current business organization, to keep available the services of its and its Subsidiaries' current officers and other employees, to preserve its cash, and to preserve its Subsidiaries' present relationships with those persons having business dealings with it, including vendors and goodwill with customers. Furthermore, suppliersthe Company covenants, lessorsrepresents and warrants that from and after the date hereof, distributorsunless Parent shall otherwise expressly consent in writing (delivered personally, licensorsby facsimile or email), licensees the Company shall use its commercially reasonable efforts to: (i) keep in full force and effect insurance comparable in amount and scope of coverage to insurance now carried by it; and (ii) pay all accounts payable and other Persons having material business relationships obligations, when they become due and payable, in the Ordinary Course of Business consistent with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision provisions of this Agreement), except if the same are contested in good faith, and, in the case of the failure to pay any material accounts payable or other obligations which are contested in good faith, only after consultation with Parent. Without Except as set forth on Schedule 5.1, without limiting the generality of the foregoingforegoing (but subject to the above exceptions), between during the period from the date of this Agreement and to the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, not without the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed or conditioned and shall be deemed to have been duly given if delivered personally, facsimiled or delayed):emailed) the Company shall not:
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend dividends on, or distribution (whether in cash, stock, property or otherwise) make any other distributions in respect of, any of its Shares or enter into any Contract with other equity interests, (ii) split, combine or reclassify any of its Shares or any other equity interests or issue or authorize the issuance of any other securities in respect to the voting of, in lieu of or in substitution for any Company Securities of its Shares or Company Subsidiary Securities (any other than dividends from a direct or indirect wholly owned Subsidiary equity interests, except for issuances of capital stock upon the exercise of options outstanding as of the Company date hereof in accordance with their present terms, (iii) purchase, redeem or otherwise acquire any Shares or any other securities thereof or any rights, warrants or options to its parent)acquire any such shares or other securities or (iv) make any other actual, constructive or deemed distribution in respect of any Shares or other equity interests or otherwise make any payments to Stockholders in their capacity as such;
(cb) issue, deliver, sell, pledgepledge or otherwise encumber or subject to any Lien any Shares, dispose of, transfer, modify any other voting securities or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of interests or any Warrant that is outstanding as of the date of this Agreementsecurities convertible into, or any rights, warrants or options to acquire, any such Shares, voting securities or other equity interests or convertible securities;
(ivc) the issuance amend its certificate of shares of Company Common Stock upon the conversion of Convertible Notesincorporation or bylaws or organizational documents;
(d) (i) except as required acquire or agree to acquire by applicable Law merging or required consolidating with, or permitted by purchasing a substantial portion of the stock or assets of, or by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parentother manner, increase the compensation payable or that could become payable by the Company any business or any of its Subsidiaries to directors or officersPerson and, other than increases in compensation made in without limiting the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as generality of the date of this Agreementforegoing, or make shall not create any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that Subsidiary of the employee replacedCompany;
(e) acquiresell, by mergerlease, consolidationlicense, acquisition mortgage or otherwise encumber or subject to any Lien or otherwise dispose of stock any of the Property (including securitizations), other than in the Ordinary Course of Business;
(f) incur any Indebtedness for borrowed money or assetsissue any debt securities, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to to, or investments in in, any Person (Person, other than in the Company or one or more Ordinary Course of its Subsidiaries), Business and in any transaction or series of transactions, an amount not in excess of $250,000 20,000 in the aggregate;
(g) assume, guarantee or endorse the obligations of any other Person, indemnify any other person, issue any support guarantees or otherwise become responsible for the obligations of any Person;
(h) make any capital expenditure or expenditures that exceed $50,000 individually or $100,000 in the aggregate, except (A) pursuant as required by a Contract required to existing Contracts that have been be disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practiceon Schedule 2.12;
(f1) make any material Tax election; (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii2) adopt any Tax accounting method that is inconsistent with elections made, positions taken or effect a plan of complete methods used in preparing or partial liquidation, dissolution, restructuring, recapitalization filing similar Tax Returns in prior periods; (3) file any amended Tax Returns or other reorganization;
claims for Tax refunds; (g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i4) enter into any new line of business closing agreement related to any material Tax; (5) settle or make compromise any material Tax claim, audit or agree assessment; (6) surrender any right to make any new capital expenditure claim a material Tax refund, offset or other reduction in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, Tax liability; or (B7) in consent to any extension or waiver of the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign limitations period applicable to any material rights Tax claim or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiumsassessment;
(j) except as required under an existing Plan, (i) grant or commit to grant any employee, Stockholder, officer, director or agent any increase in wages, bonus, severance, profit sharing, retirement, insurance or other compensation or benefits (other than an increase in wages in the Ordinary Course of Business), (ii) amend or terminate any Plan, except to the extent necessary to comply with applicable Law, (iii) establish any new compensation or benefit plan or arrangement, or (iv) enter into any Contract employment, consulting, retention, termination, severance or collective bargaining agreement (other than at-will offer letters to new-hires in the Ordinary Course of a type referenced in clause (ii), (iii), (iv), (v) Business that do not provide for any severance or (viii) of Section 4.13(aother post-termination benefit and/or grant any equity or equity-based awards and which have been disclosed to Parent);
(k) make take, or agree to commit to take, any material change action that would or is reasonably likely to result in the acceleration of vesting or a right to exercise any method options or warrants (other than as approved by Parent or to effect the amended vesting dates of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Lawcertain Restricted Shares as specifically set forth on Schedule 2.3(c));
(l) makerevalue any of its assets, revoke including, without limitation, writing down the value of inventory or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting writing-off notes (other than as described set forth on Section 4.06(fSchedule 5.1(l)) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or accounts receivable other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change than in the Tax compliance practices Ordinary Course of the Company, except that no consent shall be Business or as required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claimby GAAP;
(m) acquire enter into any contract or materially alter agreement, other than in the Ordinary Course of Business, or amend in any Owned Real Estate or material respect any Ground Leased Real Estateof the Contracts other than in the Ordinary Course of Business;
(n) 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 Business of liabilities reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course of Business since the date of the Balance Sheet;
(o) settle or compromise any pending or threatened suit, action or claim relating to the transactions contemplated hereby;
(p) enter into any Store Leases agreement or arrangement that would limit or restrict the Surviving Company and its Affiliates (including Parent) or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(q) terminate or amend in any material respect any contract listed on Schedule 2.12 or Schedule 2.14(c);
(r) sell, transfer or grant any license with respect to Intellectual Property of the Company other than non-exclusive licenses granted in the ordinary course Ordinary Course of Business, or fail to make any filing, pay any fee or take any other action necessary to maintain the existence, validity and ownership by the Company of any material Intellectual Property owned by the Company;
(s) fail to pay any fee, make any filing or take any action necessary to maintain the ownership or right to use or otherwise exploit any Intellectual Property that is material to the business consistent in all of the Company;
(t) abandon, or lose the right to use or otherwise exploit any Intellectual Property material respects with past practiceto the business of the Company; or
(ou) agree authorize, or commit or agree to do take, any of the foregoingforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Ixia)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries toExcept as contemplated by this Agreement or the Ancillary Agreements, during the period from the date of this Agreement to the consummation of the Offer and, if Parent has made a prompt request therefor pursuant to Section 1.4 hereof, until the earlier of its Designated Directors (ias defined in Section 8.4 hereof) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least constitute in their entirety a majority of the BoardCompany's Board of Directors, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or and its Subsidiaries (other than Spinco and the Spinco Companies (as required by applicable Law or with defined in the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayedDistribution Agreement), ) will each conduct its business in all material respects in the operations according to its ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments practice, will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of use its Subsidiaries to, use commercially reasonable best efforts to maintain and (i) preserve intact its and its Subsidiaries' business organization, to (ii) maintain its material rights and franchises, (iii) keep available the services of its and its Subsidiaries' current officers and key employees, and (iv) keep in full force and effect insurance comparable in amount and scope of coverage to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach maintained as of the foregoing unless such action would constitute a breach date hereof (collectively, the "ORDINARY COURSE OBLIGATIONS"); provided, that Spinco and the Spinco Companies shall comply with the Ordinary Course Obligations to the extent that non-compliance therewith could adversely affect the Retained Business or adversely affect (or materially delay) the consummation of such other provision of this Agreement)the Offer, the Merger or the Spin-Off. Without limiting the generality of and in addition to the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted contemplated by this Agreement or as set forth on Section 6.01 of the Ancillary Agreements, prior to the time specified in the preceding sentence, neither the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to(other than Spinco and the Spinco Companies insofar as any action of the type specified below could not adversely affect the Retained Business and could not adversely affect (or materially delay) the Offer, the Spin-Off or the Merger) will, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
Parent: (a) amend its charter or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (by-laws other than filing a Certificate of Amendment of the Convertible Notes Company's Restated Certificate of Incorporation as contemplated by the terms thereofRights Agreement; (b) authorize for issuance, issue, sell, deliver or Company Subsidiary Securitiesagree or commit to issue, (iii) declare, set aside sell or pay any dividend or distribution deliver (whether in cashthrough the issuance or granting of options, stockwarrants, property commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities (except by the Company in respect ofconnection with Stock Options, or enter into any Contract with respect pursuant to the voting of, Rights Agreement as contemplated by the Distribution Agreement or pursuant to the current terms of any Company Securities existing Plan) or Company Subsidiary Securities amend any of the terms of any such securities or agreements (other than dividends from a direct such securities or indirect wholly owned agreements of any Subsidiary other than any of the Company to its parent);
(c) issueRetained Subsidiaries, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as amendments of the date of this Distribution Agreement in accordance with its terms, (iias permitted thereunder) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoing.23
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, agrees that during the period from the date of this Agreement until the earlier of (i) to the Effective Time (unless Eastern shall otherwise agree in writing, which consent shall not be unreasonably withheld or delayed, and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted otherwise contemplated by this Agreement), as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent will, and will cause each of Parent (not to be unreasonably withheld, conditioned or delayed)its Subsidiaries to, conduct its operations according to its ordinary and usual course of business consistent with past practice in compliance in all material respects in the ordinary course of businesswith all applicable Laws, consistent with past practice pay its debts and taxes when due (including with respect subject to future purchase commitments for each of the Company's brands; provided that good faith disputes over such future purchase commitments will be reduced appropriately to account for any planned store closures) debts), pay or perform other material obligations when due, and, to the extent consistent therewith, with no less diligence and effort than would be applied in the Company shall, and shall cause each absence of its Subsidiaries tothis Agreement, use commercially reasonable best efforts to maintain and preserve intact its and its Subsidiaries' current business organizationorganizations, to keep available the services service of its and its Subsidiaries' current officers and employees, to employees and preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees suppliers and other Persons others having material business relationships dealings with it to the end that goodwill and ongoing businesses shall not be impaired in any material respect at or its Subsidiaries (it being agreed and understood that no action by prior to the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement)Effective Time. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by in this Agreement Agreement, or as set forth on in Section 6.01 4.1 of the Company Disclosure LetterSchedule, the relevance of which disclosure prior to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-referenceEffective Time, or as required by applicable Law, neither the Company shall not, nor shall it permit any of its Subsidiaries towill, without the prior written consent of Parent (Eastern, which consent shall not be unreasonably withheld, conditioned withheld or delayed)::
(a) amend except for shares to be issued or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary delivered upon exercise of the Company to its parent);
(c) Options outstanding as of the date hereof in accordance with the Option Plans or other Option-related agreements or Warrants outstanding as of the date hereof in accordance with their respective terms, issue, deliver, sell, pledge, dispose of, transferpledge or otherwise encumber, modify or encumber any Company Securities authorize or Company Subsidiary Securitiespropose the issuance, sale, disposition or pledge or other than encumbrance of (i) the issuance of any additional shares of Company Common Stock upon the exercise capital stock of any Company Equity Award outstanding as class (including the Shares), or any securities or rights convertible into, exercisable or exchangeable for, or evidencing the right to subscribe for any shares of capital stock, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of capital stock or any securities or rights convertible into, exchangeable for, or evidencing the date right to subscribe for, any shares of this Agreement in accordance with its termscapital stock, or (ii) any other securities in respect of, in lieu of, or in substitution for, Shares outstanding on the issuance date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem, purchase or otherwise acquire, any of its outstanding shares of Company Common Stock capital stock;
(c) split, combine, subdivide or reclassify any shares of capital stock or declare, set aside for payment or pay any dividend, or make any other actual, constructive or deemed distribution in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of any shares of Company Common Stock upon exercise of capital stock or otherwise make any Warrant that is outstanding payments to shareholders in their capacity as of such, except for “upstream” dividends paid by a Subsidiary to the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible NotesCompany;
(d) (i) except as required by applicable Law adopt a plan of complete or required partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or permitted by any Company Employee Plan or written Contract existing prior to the date other reorganization of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, (other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replacedMerger);
(e) acquireadopt any amendment, modification or repeal, or propose to, or permit or consent to, any amendment, modification or repeal of the Company Certificate of Incorporation or Bylaws (or the equivalent Subsidiary Organizational Documents) or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of the Company’s Subsidiaries;
(f) make any acquisition, by means of merger, consolidation, acquisition of all or substantially all of the assets, capital stock or assetsequity interests, or otherwise, or invest inof any Person, any business or Person or division thereof or make any loansdisposition or assignment, advances of any of its capital stock, material assets or capital contributions properties or permit any of its assets or properties to or investments in be subject to any Person Liens (other than the Company or one or more of its SubsidiariesPermitted Liens), in any transaction except to the extent such disposition or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed Lien is made or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made incurred in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness Indebtedness for borrowed money or guarantee any such indebtedness of another PersonIndebtedness, issue or sell make any debt securities loans, advances or optionscapital contributions to, warrantsor investments in, calls any other Person other than to or other rights to acquire any debt securities of in the Company or any of its Subsidiaries, guarantee any debt securities of another Person, or enter into any “keep well” or other Contract agreement to maintain any financial statement condition of any other another Person or enter into any arrangement having the economic effect of any of the foregoing), other thanexcept, in each case, borrowings and repayments under to the Company's existing revolving credit facility extent such Indebtedness is made or incurred in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiariespractices;
(h) grant any increases (other than as required by Law) in the compensation, pension, retirement or other employment benefit of any character, or grant any new material benefit to any of its directors, officers or employees, except for increases in compensation for employees who are not officers in the ordinary course of business and in accordance with past practice;
(i) pay or agree to pay any pension, retirement allowance or other employee benefit with respect to its directors, employees, agents or consultants not required or contemplated by any of the existing Company Plans as in effect on the date hereof;
(j) enter into any new line new, or amend any existing, employment, severance, change of business control or make termination agreement with any director, officer, consultant, agent or agree employee;
(k) except as may be required to make comply with applicable Law, become obligated under any new capital expenditure pension plan, welfare plan, multiemployer plan, employee benefit plan, severance plan, benefit arrangement or similar plan or arrangement, which was not in excess existence on the date hereof, or amend any such plan or arrangement in existence on the date hereof if such amendment would have the effect of $250,000 enhancing of any benefits thereunder;
(l) change or thatremove the certified public accountants for the Company or change any of the accounting methods, in the aggregatepolicies, are in excess of $500,000procedures, other than (A) as contemplated practices or principles used by the Company's capital expenditure budget, which has been provided Company unless required by GAAP or made available to Parentthe SEC;
(m) enter into, or (B) become obligated under, or change, amend, terminate or otherwise modify any Material Contract), except, in the ordinary course of business consistent with past practicepractices;
(n) modify the terms of, (ii) discount, setoff or accelerate the collection of, any accounts receivable, except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(io) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (pay accounts payable and other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases obligations and liabilities other than in the ordinary course of business consistent with past practice;
(p) fail to maintain in all material respects inventory levels appropriate for the businesses of the Company and each of its Subsidiaries;
(q) make or commit to make aggregate capital expenditures in excess of $100,000;
(r) settle any material pending claim or other material disagreement resulting in any payment of an amount in excess of $50,000 in the aggregate as to all such claims or disagreements;
(s) grant any Lien on the capital stock of the Company or any of its Subsidiaries except for a Permitted Lien;
(t) enter into, directly or indirectly, any new material transaction with any Affiliate of the Company (excluding transactions with the Subsidiaries in the ordinary course of business and consistent with past practice), including, without limitation, any transaction, agreement, arrangement or understanding that would be required to be reported as a Certain Relationship or Related Transaction or similar relationship or transaction pursuant to Statement of Financial Accounting Standards No. 57, or in any SEC filing pursuant to Item 404 of Regulation S-B;
(u) take, undertake, incur, authorize, commit or agree to take any action that would cause any of the representations or warranties in Section 2 to be untrue in any material respect or would reasonably be anticipated to cause any of the conditions to closing set forth in Section 5 not to be satisfied in any material respect; or
(ov) agree authorize, recommend, propose or commit 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 1 contract
Samples: Merger Agreement (Netmanage Inc)
Conduct of Business of the Company. The Company shall, From and shall cause each of its Subsidiaries to, during the period from after the date of this Agreement until and prior to the earlier of the Effective Time or the termination of this Agreement pursuant to Article VII, except (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted contemplated by this Agreement, (ii) as set forth on in Section 6.01 to 5.1 of the Company Disclosure Letter or Letter, (iii) to comply with any COVID-19 Measures, (iv) as required by applicable Law or policy or guidance from a Governmental Authority, (v) for any action (including cessation of activities) taken by the Company or any of its Subsidiaries that the Company or such Subsidiary, after reasonable consultation with Parent, reasonably believes is required in order to protect the health, safety and welfare of the officers and employees of any of the Businesses and all other individuals having business dealings with any of the Businesses, or (vi) with the prior written consent of Parent (Parent, such consent not to be unreasonably withheld, conditioned delayed or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewithconditioned, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to maintain and preserve intact conduct its and its Subsidiaries' business organization, to keep available operations only in the services ordinary course of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement)business. Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except (i) as otherwise expressly permitted contemplated by this Agreement or Agreement, (ii) as set forth on in Section 6.01 5.1 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declareto comply with any COVID-19 Measures, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as otherwise required by applicable Law or required policy or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parentguidance from a Governmental Authority, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take (v) for any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as (including cessation of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required activities) taken by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities after reasonable consultation with Parent, that the Company or such Subsidiary reasonably believes is required in order to protect the health, safety and welfare of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect officers and employees of any of the foregoing, Businesses and all other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of individuals having business consistent dealings with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to ParentBusinesses, or (Bvi) in with the ordinary course prior written consent of business consistent with past practiceParent, (ii) except in the ordinary course of business consistent with past practicesuch consent not to be unreasonably withheld, modifydelayed or conditioned, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of and after the date of this Agreement, Agreement and prior to the earlier of the FIN 48 reserves applicable Effective Time or the termination of this Agreement pursuant to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in Article VII, the ordinary course Company shall not, and shall cause each of business consistent in all material respects with past practice; or
(o) agree or commit to do its Subsidiaries not to, take any of the foregoing.following actions:
Appears in 1 contract
Conduct of Business of the Company. The Except (i) as otherwise expressly provided in this Agreement, (ii) as consented to in writing by Parent, or (iii) with respect to or in connection with the consummation of the Storage USA Acquisition, or as contemplated by the Storage USA Transaction Agreements and the merger contemplated thereby (it being understood and agreed that the Company shallshall not increase the price to be paid in connection with the Storage USA Acquisition or make any material change to the Storage USA Transaction Agreements or grant any material waiver, and consent or election thereunder, except with Parent's consent, provided further that Parent shall cause each be deemed to have consented to any such proposed price increase or material change, waiver, consent or election, as the case may be, if Parent has not responded to the Company's request for consent pursuant to this Section 5.1(iii) within 24 hours of its Subsidiaries tothe delivery of such request), during the period from the date of this Agreement until the earlier of (i) hereof to the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the BoardTime, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with will, and will cause each of its subsidiaries to, and will use commercially reasonable efforts to cause the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed)Public Investees to, conduct its business in all material respects their respective operations in the ordinary and usual course of business, business consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, with no less diligence and effort than would be applied in the Company shallabsence of this Agreement, and shall cause each of its Subsidiaries to, use reasonable best efforts seek to maintain and preserve intact its and its Subsidiaries' their respective current business organizationorganizations, seek to keep available the services of its and its Subsidiaries' their respective current officers and employees, employees and seek to preserve its and its Subsidiaries' present their respective relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees suppliers and other Persons others having material business relationships dealings with it or its Subsidiaries (it being agreed to the end that goodwill and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 ongoing businesses shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement)unimpaired. Without limiting the generality of the foregoing, between the date of this Agreement and but subject to clauses (i) through (iii) above, prior to the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawSchedule, the Company shall will not, and will use commercially reasonable efforts to cause the Public Investees not to, nor shall it permit any of its Subsidiaries subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed)::
(a) amend their respective charters or propose to amend its bylaws (or any of its Subsidiaries' Charter Documentsother similar governing instrument);
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities convertible into or exchangeable for any stock or any equity equivalents (including any stock options or stock appreciation rights), except for (i) adjustthe issuance or sale of Shares pursuant to the exercise of Company Stock Options and conversion of Preferred Stock and the Company's 6.5% Convertible Subordinated Debentures due 2016 in accordance with the terms thereof (for a number of Shares not to exceed the maximum number of Shares set forth in Section 2.2), split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer (A) automatic grants of Company Stock Options to repurchase, redeem or otherwise acquire, any directors of the Company Securities (other than in accordance with plan terms in effect on the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securitiesdate hereof, (iiiB) the grant of new Company Stock Options upon the exercise of outstanding Company Stock Options containing a reload feature requiring a new option grant upon such exercise, (C) the grant of options, in the ordinary course consistent with past practice by subsidiaries of the Company or (D) the grant of Restricted Stock Units pursuant to the Company's matching share program;
(i) split, combine or reclassify any shares of their respective stock; (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) in respect ofof their respective stock, or enter into any Contract with respect to except the voting of, any Company Securities or Company Subsidiary Securities (other than declaration and payment of regular quarterly cash dividends from a direct or indirect wholly owned Subsidiary not in excess of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) dividend amounts provided for in the issuance of shares of Company Common Stock upon instrument defining the exercise of any Company Equity Award outstanding as rights of the date of this Agreement Preferred Stock, with usual record and payments dates in accordance with its termspast dividend practice; (iii) make any other actual, (ii) the issuance of shares of Company Common Stock constructive or deemed distribution in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of any shares of Company Common Stock upon exercise of their respective stock or otherwise make any Warrant that is outstanding payments to stockholders in their capacity as of the date of this Agreement, such; or (iv) the issuance redeem, repurchase or otherwise acquire any of shares their respective securities or any securities of Company Common Stock upon the conversion any of Convertible Notestheir respective subsidiaries;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(ge) repurchasealter, prepay through merger, liquidation, dissolution, reorganization, restructuring or in any other fashion, their respective corporate structures or ownership of any subsidiary or joint venture;
(f) (i) incur or assume any indebtedness for borrowed money long-term or guarantee any such indebtedness of another Person, short-term debt or issue or sell any debt securities or optionssecurities, warrants, calls or other rights to acquire any debt securities except for borrowings under existing lines of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary and usual course of business consistent with past practicepractice in aggregate amounts not to exceed $50 million other than in connection with the Storage USA Acquisition and in connection with the other transactions listed in Section 5.1(f) of the Company Disclosure Schedule (which, notwithstanding anything to the contrary herein, shall be expressly permitted hereby); (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 and usual course of business consistent with past practice and in aggregate amounts not to exceed $50 million; (iii) make any capital contributions to, or take investments in, any action (other person, other than to the entry into this Agreement and the other Company Transaction Documentswholly owned subsidiaries; (iv) that would reasonably be expected to result in any material amendment, modification pledge or adverse change to any term of, or material default under, any material indebtedness otherwise encumber shares of stock of the Company or its subsidiaries; or (v) mortgage or pledge any of its Subsidiariestheir respective material assets, tangible or intangible, or create or suffer to exist any material Lien thereupon;
(hg) except as may be required by Law, an existing agreement or as contemplated by this Agreement, (i) enter into into, adopt or amend or terminate any new line bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, performance unit, stock equivalent, stock purchase agreement, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund, award or other arrangement for the benefit or welfare of any director, officer or employee in any manner except for any such actions taken in the ordinary and usual course of business or make or agree to make any new capital expenditure in excess of $250,000 or consistent with past practice and that, in the aggregate, are do not result in excess of $500,000, other than (A) as contemplated by a material increase in the Company's capital expenditure budgetaggregate benefits and compensation expense, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, and (ii) except increase in any manner the ordinary course compensation or fringe benefits of business consistent any director or officer of the Company or pay any benefit not required by any plan and arrangement as in effect as of the date hereof or as modified in accordance with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material this subsection (g) (including the granting of stock appreciation rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IPperformance units);
(ih) dischargeacquire, settlesell, compromise, assign lease or satisfy dispose of any material claim, whether or not pending before a Governmental Entity, (i) assets outside the ordinary and usual course of business consistent with past practice or any assets which individually or in the aggregate have a book or fair market value in excess of $3,000,000, enter into any commitment or transaction outside the ordinary and usual course of business consistent with past practice or grant any exclusive distribution rights other than with respect to the disposition of the Company's right, title and interest in and to 19,403,417 shares of CarrAmerica Realty Corporation, a Maryland real estate investment trust, which shall be specifically permitted hereunder regardless of any other provision hereof;
(i) except as may be required as a result of a change in Law or in GAAP, change any of the accounting principles or practices used by them (whether for financial accounting or Tax purposes);
(j) revalue in any material respect any of their respective assets, including writing-off notes or accounts receivable or modify in any material respect any reserve, in each case, other than in the ordinary and usual course of business consistent with past practice or as required by GAAP;
(a) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or any equity interest therein; (b) enter into any contract or agreement, other than in the ordinary and usual course of business consistent with past practice or amend in any material respect any of the Material Contracts or the policies referred to in Section 3.18; (c) authorize any new capital expenditure or expenditures which are in excess of those contemplated the budgets previously provided by the Company to Parent; or (iv) enter into or amend any contract, agreement, commitment or arrangement providing for the taking of any action that would be prohibited hereunder;
(l) make or revoke any Tax election (except as required by law), or settle or compromise any Tax liability, material to the Company and its subsidiaries taken as a whole (taking into account only the Company's actual ownership interest in each of its subsidiaries), or change (or make a request to any taxing authority to change) any material aspect of their respective method of accounting for Tax purposes;
(m) 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 in the ordinary and usual course of business consistent with past practice of liabilities reflected or reserved against in the consolidated financial statements of such person and its subsidiaries or incurred in the ordinary and usual course of business consistent with past practice or waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement to which such person or any of its subsidiaries is a party;
(n) settle or compromise any pending or threatened suit, action or claim relating to the Merger;
(o) enter into any agreement or arrangement that limits or otherwise restricts such person or any of its subsidiaries or any successor thereto or that would, after the Effective Time, limit or restrict the Surviving Corporation and its affiliates (including Parent) or any successor thereto, from engaging or competing in any line of business or in any geographic area;
(p) in any case where the Company, as such, has a contractual right to consent to any matter requested or proposed by Storage USA or Regency, the company shall not so consent without Parent's consent, which shall not be unreasonably withheld or delayed;
(q) take, propose to take, or agree in writing or otherwise to take, any of the actions described in Sections 5.1(a) through 5.1(n) or any action which would make any of the representations or warranties of the Company contained in this Agreement (i) which are qualified as to materiality untrue or incorrect or (ii) relating which are not so qualified untrue or incorrect in any material respect. For purposes of this Agreement, the Company shall be deemed to have used its commercially reasonable efforts to cause the Public Investees to take or arising from not take any securities class action claims or related derivative claimsactions contemplated herein if the Company (i) exercises all voting rights, in each case except to the extent such claim is fully covered by that the Company's insurance policies (other than taking or not taking of any applicable deductible), but only if action requires a vote of the discharge, settlement, compromise, assignment or satisfaction stockholders of such claim would not result in the imposition of Public Investee, (ii) exercises all rights under any material restriction on the business contract or operations of agreement to which the Company or any of its Subsidiaries or Affiliates or subsidiaries is a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii)party, and (iii), (iv), (v) causes its representatives acting as members of the board of directors or (viii) trustees of Section 4.13(a);
(k) make any material change in any method of financial accounting principles such Public Investees subject to their fiduciary duties to such Public Investees or practices, in each case except for any such change required by a change in GAAP or trustees and their shareholders under applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method to exercise all rights as directors of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amountsuch Public Investee, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingapplicable.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of (i) the Effective Time termination of this Agreement or the Closing, the Company and (ii) the first date on which Parent shall have exercised rights under Section 1.03 Sellers agree to designate at least a majority operate the business of the BoardCompany and its Subsidiaries, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the extent that Purchaser shall provide its prior written consent consent, in the usual, regular and ordinary course in substantially the same manner as heretofore conducted. The Company and the Sellers further agree to pay the debts and Taxes of Parent (the Company and its Subsidiaries when due, to pay or perform other obligations when due, and use their best efforts to preserve intact the Company's and its Subsidiaries' present business organizations, keep available the services of the Company's and its Subsidiaries' present officers and key employees and preserve the Company's and its Subsidiaries' relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it. The Company and the Sellers shall promptly notify Purchaser of any event or occurrence or emergency not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each business of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or any Subsidiary and any material event involving the Company or any Subsidiary. The Company, the Sellers and its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):Purchaser:
(a) amend make any expenditures or propose to amend its enter into any commitment or transaction exceeding $50,000 individually or $150,000 in the aggregate or any commitment or transaction of its Subsidiaries' Charter Documentsthe type described in Section 2.9 hereof;
(b) enter into or materially amend any Contract pursuant to which any other party is granted marketing, distribution, development or similar rights of any type or scope with respect to any products or technology of the Company or any Subsidiary or enter into any other Contract which would have been required to have been disclosed on Section 2.14 of the -34- Company Disclosure Schedule had such contract been entered into prior to the date hereof, unless otherwise permitted by this Article V;
(ic) adjustmaterially amend or otherwise materially modify (or agree to do so), splitor violate the terms of, combineany of the Contracts set forth or described in the Company Disclosure Schedule;
(d) commence or settle any litigation (provided, reclassify that the Company shall seek in good faith to resolve, subject to Purchaser's approval of any settlement or other resolution, such pending litigation related to patent and employment matters to which it is a party as of the date hereof) other than for collection of debts in the ordinary course of business;
(e) declare, set aside, or pay any dividends on or make any like change other distributions (whether in cash, stock or property) in respect of any Company Securities Capital Stock, or split, combine or reclassify any Company Subsidiary SecuritiesCapital Stock or issue or authorize the issuance of any other securities in respect of, (ii) in lieu of or in substitution for shares of Company Capital Stock, or repurchase, redeem or otherwise acquire, directly or offer to repurchase, redeem or otherwise acquireindirectly, any shares of Company Securities Capital Stock (or options, warrants or other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parentrights exercisable therefore);
(cf) issue, delivergrant, selldeliver or sell or authorize or propose the issuance, pledgegrant, dispose delivery or sale of, transferor purchase or propose the purchase of, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise capital stock of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any securities convertible into, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue or purchase any such shares or other convertible securities;
(g) cause or permit any amendments to the Company Charter Documents (except to eliminate preemptive rights);
(h) acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity securities 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 which are material, individually or in the aggregate, to the Company's business;
(i) sell, lease, license or otherwise dispose of any of its properties or assets, including the sale of any accounts receivable of the Company or its Subsidiaries to directors or officers, other than increases in compensation made except for sales of products in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replacedbusiness;
(ej) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a)others;
(k) make grant any material change in loans to others or purchase debt securities of others or amend the terms of any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Lawoutstanding loan agreement;
(l) makegrant any severance or termination pay (in cash or otherwise) to any Employee, revoke or amend including any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Companyofficer, except that no consent shall be required with respect pursuant to settlement of a pending Tax claim for no more than 110% of the amount, contract or agreement disclosed in Section 2.14 hereof and identified as of the date of this Agreement, of the FIN 48 reserves applicable to that claima severance agreement;
(m) acquire adopt or materially alter amend any Owned Real Estate Company Employee Plan, enter into any employment contract, pay or agree to pay any Ground Leased Real Estatespecial bonus or special remuneration to any director or Employee, increase the salaries, wage rates, or other compensation of its Employees, or grant any stock-related award (whether payable in cash, shares or otherwise);
(n) enter into revalue any Store Leases of its assets (whether tangible or intangible), including writing down the value of inventory or writing off notes or accounts receivable other than in the ordinary course of business;
(o) pay, discharge or satisfy, in an amount in excess of $20,000 in any one case, or $50,000 in the aggregate, any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment (when due), discharge or satisfaction (when due) in the ordinary course of business;
(p) make or change any material election in respect of Taxes, adopt or change any accounting method in respect of Taxes, enter into any closing agreement, settle any material claim or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(q) enter into any licensing (other than non exclusive end user licenses in the ordinary course of business consistent and on standard terms and conditions), distribution, joint venture, strategic alliance or joint marketing or any similar arrangement or agreement;
(r) hire or terminate any Employees (other than the termination of any Employee for cause after notice to and consultation with Purchaser), or encourage any Employees to resign from the Company;
(s) enter into any new leases, including but not limited to real estate and equipment leases;
(t) amend, otherwise modify or violate the terms of, any of the agreements set forth or described in all material respects with past practicethe Company Disclosure Schedule;
(u) enter into any transaction not in the ordinary course of business without the express written approval of Purchaser; or
(ov) take, or agree in writing or commit otherwise to do take, any of the foregoingactions described in Sections 5.1(a) through Section 5.1(v) hereof, or any other action that would (i) prevent the Company from performing, or cause the Company not to perform, its covenants hereunder or (ii) cause or result in any of its representations and warranties contained herein being untrue or incorrect.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date of this Agreement until the earlier of (i) the termination of this Agreement and the Effective Time Time:
(a) The Company will, and (ii) will cause each of its Subsidiaries to, use reasonable best efforts to conduct its business in the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority ordinary course of the Boardbusiness consistent with past practice, except (1) to the extent expressly provided otherwise in this Agreement or by applicable law, (2) as requested in writing by Parent or its designee or (3) as expressly permitted consented to by this Agreementemail by Xxxxxxx Xxxxx, as set forth Senior Vice President and Chief Legal Officer, on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent behalf of Parent (in response to an email request for such consent to an exception to this Section 4.1(a) that is addressed to xxxxxxxxxxxxxxxxxx@xxxxxx.xxx and xxxxxx.xxxx@xxxxxxxx.xxx, such consent not to be unreasonably withheld, conditioned or delayed);
(b) The Company will, conduct and will cause each of its Subsidiaries to, (1) pay all of its debts and income and other material Taxes consistent with past practice, except to the extent such debts or Taxes are being contested in good faith by appropriate proceedings and for which adequate reserves according to GAAP have been established and reflected in or reserved against or shown on the books and records of the Company or any of its Subsidiaries, (2) file its income and other material Tax Returns that are required to be filed consistent with past practices, (3) pay or perform its other obligations when due, and (4) use commercially reasonable efforts consistent with past practice to (A) substantially preserve intact its present business organizations, (B) substantially keep available the services of its present officers and key employees, and (C) preserve its relationships with Customers, suppliers, distributors, licensors, licensees and others having business dealings with it, to the end that its goodwill and ongoing businesses will be substantially unimpaired at the Closing Date; and
(c) The Company will, and will cause each of its Subsidiaries to, promptly notify Parent of any changes, occurrences and events, that would have a Material Adverse Effect on the Company or its Subsidiaries or which would cause any of the conditions in all material respects Article 5 not to be satisfied. Notwithstanding anything to the contrary contained herein, any action taken, or omitted to be taken, by the Company and its Subsidiaries to the extent required to be in compliance with applicable COVID-19 Measures shall not be deemed to be a breach of this Section 4.1 or Section 4.2; provided that, notwithstanding anything to the contrary in the foregoing, prior to any such actions taken, or omitted to be taken, by the Company or its Subsidiaries that are not otherwise deemed to be in the ordinary course of business, consistent business in accordance with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewiththis Agreement, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts where reasonably practicable provide prior notice to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries Parent with respect thereto (and where such prior notice has not been provided, provide notice to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is Parent reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiariespromptly thereafter), and consult with Parent in any transaction or series of transactions, good faith in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingconnection therewith.
Appears in 1 contract
Conduct of Business of the Company. The Company hereby covenants and agrees that, prior to the Effective Time, unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed) or except as otherwise expressly contemplated by this Agreement (including Sections 6.3(a) through 6.3(q) of the Company Disclosure Schedule) or the Related Agreements, the Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) operate its business in the Effective Time usual and ordinary course consistent with past practice, (ii) use its commercially reasonable efforts to preserve substantially intact its business organization, maintain its rights and franchises, retain the first date on services of its respective principal officers and key employees and maintain its relationships with its respective principal customers, suppliers and other persons with which Parent shall have exercised rights under Section 1.03 it or any of its Subsidiaries has significant business relations and (iii) use its commercially reasonable efforts to designate maintain and keep its properties and assets in as good repair and condition as at least a majority present, ordinary wear and tear excepted. Without limiting the generality of the Boardforegoing, and except as otherwise expressly permitted contemplated by this Agreement, as set forth on Section 6.01 to Sections 6.3(a)-6.3(q) of the Company Disclosure Letter Schedule or as required the Related Agreements or consented to in writing by applicable Law or with the prior written consent of Parent (which consent shall not to be unreasonably withheld, conditioned withheld or delayed), conduct the Company shall not, and shall not permit its business Subsidiaries to, do any of the following:
(a) amend or propose to amend its certificate of incorporation or bylaws (or other governing documents);
(b) authorize for issuance, issue, sell, deliver, or agree or commit to issue, sell or deliver, dispose of, encumber or pledge (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any securities, except as required by agreements with the Company’s employees under the Company Stock Plans, Warrant Agreements or Co-Investment Agreements, in all each case as in effect as of the date hereof, or amend any of the terms of any such securities or agreements outstanding as of the date hereof;
(c) (i) split, combine or reclassify any shares of its capital stock, declare, set aside or pay or agree to pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, or redeem or otherwise acquire any of its securities or any securities of its Subsidiaries or (ii) pay any fee (including without limitation any management fee under the Management Agreement or otherwise) or other amount to any holder of Company Common Stock or Company Preferred Stock or any of their respective Affiliates (other than the Company and its Subsidiaries), in each case, other than the Permitted Exceptions;
(d) (i) incur or assume any long-term or short-term indebtedness or issue any debt securities, other than borrowings under (A) the Revolving Loans (as defined in the Company Credit Agreement) or (B) those agreements for short term bank borrowings listed on Section 4.2(e) of the Company Disclosure Schedule; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person; (iii) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of the Company) or make any change in its existing borrowing or lending arrangements for or on behalf of any such Person, whether pursuant to an employee benefit plan or otherwise; (iv) pledge or otherwise encumber shares of capital stock of the Company or any of its Subsidiaries; or (v) mortgage, pledge or otherwise encumber any of its material respects assets, tangible or intangible, or create or suffer to exist any material Lien thereupon other than Permitted Liens in the ordinary course of business, consistent with past practice practice;
(including with respect to future purchase commitments e) adopt a plan of complete or partial liquidation or adopt resolutions providing for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) andcomplete or partial liquidation, to the extent consistent therewithdissolution, the Company shallconsolidation, and shall cause each of its Subsidiaries tomerger, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it restructuring or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 recapitalization of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(df) (i) except as may be required by applicable Law law or required existing agreements, plans or permitted by arrangements as in effect as of the date hereof, or in the ordinary course of business consistent with past practice, pay, agree to pay, grant, issue or accelerate payments or benefits pursuant to any Benefit Plan in excess of the payments or benefits provided under such Benefit Plan as of the date hereof, (ii) except (A) for increases in the ordinary course of business consistent with past practice for employees other than executive officers and directors of the Company Employee Plan that, in the aggregate, do not result in a material increase in benefits or written Contract existing prior compensation expense to the date of this Agreement that has been disclosed Company, or made available to Parent(B) as required under existing agreements for directors, officers, consultants and employees, increase in any manner the compensation payable salary or that could become payable fees or benefits of any director, officer, consultant or employee, or (iii) except as may be required by the Company or any of its Subsidiaries to directors or officerslaw, amend (other than increases in compensation amendments made in the ordinary course of business consistent in all material respects with past practice) or terminate any Benefit Plan or establish, adopt or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Benefit Plan if it were in existence as of the date of this Agreement;
(g) acquire, sell, transfer, lease, encumber or dispose of any assets outside the ordinary course of business (other than inventory in the ordinary course consistent with past practice) that, in the aggregate, are material to the Company and its Subsidiaries taken as a whole, or make enter into any contribution to any Company Employee Plan, other than amendments and contributions required by Law commitment or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in transaction outside the ordinary course of business consistent with past practice with respect which is likely to employees with an annual base salary not to exceed involve payments by the Company during the first 12 months of such commitment or transaction in excess of $150,000, 200,000 or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent $1,000,000 in all material respects with that the aggregate over the full term of the employee replacedsuch commitment or transaction;
(eh) acquireexcept as may be required as a result of a change in law or in GAAP, change any of the financial accounting principles or practices used by it;
(i) revalue in any material respect any of its assets, including writing down the value of inventory beyond the current obsolescence reserve or writing off notes or accounts receivable other than in the ordinary course of business;
(i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or otherwise, or invest in, any other business or Person organization or division thereof or make any loans, advances or capital contributions to or investments in any Person equity interest therein; (ii) other than as contemplated by Section 6.3(j)(ii) of the Company Disclosure Schedule, authorize any new capital expenditure or one or more of its Subsidiaries)expenditures which, in any transaction or series of transactionsindividually, is in excess of $250,000 or, in the aggregate, are in excess of $1,000,000; or (iii) enter into or amend any contract, agreement, commitment or arrangement providing for the taking of any action that would be prohibited under this clause (j);
(k) make any material Tax election, change any material method of Tax accounting or settle or compromise any material Tax liability of the Company or any of its Subsidiaries, and, in any event, the Company shall consult with Parent before filing or causing to be filed any material Tax Return of the Company or any of its Subsidiaries, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and the extent such Tax Return is filed in the ordinary course of business consistent with past practice, (B) employee loans and before executing or advances causing to be executed any agreement or waiver extending the period for travel, business, relocation assessment or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose collection of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness Taxes of the Company or any of its Subsidiaries;
(hl) pay, discharge or satisfy any material claims, liabilities or obligations (i) enter into any new line of business absolute, accrued, asserted or make unasserted, contingent or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000otherwise), other than (A) as contemplated by the Company's capital expenditure budgetpayment, which has been provided discharge or made available to Parent, or (B) satisfaction in the ordinary course of business consistent with past practicepractice or to the extent provided for in reserves specific to such claim, liability or obligation;
(i) permit any insurance policy or policies naming it as a beneficiary or a loss payable payee, which policy or policies, individually or in the aggregate, is/are material to the Company and the Subsidiaries taken as a whole, to be canceled or terminated without notice to Parent unless the Company or one of its Subsidiaries shall have obtained a comparable replacement policy, or (ii) enter into any insurance policy or policies naming it as a beneficiary or a loss payable payee, which policy or policies, individually or in the aggregate, is/are material to the Company and the Subsidiaries taken as a whole;
(n) except in the ordinary course of business consistent with past practice, modify(i) terminate, amend or terminate any Company Material Contract or waive, release or assign modify (in any material rights respect), or claims thereunder or (iii) dispose waive any material provision of, grantany Material Contract, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to amend, modify or arising from any securities class action claims or related derivative claims, change (in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on respect) any material policies or procedures governing product sales or returns or the business treatment of accounts receivable;
(o) settle or operations compromise any pending or threatened material suit, action or claim;
(p) enter into any agreement containing any provision or covenant limiting in any material respect the ability of the Company or any of its Subsidiaries to (i) sell any products or Affiliates services of or a material increase to any other Person, (ii) engage in any line of business, or (iii) compete with or obtain products or services from any Person or limiting the Company's insurance premiumsability of any Person to provide products or services to the Company or any of its Subsidiaries, in each case, in any geographic area or during any period of time;
(ji) enter into terminate the employment of, materially change the terms or conditions of employment of, or pay any Contract severance amounts upon a voluntary termination of a type referenced employment or “retirement”, of any of the individuals listed in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f6.3(q)(i) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or Schedule other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating than pursuant to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, agreements existing as of the date of this Agreement, hereof and disclosed in Section 6.3(q) of the FIN 48 reserves applicable to that claim;
Company Disclosure Schedule, (mii) acquire amend or materially alter modify any Owned Real Estate of the employment agreements listed on Section 6.2(q)(ii) of the Company Disclosure Schedule, or (iii) amend or modify any Ground Leased Real Estate;
(nof the letter agreements listed on Section 4.10(a) enter into any Store Leases other than in of the ordinary course of business consistent in all material respects with past practiceCompany Disclosure Schedule; or
(or) take, or agree in writing or commit otherwise to do take, any of the foregoingactions prohibited in Sections 6.3(a) through (q).
Appears in 1 contract
Samples: Merger Agreement (Monsanto Co /New/)
Conduct of Business of the Company. The Company shall, From and shall cause each of its Subsidiaries to, during the period from after the date of this Agreement until and prior to the earlier of (i) the Effective Time and (ii) or the first date on which Parent shall have exercised rights under Section 1.03 termination of this Agreement pursuant to designate at least a majority of the BoardArticle VII, except as expressly permitted contemplated by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries and controlled Affiliates to, use reasonable best efforts to maintain and preserve intact conduct its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) operations only in the ordinary course of business consistent with past practice and use its reasonable best efforts to preserve intact the business organization of the Company and its Subsidiaries and to preserve the goodwill of customers, suppliers and all other Persons having business relationships with the Company and its Subsidiaries. Notwithstanding the foregoing, and except as otherwise contemplated by this Agreement and solely in respect of LIHTC fund entities under the management of the Company and its Subsidiaries, to the extent that the failure to take any such action described in this Section 5.1 below would, in the good faith determination of the LIHTC Fund GP Manager, after consultation with legal counsel, reasonably be expected to constitute a breach of the duties of the general partner, managing member or other fiduciary or governing body of such fund entity under applicable Law or the organizational documents of such fund entity (in which case the Company shall use its reasonable best efforts to cause prompt written notice to Acquirer of any such determination to be given prior to the taking of any such action), from and after the date of this Agreement and prior to the earlier of the Effective Time or the termination of this Agreement pursuant to Article VII, the Company shall not, and shall cause each of its Subsidiaries and controlled Affiliates not to, take any of the following actions, without the prior written consent of Acquirer:
(a) adopt or propose any change to the Company Organizational Documents;
(b) except as set forth on Section 5.1(b) of the Company Disclosure Letter, engage in any material transaction (including, capital expenditures) that would require expenditures by the Surviving Trust following the Closing Date;
(c) issue, reissue, sell, grant, pledge or otherwise encumber, or authorize the issuance, reissuance, sale, grant, pledge or other encumbrance of shares of beneficial interest in the Company, or securities convertible into shares of beneficial interest in the Company, or any rights, warrants or options to acquire any convertible securities of or shares of beneficial interest in the Company;
(d) (i) grant any current or former director, trustee, manager, officer, employee or independent contractor any increase in compensation, bonus or other benefits, or any such grant of any type of compensation or benefits to any current or former director, trustee, manager, officer, employee or independent contractor not previously receiving or entitled to receive such type of compensation or benefit, (ii) except as set forth on Section 5.1(d)(ii), grant or pay to any current or former director, trustee, manager, officer, employee or independent contractor any severance, change in control or termination pay, or modifications thereto or increases therein, (iii) except as set forth on Section 5.1(d)(iii) of the Company Disclosure Letter, pay any benefit or grant or amend any award under any Company Benefit Plan, (iv) adopt, enter into, amend, modify or terminate any collective bargaining agreement or other labor union contract, (v) take any action to accelerate the vesting or payment of any compensation or benefit under any Company Benefit Plan or other Contract, (vi) adopt any new employee benefit plan or arrangement or amend, modify or terminate any existing Company Benefit Plan, in each case for the benefit of any current or former director, trustee, manager, officer, employee or independent contractor, or (vii) hire any new director, trustee, manager, officer, employee or independent contractor with compensation in excess of (x) $350,000 per year with respect to employees any existing position and (y) $200,000 per year with an annual base salary not respect to exceed $150,000any newly created position, or (Bin each case subject to the terms and conditions set forth on Section 5.1(d)(vii) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replacedCompany Disclosure Letter;
(e) acquiresell, by mergerlease, consolidationencumber or otherwise surrender, acquisition of stock relinquish, dispose of, transfer, exclusively license, mortgage, pledge or grant any lien on or security interest in any assets, properties or otherwiserights (including the capital stock of, or invest other equity or voting interests in, the Company’s Subsidiaries, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than real properties listed on Section 3.27(a)(ii) of the Company or one or more Disclosure Letter) except (i) in connection with the financing and sale of its Subsidiaries), loans in any transaction or series of transactions, in excess of $250,000 connection with the loan origination in the aggregateordinary course of business, except (Aii) pursuant to existing Contracts that have been disclosed or made available to Parent and in connection with the sale of the LIHTC investments listed on Section 3.27(a)(i) of the Company Disclosure Letter in the ordinary course of business consistent with past practiceor (iii) as set forth on Section 5.1(e) of the Company Disclosure Letter;
(f) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, shares of beneficial interest in the Company or shares of capital stock or property) in respect of, any of its shares of beneficial interest or capital stock, (By) employee loans adjust, split, combine or advances reclassify any of its shares of beneficial interest or capital stock or issue or propose or authorize the issuance of any other securities (including options, warrants, or any similar security exercisable for travelor convertible into, businesssuch other security) in respect of, relocation in lieu of or in substitution for its shares of beneficial interest or shares of its capital stock or (z) purchase, redeem or otherwise acquire any of its shares of beneficial interest or the capital stock of any of its Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other reimbursable expenses made securities, except (i) for purchases, redemptions or other acquisitions of its shares of beneficial interest or shares of capital stock of its Subsidiaries or other securities pursuant to an existing restricted share purchase agreement with current or former employees, (ii) except in the case of payments of ordinary dividends under the Equity Issuer Trust in the ordinary course of business and (iii) except for intercompany distributions and loans in the ordinary course of business consistent with past practice;
(fg) except as required by any change in applicable Law, make, change or revoke any material Tax election, file any material amended Tax Return, settle or compromise any material claim, action, proceeding or assessment for Taxes, change any method of Tax accounting, enter into any closing agreement with respect to Taxes or make or surrender any material claim for a refund of Taxes;
(h) take any action or omit to take any action or enter into any transaction which has, or would reasonably be expected to have, the effect of materially and substantially delaying or impeding the consummation of the Merger;
(i) transferexcept as set forth on Section 5.1(i) of the Company Disclosure Letter, license(i) enter into, sellmodify, leaseamend or terminate any Material Contract, sublease(ii) enter into any successor agreement to an expiring Material Contract that changes the terms of the expiring Material Contract or (iii) enter into, subject modify, amend or terminate any new agreement that would have been considered a Material Contract if it were entered into at or prior to the date hereof;
(j) incur any Indebtedness or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for or cancel, the Indebtedness of any Person or make or authorize any material loan to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of mergerPerson, consolidationin each case, except in connection with the origination and/or sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise loans in the ordinary course of business consistent business;
(k) merge or consolidate with past practice any other Person;
(which for l) except as set forth on Section 5.1(l) of the avoidance Company Disclosure Letter, acquire or agree to acquire an amount of doubt and without limitation to assets or equity of another Person in aggregate fair market value in excess of $100,000;
(m) except as set forth on Section 5.1(m) of the foregoing shall be deemed to include the sale Company Disclosure Letter, originate any loan or other dispositionIndebtedness;
(n) except as required by any changes in accounting standards, including at discounted priceschange any method of accounting or accounting principles or practices by the Company or any of its Subsidiaries;
(o) terminate, cancel, amend or modify any insurance policies maintained by it covering the Company or any of supplies and inventory), its Subsidiaries or their respective properties which is not replaced by a comparable amount of insurance coverage;
(iip) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness reorganization of the Company or any of its Subsidiaries;
(hq) abandon, encumber, convey title (i) in whole or in part), exclusively license or grant any right or other licenses to Intellectual Property owned or exclusively licensed to the Company or any of its Subsidiaries, or enter into licenses or agreements that impose material restrictions upon the Company or any new line of business or make or agree its Subsidiaries with respect to make Intellectual Property owned by any new capital expenditure in excess of $250,000 or thatthird party, in the aggregate, are in excess of $500,000, each case other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available pursuant to Parent, or (B) customer contracts entered in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(ir) dischargefail to pay any maintenance and similar fees or fail to take any other appropriate actions as necessary to prevent the abandonment, settleloss or impairment of any owned Intellectual Property;
(s) institute, compromise, assign settle or satisfy agree to settle any material action, claim, whether audit, suit, litigation, dispute, complaint, proceeding (including arbitral or not pending before a Governmental Entityother administrative) or investigation, (i) outside the ordinary course of business consistent except with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except respect to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described audits set forth on Section 4.06(f) 3.24 of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(mt) acquire take or materially alter commence any Owned Real Estate action or any Ground Leased Real Estate;
(nevent that, had such action or event taken place prior to the Form 15 Filing Date, would have given rise to a reporting obligation under Items 1.01, 1.02, 2.01, 2.03, 2.04, 3.02, 3.03 and 5.03 of Form 8-K pursuant to Section 13 or 15(d) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practiceExchange Act; or
(ou) agree authorize or commit enter into any agreement or otherwise make any commitment to do any of the foregoing.
Appears in 1 contract
Conduct of Business of the Company. The During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement and the Effective Time, the Company shallagrees (unless the Company is required to take such action pursuant to this Agreement or Broadcom shall give its prior consent in writing which consent shall not be unreasonably withheld) to carry on its business in the usual, regular and shall cause each ordinary course consistent with past practice and in any event consistent with the Company's 2000 Operating Plan attached hereto, to pay its Liabilities and Taxes consistent with the Company's past practices (and in any event when due), to pay or perform other obligations when due consistent with the Company's past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith through appropriate proceedings), and, to the extent consistent with such business, to use reasonable efforts and institute all policies to preserve intact its present business organization, keep available the services of its Subsidiaries topresent officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, independent contractors and other Persons having business dealings with it, all with the express purpose and intent of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. Except as expressly contemplated by this Agreement, the Company shall not, without the prior written consent of Broadcom (which consent will not be unreasonably withheld), take or agree in writing or otherwise to take, any action that would result in the occurrence of any of the changes described in Section 2.9 of this Agreement, or any other action that would make any of its representations or warranties 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 agreements and covenants hereunder or knowingly cause any condition to Broadcom's closing obligations in Section 6.1 or Section 6.3 not to be satisfied. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of (i) the termination of this Agreement or the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the BoardTime, except as set forth in the Company Disclosure Schedule or as required or expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall notnot do, nor shall it cause or permit any of its Subsidiaries tothe following, without the prior written consent of Parent Broadcom (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Broadcom Corp)
Conduct of Business of the Company. The Company shallcovenants and agrees that, and shall cause each of its Subsidiaries to, during the period from between the date of this Agreement until and the earlier to occur of (i) the Effective Time and (ii) the first date on which termination of this Agreement pursuant to its terms, unless Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as otherwise specifically consent in writing in advance or unless otherwise expressly permitted required by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), shall conduct its business in all material respects (i) in the ordinary course Ordinary Course of business, Business and in a manner consistent with past practice and (including ii) in compliance with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, all applicable Laws and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement)Orders. Without limiting the generality of the foregoing, the Company shall use its commercially reasonable efforts to (A) preserve intact its business organization and its rights, assets and properties, including Intellectual Property, (B) keep available the services of its officers, employees, contract workers, sales representatives, distributors and sales agents (other than terminations for cause in the Ordinary Course of Business consistent with past practice), (C) maintain in effect Material Contracts (other than those Material Contracts that expire in accordance with their terms or terminations expressly provided for by this Agreement), (D) pay Indebtedness for borrowed money and Taxes of the Company when due (except to the extent contested in good faith by the Company) and (E) preserve its relationships with material customers, licensees, suppliers and other Persons with which the Company has material business relationships. In addition to and not in limitation of the foregoing, the Company shall not between the date of this Agreement and the earlier to occur of the Effective Time, except as otherwise expressly permitted by Time and the termination of this Agreement pursuant to its terms, directly or as set forth on Section 6.01 indirectly do, or propose to do, any of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, following without the prior written consent of Parent (which such consent shall not to be unreasonably withheld, conditioned or delayed):delayed and provided that such consent shall only be provided if consistent with applicable Law), unless otherwise expressly permitted by this Agreement, required by applicable Law, requested by Parent or otherwise expressly set forth in Section 5.1 of the Company Disclosure Letter:
(a) amend or amend, propose to amend or otherwise change its Organizational Documents, alter (through merger, liquidation, reorganization, reclassification, recapitalization, restructuring or in any other fashion) the corporate or capital structure or ownership of its Subsidiaries' Charter Documentsthe Company, or commence any voluntary liquidation, dissolution or winding up of the Company;
(b) (A) issue, grant, sell, transfer, deliver, pledge, promise, dispose of or encumber, or authorize the issuance, grant, sale, transfer, deliverance, pledge, promise, disposition or encumbrance of, or alter, amend or modify the terms of or rights or obligations under, (i) adjust, split, combine, reclassify any shares of capital stock of any class or make any like change in any Company Securities or Company Subsidiary Securitiesseries of the Company, (ii) repurchaseany other ownership interests or stock-based rights of the Company, redeem (iii) any securities or otherwise acquireother instruments (including notes or other evidences of Indebtedness or stock-based rights) convertible into or exchangeable for, (B) subscription rights, options or offer warrants to repurchase, redeem or otherwise acquire, any Company Securities acquire (other than in the Convertible Notes as contemplated by ordinary course consistent with past practice), or (C) other agreements or commitments of any character obligating it to issue, in each case of the terms thereofforegoing clauses (A), (B), and (C), any such shares, interests or stock-based rights (or any convertible or exchangeable instruments or securities) or (iv) any other securities (including convertible or exchangeable securities) or convertible or exchangeable instruments of the Company, provided, however, the Company Subsidiary Securitiesmay issue shares of Company Common Stock or Series D Preferred Stock upon the valid exercise of Options or Warrants outstanding as of the date of this Agreement;
(c) establish, amend or accelerate the vesting or rights under any stock option plan, stock appreciation rights plan, stock purchase plan, phantom stock plan or other equity incentive plan;
(iiid) adopt, ratify or effectuate a stockholders’ rights plan or agreement or similar plan or Contract;
(e) (i) declare, set aside 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, property (ii) split, combine or otherwisereclassify any of its capital stock, (iii) effect a recapitalization, (iv) 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 (v) redeem, purchase (or repurchase, other than in connection with an employee’s termination of service to the Company) or otherwise acquire, directly or indirectly, any of the capital stock or other securities of the Company;
(f) sell, transfer, assign, deliver, lease, sublease, license, sublicense, mortgage, pledge, encumber, impair or otherwise dispose of (in whole or in part), or create, incur or assume any Lien (other than a Permitted Lien) on, or otherwise cause to be subjected to any Lien (other than a Permitted Lien), any of the material assets, material properties or securities of the Company (including any Intellectual Property or accounts receivable), except for the sale of inventory in the Ordinary Course of Business consistent with past practice;
(g) (i) acquire any equity interests in, or otherwise acquire or form, any entity or other Person, (ii) acquire any real property or (iii) acquire any rights, assets or properties with a value in excess of $350,000 in the aggregate, other than in the Ordinary Course of Business consistent with past practice and in compliance with applicable Law;
(h) (i) incur or modify any Indebtedness or issue any debt securities or any warrants or rights to acquire any debt security, (ii) assume, guarantee or endorse, or otherwise become responsible for, the obligations of any other Person, (iii) enter into any off-balance sheet financing arrangement or any accounts receivable or payable financing arrangement or (iv) make any loans, advances or enter into any Contract other financial commitments (except for advances of reasonable business expenses in the Ordinary Course of Business consistent with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parentpast practice);
(ci) issueauthorize or make any capital expenditures outside of the Ordinary Course of Business consistent with past practice, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, in excess of $350,000;
(j) other than as may be required pursuant to applicable Law (i) the issuance of shares of Company Common Stock upon the exercise of increase, accelerate or provide for additional compensation or benefits (fringe or otherwise) to, or grant, agree to grant, pay or otherwise make payable any Company Equity Award outstanding as incentive, bonus or similar compensation or rights to, any current or former director, manager, managing director, officer, employee, contract worker or agent of the date Company other than in the Ordinary Course of this Agreement in accordance Business consistent with its termspast practice, (ii) the issuance of shares of Company Common Stock grant, pay or otherwise make payable any change in respect of other equity compensation awards outstanding under Company Stock Plans as control, transaction-based, severance, retention, continuation or termination pay to any current or former director, manager, managing director, officer, employee, contract worker or agent of the date of this Agreement Company, other than as required pursuant to Company Benefit Plans in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding existence as of the date of this Agreement, (iii) loan or advance (or forgive any such loan or advance of) any money or other property to any current or former director, manager, managing director, officer, employee, contract worker or agent of the Company (except for advances of business expenses in the Ordinary Course of Business consistent with past practice), (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, or terminate or take any action to accelerate any material rights under (including termination of participation in) (A) any Company Employee Plans or collective bargaining agreement Benefit Plan or any other plan, agreement, program, policy, trust, fund or other arrangement that would be a Company an Employee Benefit Plan if it were was in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than Agreement (except for immaterial amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course Ordinary Course of business Business consistent with past practice with respect that would not result in an increase in Liability to employees with an annual base salary not the Company, or, after the Closing, to exceed $150,000Parent, the Surviving Company, or any of their respective Affiliates), or (B) to replace existing employees whose employment has terminatedcollective bargaining agreement or other labor agreement or (v) terminate any employee, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 termination for cause in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course Ordinary Course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business Business consistent with past practice, or take encourage any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected employee to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of resign from the Company or any of its Subsidiaries;
(hk) (i) enter into change any new line of business accounting or make cash management policies, procedures or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated practices used by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any management of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
working capital (jincluding with respect to reserves, revenue recognition, timing for payments of accounts payable and collection of accounts receivable) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change unless required by a change in GAAP Law or applicable LawGAAP;
(l) make, revoke make or amend change any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) an election in the Ordinary Course of Business consistent with the past practices of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other TaxCompany, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxesforeign Tax Liability, file any amended federal Tax Return or material state, local income or other material Tax Return Return, enter into any closing agreement relating to any Tax, agree to an extension or waiver of any limitation period applicable to any claim for refund or assessment in respect of Taxes, or surrender any right to claim a Tax refund;
(m) settle any Claim, except if such settlement (i) would not impose or otherwise make a result in any injunctive or similar Order on the Company, (ii) would not restrict in any way, or otherwise result in any restriction on, the business of the Company (or the Surviving Company after the Effective Time) and (iii) would not exceed $50,000 in cost, Liability or value to the Company;
(n) (i) waive, assign, release or otherwise relinquish any material change rights or claims, or (ii) commence any suit, action or proceeding, or threaten to commence any suit, action or proceeding, against any Person (other than Parent, Merger Sub 1 or Merger Sub 2);
(o) engage in any transactions with, or enter into or modify or amend in any material respect any Contract or other arrangement with, any of the Tax compliance practices directors, managers, managing directors, officers, employees, Contract workers, agents, Company Securityholders, or other Affiliates of the Company, except or any of their respective Affiliates or family members, other than offer letters and other standard documents, in the Company’s standard forms that no consent shall be required have been Made Available to Parent (and not providing any rights to severance or similar payments), with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of any new employees or contract workers hired or retained after the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(mp) acquire suspend or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in terminate the ordinary course of business consistent in all material respects with past practiceaMAZE IDE Clinical Trial, except if so required by a Governmental Authority; or
(oq) authorize any of the foregoing, or agree or commit enter into or amend any Contract or commitment to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (AtriCure, Inc.)
Conduct of Business of the Company. The Company shallExcept as expressly permitted or required by this Agreement or with the prior written consent of Parent (which consent Parent shall use its commercially reasonable efforts to provide or withhold within three (3) Business Days of the Company's request therefor, and which consent otherwise shall cause each of its Subsidiaries tonot be unreasonably withheld, delayed or conditioned) during the period from the date of this Agreement until the earlier of Effective Time, or the date (iif any) the Effective Time and (ii) the first date on which Parent shall have exercised rights under this Agreement is terminated pursuant to Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith8.1, the Company shall, and shall cause each of its Subsidiaries to, (w) conduct its business and operations in the ordinary course in all material respects consistent with past practice, (x) use reasonable best efforts to maintain and preserve intact its business organization and its Subsidiaries' advantageous business organization, to keep available relationships and retain the services of its and its Subsidiaries' current officers and key employees, to preserve (y) keep in full force and effect (with the same scope and limits of coverage) all insurance policies in effect as of the date of this Agreement covering its material assets and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that z) take no action by that is intended to or would reasonably be expected to adversely affect or materially delay the Company ability of any party to obtain any necessary approvals of any Governmental Authority required for the Transactions or to perform its Subsidiaries with respect covenants and agreements under this Agreement or to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of consummate the foregoing unless such action would constitute a breach of such other provision of this Agreement)Transactions. Without limiting the generality of the foregoing, between during the period from the date of this Agreement and to the Effective Time, or the date (if any) on which this Agreement is terminated pursuant to Section 8.1, except as otherwise set forth in Section 5.1 of the Company Disclosure Schedule and except as expressly permitted or required by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawParent, the Company shall not, nor and shall it permit any of cause its Subsidiaries not to, without the prior written consent of Parent (which consent Parent shall use its commercially reasonable efforts to provide or withhold within three (3) Business Days of the Company's request therefor, and which consent otherwise shall not be unreasonably withheld, conditioned delayed or delayedconditioned):
(a) amend incur or propose to amend its assume any Indebtedness or assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Indebtedness or other obligations of any other Person (other than a wholly owned Subsidiary of its Subsidiaries' Charter Documents;the Company), or make or forgive any loan, advance or capital contribution to, any Person (other than a wholly owned Subsidiary of the Company), except for Indebtedness in an amount that does not exceed $1,000,000 in the aggregate.
(b) (i) adjust, split, combinecombine or reclassify any of its capital stock, reclassify voting securities or other equity interests or make any like other change in any Company Securities or Company Subsidiary Securitiesthe capital structure of the Company;
(c) make, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend (with the exception of such dividends as may have been declared but are unpaid as of the date hereof or are consistent with past practice in terms of timing and amount; provided, that the per-share amount of such dividends (which were not yet declared as of the date hereof) shall not exceed $0.35 per quarter), or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire (except for the acceptance or withholding of shares of Company Common Stock in payment of the exercise price or withholding Taxes incurred by any employee or director in connection with the exercise of Company Options or Company SARs or the vesting of Company Restricted Shares in respect of Company Common Stock granted under a Company Benefit Plan), any shares of its capital stock, voting securities or other equity interests or any securities or obligations convertible (whether in cash, currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock, property voting securities or otherwise) other equity interests (in respect ofeach case, or enter into except dividends paid by any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company subsidiary to its parent);
(cd) issue, deliver, sell, pledge, dispose of, transfer, modify grant or encumber subject to any Company Securities or Company Subsidiary Securities, Encumbrance (other than (iany Permitted Encumbrance) the issuance of any shares of Company Common Stock upon the exercise capital stock or other securities of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries or any subscriptions, options, warrants, calls, rights, "phantom" stock rights, stock appreciation rights, stock-based performance units or other rights of any kind to directors acquire shares of capital stock or officersother securities of the Company or any of its Subsidiaries, other than issuances of Company Common Stock pursuant to the exercise of Company Options or Company SARs.
(i) except (w) as required by applicable Law, (x) for normal promotions or normal performance-related merit based increases in compensation base salaries or base wages made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice (including with respect to percentage levels and frequency of increases) with respect to employees with or directors of any of the Company or its Subsidiaries, in an annual base salary aggregate amount that does not to exceed $150,0002,500,000 or (y) as required by the terms of any Company Benefit Plan as in effect on the date of this Agreement, increase the wages, salaries or other compensation of any past, present or future employee of any of the Company or its Subsidiaries, or (Bii) to replace existing employees whose employment has terminatedexcept as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement, at compensation levels and with pay or provide, or increase or accelerate the accrual rate, vesting or timing of payment or funding of, any other compensation, benefits consistent in all material respects with that or other rights of any employee of any of the employee replacedCompany or its Subsidiaries (including, without limitation, any new or increased incentive compensation (cash or equity) or severance entitlement);
(ef) acquireestablish, by merger, consolidation, acquisition of stock adopt or assetsbecome a party to any new, or otherwiseamend or terminate any existing, change-in-control, severance, termination or similar compensation agreement or arrangement with any employee, director or officer of the Company or its Subsidiaries;
(g) establish, adopt, enter into, materially amend or terminate any employee benefit plan or any Collective Bargaining Agreement, thrift, compensation or other plan, agreement, trust, policy or arrangement for the benefit of any directors, officers or employees of the Company or its Subsidiaries;
(h) accelerate the time of payment or vesting of, or invest inthe lapsing of restrictions with respect to, or funding or otherwise securing the payment of, any business compensation or Person benefits under any Company Benefit Plan or division thereof Non-U.S. Plan;
(i) enter into, terminate or make materially amend any loansCompany Benefit Plan or Non-U.S. Plan;
(j) hire any person to be employed by the Company or any of its Subsidiaries or terminate the employment of any employee of the Company or any of its Subsidiaries, advances or capital contributions to or investments in any Person (other than the Company hiring or one or more firing of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made non-executive officer employees in the ordinary course of business consistent with past practice;
(fk) (i) sell, transfer, license, sell, lease, subleasemortgage, subject to any Lien (other than Permitted Liens) encumber or otherwise dispose of any properties or assets or properties to any Person, other than (whether by way of mergerv) sales, consolidationtransfers, sale of stock or assetslicenses, or otherwise)leases, including the capital stock mortgages, Encumbrances or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant disposals to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities (w) with respect to mortgages and encumbrances, Permitted Encumbrances, (x) leases of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) real property in the ordinary course of business consistent with past practice, (iiy) except sales of properties or assets with a sale price that does not exceed $1,000,000 individually or $2,000,000 in the aggregate, and (z) sales of inventory in the ordinary course of business consistent with past practicebusiness; or (ii) cancel, modifyrelease, amend settle or terminate assign any claims against any Person that exceed $1,000,000 individually or $2,000,000 in the aggregate;
(l) enter into or commit to enter into any Contract which, if entered into prior to the date hereof would be required to be set forth in Section 3.12 of the Company Disclosure Schedule, or materially amend, become subject to or terminate, or commit or agree to materially amend, become subject to or terminate, any such Contract, any Company Material Contract Contract, or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IPLease;
(im) dischargeenter into any significant new line of business or, settleexcept as required by changes in applicable Law, compromiseregulation or policies imposed by any Governmental Authority, assign or satisfy change in any material claimrespect its current operating policies;
(n) acquire or make any investment (whether by merger, consolidation, acquisition of stock or assets, joint venture or otherwise) either by purchase of stock or securities, contributions to capital or purchase, in a single transaction or series of related transactions, of any division or business or all or any significant portion of the property or assets of any Person (other than acquisitions of stock, securities, properties or assets not in excess of $1,000,000 individually or $5,000,000 in the aggregate), or enter into any Contract, letter of intent or similar arrangement (whether or not pending before a Governmental Entityenforceable) with respect to the foregoing;
(o) make any capital expenditure (other than consistent with the Company's existing capital expenditure plans made available to Parent prior to the date hereof) or commitment therefor or enter into any operating lease in excess of $1,000,000 individually or $2,000,000 in the aggregate;
(p) commence any Action, except (i) outside with respect to any Action in the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims in connection with a breach of this Agreement or related derivative claims, in each case except to the extent such claim is fully covered by Offer or the Merger;
(q) pay, discharge, settle or satisfy any Action, or liability, except (i) payments, discharges, settlements or satisfactions in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against on the financial statements of the Company's insurance policies , or (other ii) any such Actions or liabilities for monetary payment (in excess of insured amounts) of less than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result $500,000 individually and $2,000,000 in the imposition of aggregate and which payments, discharges, settlements or satisfactions do not impose any material restriction or obligation on the Company or any of its Affiliates (including, after the Closing, Parent and its Affiliates);
(r) form any Subsidiary;
(s) revalue in any material respect any of its properties or assets, including without limitation write off as uncollectible any notes or accounts receivable, except revaluations and write-offs in the ordinary course of business consistent with past practice;
(t) amend its articles of incorporation, bylaws or operations other similar governing documents except as may be necessary to comply with the terms of this Agreement;
(u) adopt a plan of, or resolutions providing for, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(v) implement or Affiliates or a material increase adopt any change in the Company's insurance premiumsor any of its Subsidiaries' Tax accounting or financial accounting principles, practices or methods, other than as may be required by applicable Law, GAAP or regulatory guidelines;
(ji) make any Tax election or take any position on a Tax Return filed on or after the date of this Agreement or adopt any method therein that is inconsistent with elections made, positions taken or methods used in preparing or filing similar returns in prior periods unless such position or election is required by applicable Law or the Code, (ii) enter into any Contract settlement or compromise of a type referenced in clause (ii)any Tax liability, (iii)) file any amended Tax Return that would result in a change in Tax liability, taxable income or loss, (iv)) change any annual Tax accounting period, (v) enter into any closing agreement relating to any Tax liability, or (viiivi) give or request any waiver of a statute of limitation with respect to any Tax Return, provided, that such election, settlement, amended Tax Return or any other action described in the foregoing portion of this Section 4.13(a5.1(w) will not require prior written consent of Parent if all such actions, in the aggregate, would not reasonably be expected to result in a cost to the Company and its Subsidiaries in excess of $1,000,000;
(x) 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 the Company or any of its Subsidiaries (other than routine employee terminations);
(ky) make terminate or permit any material change Permit to lapse, other than in accordance with the terms and regular expiration of any method of financial accounting principles such Permit, or practices, in each case except fail to apply on a timely basis for any such change required by a change in GAAP or applicable Lawrenewal of any renewable material Permit;
(lz) make(i) abandon, revoke or amend allow to lapse, any federal Tax election material Company Owned Intellectual Property that is registered or subject to an application for registration, (ii) cause the termination, prior to scheduled expiration, of any license for any material stateCompany Exclusively License Intellectual Property, local without any replacement, renewal or other Tax electionextension of such rights, adopt (iii) intentionally disclose or change permit the disclosure of any method of tax accounting other than as described on Section 4.06(fTrade Secrets that constitute material Company Owned Intellectual Property, or (iv) sell, transfer, assign, license or otherwise dispose of the Company Disclosure Letter, extend or waive the application of Owned Intellectual Property in any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of way that restricts the Company, except that no consent shall be required with respect to settlement 's use of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;such Intellectual Property; or
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(naa) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree contract or commit or agree (whether or not such contract, commitment or agreement is legally binding) to do do, or authorize or adopt any resolutions of the Company or its Subsidiaries in support of, any of the foregoingactions prohibited by this Section 5.1.
Appears in 1 contract
Samples: Merger Agreement (Cascade Corp)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of (i) the termination of this Agreement or the Effective Time and (ii) Time, the first date on which Company agrees to conduct its business, except to the extent that Parent shall have exercised rights under Section 1.03 otherwise consent in writing, in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to designate at least a majority pay the debts and Taxes of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 Company when due (subject to Parent’s review and comment prior to the Company Disclosure Letter filing of any income or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayedmaterial Tax Return), conduct its to pay or perform other obligations when due, and to use commercially reasonable efforts to preserve intact the present business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each organizations of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use commercially reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current the present officers and employees, Employees of the Company and to use commercially reasonable efforts to preserve its and its Subsidiaries' present the relationships and goodwill of the Company with customers, suppliers, lessors, distributors, licensors, licensees licensees, and other Persons others having material business relationships dealings with it or its Subsidiaries (it being agreed them, all with the goal of preserving unimpaired the goodwill and understood that no action by ongoing business of the Company or its Subsidiaries with respect to matters specifically addressed at the Effective Time. Except as expressly contemplated by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on in Section 6.01 4.16 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawSchedule, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):Parent:
(a) amend cause or propose permit any modifications, amendments or changes to amend its or any of its Subsidiaries' Charter the Company Corporate Governance Documents;
(b) (i) adjustundertake any expenditure, split, combine, reclassify transaction or make commitment exceeding $15,000 individually or $50,000 in the aggregate or any like change in any Company Securities commitment or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary transaction of the Company to its parent)type described in Section 2.21 hereof;
(c) issuepay, deliverdischarge, sellwaive or satisfy, pledgein an amount in excess of $15,000 in any one case, dispose ofor $50,000 in the aggregate, transferany claim, modify liability, right or encumber any Company Securities obligation (absolute, accrued, asserted or Company Subsidiary Securitiesunasserted, contingent or otherwise), other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its termspayment, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, discharge or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made satisfaction in the ordinary course of business consistent (and, in all material respects with past practicethe case of claims and debt, which are reflected or reserved against in the Company Balance Sheet);
(d) adopt or change accounting methods or practices (including any change in depreciation or amortization policies or rates) other than as required by GAAP;
(e) make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, enter into any new agreement, settle any claim or amend assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, file any material respect, amended Tax Return without prior written consent of Parent or file any existing employment income or consulting, bonus, severance, retirement, retention, change in control material Tax Return unless a copy of such Tax Return has been delivered or similar agreement with made available to Parent for review and comment a reasonable time prior to filing pursuant to Section 4.12;
(f) revalue any of its past assets (whether tangible or present officersintangible), directors including writing down the value of inventory or consultants writing off notes or establishaccounts receivable;
(g) declare, adoptset aside, enter or pay any dividends on or make any other distributions (whether in cash, stock or property) in respect of any Company Capital Stock with respect to the Company or split, combine or reclassify any Company Capital Stock with respect to the Company or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of Company Capital Stock with respect to the Company, or directly or indirectly repurchase, redeem or otherwise acquire any shares of Company Capital Stock with respect to the Company (or options, warrants or other rights convertible into, amendexercisable or exchangeable for Company Capital Stock), terminate or take any action to accelerate any material rights under any except in accordance with the agreements evidencing Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence Options outstanding as of the date of this Agreementhereof and previously disclosed in writing to Parent;
(h) increase or otherwise change the salary, welfare, benefits or other compensation payable or to become payable to any officer, director, employee, consultant or advisor, or make any contribution declaration, payment or commitment or obligation of any kind for the payment (whether in cash, equity or other property) of a mandatory severance and any/all payments incurred by termination or expiration of an employment contract or employment relationship, change of control payment, any outstanding salary, overtime pay, bonus, allowances, subsidies or other additional compensation or ex-gratia payment to any Company Employee Plansuch person;
(i) sell, other than amendments lease, license, transfer or otherwise dispose of or grant any security interest in any of its properties or assets not in the ordinary course of business and contributions required by Law consistent with past practice;
(j) make any loan to any Person or purchase debt securities of any Person or amend the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employeesoutstanding loan agreement, except (A) for advances to employees for travel and business expenses in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replacedpractices;
(ek) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or money, amend the terms of any outstanding loan agreement, guarantee any such indebtedness for borrowed money of another any Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another any Person;
(l) waive or release any right or claim of the Company, enter into including any “keep well” write-off or other Contract to maintain any financial statement condition compromise of any account receivable of the Company;
(m) commence or settle any lawsuit, threat of any lawsuit or proceeding or other investigation by or against the Company, or relating to any of its respective businesses, properties or assets, without the express prior written consent of Parent;
(n) issue, grant, deliver or sell or authorize or propose or contract for the issuance, grant, delivery or sale of, or purchase or propose or contract for the purchase of, any Company Capital Stock or any securities convertible into, exercisable or exchangeable for, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating any of them to issue or purchase any such shares or other convertible securities, except for the issuance of Company Capital Stock pursuant to the exercise of outstanding Company Options or the conversion of Company Preferred Stock;
(o) (i) sell, lease, license or transfer to any Person any rights to any Company Intellectual Property or enter into any arrangement having the economic effect agreement or modify or amend any existing agreement with respect to any Company Intellectual Property with any Person or with respect to any Intellectual Property or Intellectual Property Rights of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) Person except in the ordinary course of business consistent with past practice, (ii) purchase or license any Intellectual Property or Intellectual Property Rights or enter into any agreement or modify or amend any existing agreement with respect to the Intellectual Property or Intellectual Property Rights of any Person other than commercially available off the shelf third party software licenses not in excess of $15,000 individually or $50,000 in the aggregate, or (iii) enter into any agreement or modify or amend any existing agreement with respect to the development of any Intellectual Property or Intellectual Property Rights with a third party;
(p) enter into or amend any Contract pursuant to which any other party is granted marketing, distribution, development, manufacturing or similar rights of any type or scope with respect to any Company Products;
(q) enter into any agreement to purchase or sell any interest in real property, grant any security interest in any real property, enter into any lease, sublease, license or other occupancy agreement with respect to any real property or alter, amend, modify or terminate any of the terms of any Lease Agreements, or waive any term or condition thereof or grant any consents thereunder;
(r) grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge affecting any real property or any part thereof; commit any waste or nuisance on any such property; or make any material changes in the construction or condition of any such property;
(s) terminate, amend or otherwise modify (or agree to do so), or violate the terms of, any of the Contracts set forth or described in Section 4.16(s) of the Disclosure Schedule;
(t) acquire or agree to acquire by merging or consolidating with, or by purchasing any assets or equity securities of, or by any other manner, or create or participate in, either directly or indirectly, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material or any equity securities, individually or in the aggregate, to the business of the Company;
(u) grant any severance or any payment incurred by (i) termination or expiration of an employment contract or employment relationship or (ii) change of control (whether payable in cash, equity or otherwise) to any Employee, except pursuant to written agreements outstanding, or policies existing, on the date hereof and as previously disclosed in writing to Parent, or adopt, or amend any new severance plan, or amend or modify or alter in any respect any severance plan, agreement or arrangement existing on the date hereof;
(v) enact, adopt, amend suspend or cease any employee benefit plan, policy or arrangement, or employee stock purchase or stock option plan, or enter into any employment contract (other than offer letters and letter agreements entered into, in the ordinary course of business and consistent with past practice, modifywith newly hired employees who are terminable “at will” and who are not officers of the Company) or collective bargaining agreement, pay any special bonus or special remuneration (whether payable in cash, equity or otherwise) to any Employee, or increase the salaries or wage rates or fringe benefits (whether payable in cash, equity or otherwise) (including rights to severance or indemnification) of its Employees, except pursuant to agreements outstanding on the date hereof that have been previously been disclosed on the Disclosure Schedule to Parent;
(w) enter into any strategic alliance, affiliate agreement or joint marketing arrangement or agreement;
(x) waive any stock repurchase rights, accelerate, amend or terminate change the period of exercisability of options or restricted stock or any Company Material Contract other equity or waivesimilar incentive awards (including without limitation any long term incentive awards), release or assign reprice stock options (through amendment, exchange or otherwise) or authorize cash payments or new equity awards in exchange for any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IPstock options;
(iy) dischargehire, settleoffer to hire or terminate any officer or employee or encourage or otherwise cause any officer to resign from the Company;
(z) promote, compromisedemote, assign terminate or satisfy otherwise change the employment status or job position, or increase or decrease the salary of any material claimemployee;
(aa) alter, whether or not pending before enter into any commitment to alter, its interest in any corporation, association, joint venture, partnership or business entity in which an the Company directly or indirectly holds any interest;
(bb) cancel, amend or renew any insurance policy;
(cc) enter into any agreement pursuant to which the Company subjects any Intellectual Property to a Governmental Entitysource code escrow, or amend any existing agreement to provide for such an escrow; or
(dd) take, commit, or agree in writing or otherwise to take, any of the actions described in Sections 4.16(a) through 4.16(cc) hereof, or any other action that would (i) outside prevent the ordinary course of business consistent with past practice Company from performing, or cause the Company not to perform, its covenants or agreements hereunder or (ii) relating to cause or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries respective representations and warranties contained herein being untrue or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingincorrect.
Appears in 1 contract
Samples: Merger Agreement (Audience Inc)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of (x) the termination of this Agreement and (y) the Effective Time, the Company agrees (unless the Company is required to take such action pursuant to this Agreement or Parent shall give its prior consent in writing), to carry on its business substantially in the usual, regular and ordinary course substantially consistent with past practice, to pay its Liabilities and Taxes consistent with the Company’s past practices, to pay or perform other obligations when due consistent with the Company's past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith), and, to the extent consistent with such business, to use commercially reasonable efforts to preserve substantially intact its present business organization, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, independent contractors and other Persons having business dealings with it, all with the express purpose and intent of preserving substantially unimpaired its goodwill and ongoing businesses at the Effective Time. Except as expressly contemplated by this Agreement, the Company shall not, without the prior written consent of Parent, take or agree in writing or otherwise to take, any action that would result in the occurrence of any of the changes described in Section 2.9 or any other action that would make any of its representations or warranties contained in this Agreement untrue or incorrect when made in any material respect. The Company shallshall not, without the prior written consent of Parent, take or agree in writing or otherwise to take, any action that would prevent the Company from performing or cause the Company not to perform its agreements and shall covenants hereunder or knowingly cause each any condition to Parent’s closing obligations in Section 6.1 or Section 6.3 not to be satisfied. Without limiting the generality of its Subsidiaries tothe foregoing, during the period from the date of this Agreement and continuing until the earlier of (i) the termination of this Agreement or the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the BoardTime, except as set forth in the Company Disclosure Schedule or as required or expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for and each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, its Subsidiaries shall not (and shall cause each of its Subsidiaries their respective Subsidiaries, if any, not to) do, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it cause or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries tothe following, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter DocumentsParent;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoing.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or Except with the prior written consent of Parent the Acquirer (which shall not to be unreasonably withheld, conditioned withheld or delayed), conduct its business in at all material respects in times from the ordinary course date of business, consistent with past practice (including with respect to future purchase commitments for each execution of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, this Agreement to the extent consistent therewithClosing Date, the Company shall, and the Covance Parties shall cause each the Company to:
(a) Operate its business only in the ordinary course and consistent with past practice, and not amend its articles of incorporation or bylaws;
(b) Use its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organizationorganization intact, to continue the employment or keep available the services of its and its Subsidiaries' current present officers and employees, and to preserve its and its Subsidiaries' present relationships and goodwill with the good will of customers, supplierssubcontractors, lessorssuppliers and others having business relations with it;
(c) Maintain, distributorsin the exercise of its reasonable business judgment, licensorsall assets consisting of real or personal property in good repair and operating condition, licensees ordinary wear and other Persons having material business relationships tear excepted;
(d) Comply with it applicable Governmental Rules;
(e) Promptly inform the Acquirer of the occurrence of any event or its Subsidiaries the existence of any condition which (it being agreed and understood that no action by i) constitutes or, with the giving of notice or the passage of time, or both, could constitute, a Company Material Adverse Effect; (ii) could cause any of the representations or its Subsidiaries with respect to matters specifically addressed by any other provision warranties of this Section 6.01 shall be deemed the Covance Parties herein to be misleading or untrue; (iii) could cause any of the conditions to the Acquirer’s obligation to close not to be satisfied or (iv) would otherwise constitute a violation or breach of any of the foregoing unless such action would constitute a breach terms or conditions hereof;
(f) Not take or permit to be taken any of such the following actions:
(i) (A) enter into any new line of business, (B) incur or commit to any capital expenditures or any obligations or Liabilities other provision of this Agreementthan capital expenditures which individually and in the aggregate do not exceed Ten Thousand Dollars ($10,000). Without limiting the generality , or make payments in connection with any of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on (C) enter into any transaction with its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter DocumentsAffiliates;
(bii) (i) adjust, split, combine, reclassify Declare or pay any dividends on or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution distributions (whether in cash, stock or property) in respect of any of its capital stock, property or otherwise) 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 enter in substitution for shares of its capital stock, or repurchase or otherwise acquire, directly or indirectly, any shares of its capital stock;
(iii) Enter into any Contract with respect to the voting ofor commitment, or violate, amend or otherwise modify or waive any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to terms of any of its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary SecuritiesContracts, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect and in no event shall such Contract, commitment, amendment, modification or waiver (other than those relating to employees with an annual base salary not to exceed sales of products or purchases of supplies in the ordinary course) involve the payment by the Company in excess of Ten Thousand Dollars ($150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced10,000);
(eiv) Enter into any employment agreement with any Company employee, including, without limitation, any contract for a specific term of employment, any restrictive covenant and any change of control agreement, and/or violate, amend or otherwise modify or waive any of the terms of any of its Contracts;
(v) Issue, deliver and sell or authorize or propose the issuance, delivery or sale of, or purchase or propose the purchase of, any shares of its capital stock or securities convertible into, or subscriptions, rights, warrants or options to acquire, by merger, consolidation, acquisition or other contracts or commitments of stock any character obligating it to issue any such shares or assets, or otherwise, or invest in, any business or Person or division thereof or other convertible securities;
(vi) (A) make any loans, advances or capital contributions to to, or investments in in, any other Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money in a single transaction or group of transactions in excess of Ten Thousand Dollars ($10,000) or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another PersonCompany, enter into any “keep well” or other Contract agreement to maintain any financial statement condition of any other another Person or enter into any arrangement having the economic effect of any of the foregoing;
(vii) Transfer or license to any Person any rights to its Intellectual Property Rights, other than, in each case, borrowings and repayments under than the Company's existing revolving credit facility license of non-exclusive rights to its Intellectual Property Rights in the ordinary course of business consistent with past practice;
(viii) Sell, lease, license or take otherwise dispose of or create or impose any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or Lien on any of its Subsidiaries;
(h) (i) enter into any new line of business properties or make assets which are material, individually or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000to its business, other than (A) taken as contemplated by the Company's capital expenditure budgeta whole, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(iix) dischargePay, settle, compromise, assign discharge or satisfy in an amount in excess of Ten Thousand Dollars ($10,000) in any one case, any claim, Liability or obligation, absolute, accrued, asserted or unasserted, contingent or otherwise, arising other than in the ordinary course of business, other than the payment, discharge or satisfaction of Liabilities reflected or reserved against in the Company Financials;
(x) Reduce the amount of any insurance coverage provided by existing insurance policies;
(xi) Terminate or waive any right of material value;
(xii) Adopt or amend any employee benefit or stock purchase or option plan or hire any new employee, pay any special bonus or special remuneration to any consultant, employee or director other than pursuant to existing Contracts, or increase the salaries or wage rates of its employees other than pursuant to scheduled annual performance reviews; provided that any resulting modifications are in the ordinary course of business and consistent with the Company’s past practices;
(xiii) Grant any severance or termination pay: (A) to any director or officer, or (B) to any other employee except payments made pursuant to standard written Contracts outstanding on the date hereof;
(A) Commence any litigation, action or proceeding, other than: (I) for the routine collection of bills, (II) in such cases where it in good faith determines that failure to commence suit would result in the material impairment of a valuable aspect of its business; provided that it consults with the Acquirer prior to the filing of such a suit, or (III) for a breach of this Agreement, or (B) settle or compromise any material claimlitigation, whether action or not proceeding or regulatory investigation pending before or enter into any consent decree, injunction or similar restraint or form of equitable relief in settlement of any litigation, action, or proceeding or regulatory investigation pending;
(xv) Acquire or agree to acquire by merging or consolidating with, or by purchasing a Governmental Entitysubstantial 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 (i) outside except for purchases of equipment, supplies and components in the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductiblepractice), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition acquire or agree to acquire any equity securities of any material restriction on the corporation, partnership, association or business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiumsorganization;
(jxvi) enter into Make or change any Contract election in respect of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax electionTaxes, adopt or change any accounting method in respect of tax accounting other than Taxes, file any Tax Return (except as described on Section 4.06(frequired to do so by law) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal amendment to a material Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refundReturn, enter into any material agreement relating to federalclosing Contract, state, local settle any claim or other assessment in respect of Taxes, file or consent to any amended federal Tax Return extension or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices waiver of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves limitation period applicable to that claimany claim or assessment in respect of Taxes;
(mxvii) acquire Revalue any of its assets, including without limitation writing down the value of inventory or materially alter any Owned Real Estate writing off notes or any Ground Leased Real Estate;
(n) enter into any Store Leases accounts receivable other than in the ordinary course of business consistent in all material respects with past practice; orbusiness;
(oxviii) Make any change to its accounting methods, principles, policies, procedures or practices, except as may be required by GAAP or applicable statutory accounting principles;
(xix) Except to the extent required to comply with its obligations hereunder or with applicable law, amend or propose to so amend its articles of incorporation, bylaws or other comparable organizational documents; and
(xx) Take or agree in writing or commit otherwise to do take any of the foregoingactions described in Sections 5.1(f)(i)-(xix) above, or any action that is reasonably foreseeable by any Covance Party to be likely to make any of their representations or warranties contained in this Agreement untrue or incorrect or prevent them from performing or cause them not to perform any of their respective covenants hereunder.
Appears in 1 contract
Samples: Share Purchase Agreement (Eresearchtechnology Inc /De/)
Conduct of Business of the Company. The During the period from the date of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article 8 hereof and the Effective Time, the Company shallagrees (unless the Company is required to take such action pursuant to this Agreement or Parent shall give its prior consent in writing), subject to the prohibitions set forth in this Section 4.1 and shall cause each in Section 4.2, to carry on its business in the usual, regular and ordinary course consistent with past practice, to pay its Liabilities, Taxes and other obligations consistent with its past practices (and in any event when due), and, to the extent consistent with such business, to preserve intact its present business organization, keep available the services of its Subsidiaries topresent officers and key employees and preserve its relationships with customers, suppliers, distributors, licensees, independent contractors and other Persons having business dealings with it, all with the express purpose and intent of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. Except as expressly contemplated by this Agreement, the Company shall not, without the prior written consent of Parent, take or agree in writing or otherwise to take, any action that would result in the occurrence of any of the changes described in Section 2.10 or any other action that would make any of its representations or warranties contained in this Agreement untrue or incorrect in any material respect (individually or in the aggregate) or prevent the Company from performing or cause it not to perform its agreements and covenants hereunder or cause any condition to Parent’s closing obligations in Section 6.1 and Section 6.3 not to be satisfied. Without limiting the generality of the foregoing, during the period from the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority occur of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date termination of this Agreement and pursuant to Article 8 hereof, or the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it except as set forth in Section 4.1 of the Company Disclosure Schedule, cause or permit any of its Subsidiaries tothe following, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoing.:
Appears in 1 contract
Samples: Merger Agreement (Google Inc.)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of Except (ia) the Effective Time and (ii) the first date on which Parent shall have exercised rights under as described in Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 5.1 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or (b) as required by applicable LawLaw (including any COVID-19 Measures or such reasonable actions after notice has been provided to Parent or Parent’s counsel as may be taken in response to acts of war or sanctions, including in connection with the Company shall notcurrent dispute involving the Russian Federation and Ukraine), nor shall it permit any of its Subsidiaries to, without the prior written consent of (c) as consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed):) or (d) as required or expressly provided for by this Agreement, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, (x) the Company will use its commercially reasonable efforts to conduct its operations in all material respects according to its ordinary and usual course of business consistent with past practice, and the Company will use its commercially reasonable efforts to preserve intact its business organization and to preserve the present relationships with those Persons having significant business relationships with the Company; provided, that during any period of full or partial suspension of operations related to COVID-19 or any COVID-19 Measures, the Company may, in connection with COVID-19 or any COVID-19 Measures, take such actions as are reasonably necessary (i) to protect the health and safety of the Company’s employees and other individuals having business dealings with the Company or (ii) to respond to third-party supply or service disruptions caused by COVID-19 or any COVID-19 Measures; provided, further, that the Company may take such reasonable actions after notice has been provided to Parent or Parent’s counsel as may be taken in response to acts of war or sanctions, including in connection with the current dispute involving the Russian Federation and Ukraine, and (y) without limiting the generality of the foregoing, the Company will not:
(ai) amend adopt any amendments to its certificate of incorporation or propose to amend its or any of its Subsidiaries' Charter Documentsbylaws;
(bii) (i) adjustissue, splitsell, combinegrant options or rights to purchase, reclassify pledge, or make any like change in authorize or propose the issuance, sale, grant of options or rights to purchase or pledge, any Company Securities or Company Subsidiary Securities, other than (iiA) repurchaseCompany Shares issuable (x) with respect to the exercise, vesting or settlement of Company Stock Awards outstanding as of the date hereof or granted in compliance with this Agreement, or (y) pursuant to the Company ESPP or (B) the issuance or grant of Company Stock Awards to directors of the Company in accordance with the Company’s Amended and Restated Non-Employee Director Compensation Program in effect on the date hereof;
(iii) acquire or redeem or otherwise acquire, or offer to repurchaseacquire or redeem, redeem directly or otherwise acquireindirectly, or amend any Company Securities (Securities, other than (A) as provided by any Company Stock Plan, or (B) the Convertible Notes as contemplated by satisfaction of exercise price and/or Tax withholding obligations in connection with the terms thereofvesting, exercise and/or settlement of any Company Stock Award;
(iv) split, combine or Company Subsidiary Securities, (iii) reclassify its capital stock or declare, set aside aside, make or pay any dividend or distribution (whether in cash, stock or property) on any shares of its capital stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(cA) issueacquire, deliverby means of a merger, sellconsolidation, pledgerecapitalization or otherwise, dispose ofany business, transferassets or securities (other than, modify or encumber any Company Securities or Company Subsidiary Securitiesin each case, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement capital expenditures in accordance with its termssubclause (xiii) below and any acquisition of assets, (ii) the issuance of shares of Company Common Stock in respect of including active pharmaceutical ingredients and other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their termssupplies, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (Bpractice) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, for consideration in excess of $250,000 10,000,000, individually or in the aggregate, (B) sell, lease, or otherwise dispose of any assets of the Company with a fair market value in excess of $10,000,000, individually or in the aggregate, except (A1) pursuant to Contracts or commitments existing Contracts that have been disclosed as of the date of this Agreement, (2) sales of products or made available to Parent and services in the ordinary course of business consistent with past practice, (B3) employee loans or advances for travelIncidental Contracts, business, relocation or other reimbursable expenses made (4) non-exclusive licenses entered into in the ordinary course of business consistent with past practice;
, (f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A5) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise marketable securities in the ordinary course of business consistent with past practice practice, and (which for the avoidance 6) dispositions or abandonments of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility immaterial tangible assets in the ordinary course of business consistent with past practice, or take (C) adopt a plan of complete or partial liquidation, dissolution, recapitalization or restructuring;
(vi) sell, license, sublicense, assign, fail to maintain in the ordinary course of business, abandon or otherwise dispose of, grant any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result covenant-not-to-sue under or disclose any trade secrets in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company Intellectual Property (or any of its Subsidiaries;
(h) (i) enter into any new line of business Company Intellectual Property relating to the Specified Compounds or make or agree to make any new capital expenditure in excess of $250,000 or thatthe 360 Platform), in the aggregate, are in excess of $500,000, other than except for (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or Incidental Contracts and (B) non-exclusive licenses entered into in the ordinary course of business consistent with past practicepractice to contract manufacturers or contract research organizations;
(vii) incur, assume or otherwise become liable or responsible for any indebtedness for borrowed money, except for (A) indebtedness incurred in the ordinary course of business consistent with past practice or (B) other borrowings in an amount not to exceed $10,000,000 in the aggregate;
(viii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person in an amount not to exceed $10,000,000 in the aggregate;
(ix) make any loans, advances (other than for ordinary course business expenses or pursuant to the Company’s governing documents or existing indemnification obligations) or capital contributions to, or investments in, any other Person in excess of $10,000,000, except for advancement of expenses (A) under any indemnification agreement or (B) the certificate of incorporation or bylaws of the Company;
(x) change, in any material respect, any financial accounting methods, principles or practices used by it, except as required by GAAP or applicable Law;
(xi) change any annual Tax accounting period or make or change any material Tax election, settle any material Tax proceeding or surrender any claim to a material Tax refund, file any material Tax Return other than in a manner consistent with past practice or file any amended Tax Return in each case, other than as required by applicable Law or in the ordinary course of business;
(xii) except as required by applicable Law or required by a Plan in effect on the date hereof, (iiA) grant any change in control, retention, severance or termination pay or Company Stock Awards, (B) grant any material increases in, or accelerate the vesting or payment of, the compensation or benefits payable to its employees, consultants, officers or directors, (C) adopt, enter into, materially amend or terminate any material Plan or (D) hire, promote or terminate (other than for “cause”) the employment or services of any employee or consultant, other than an employee below the level of vice president;
(xiii) enter into any collective bargaining or similar labor Contract;
(xiv) make or authorize any material capital expenditure or incur any obligations, Liabilities or indebtedness in respect thereof, except for (A) those contemplated by the capital expenditure budget for the relevant fiscal year, which capital expenditure budget has been provided or made available to Parent prior to the date of this Agreement and (B) any unbudgeted capital expenditure, in an amount not to exceed, in any year, in the aggregate, $10,000,000;
(xv) settle any suit, action, claim, proceeding or investigation other than as contemplated by Section 6.11 or a settlement solely for monetary damages (net of insurance proceeds received) not in excess of $5,000,000 individually or $10,000,000 in the aggregate;
(xvi) except in the ordinary course of business consistent with past practicepractice or in connection with any transaction to the extent specifically permitted by any other subclause of this Section 5.1, (A) enter into any Contract that would, if entered into prior to the date hereof, be a Material Contract, except for any statement of work issued under an existing Material Contract, in each case not in excess of $5,000,000 individually; or (B) materially modify, materially amend or terminate (other than expirations in accordance with its terms) any Company Material Contract or waive, release or assign any material rights or material claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IPthereunder;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(jxvii) enter into any Contract of a type referenced in clause that by its terms would purport to bind Parent or its Affiliates (ii)other than, (iii)following the Closing, (iv), (v) or (viii) of Section 4.13(athe Company);
(kxviii) unless mandated by any Governmental Authority, (A) make any material change in to, discontinue, terminate or suspend any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement ongoing Research Program relating to federala Specified Compound and any other ongoing material Research Program, stateor (B) commence, local alone or other Taxeswith any third party, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except Research Program that no consent shall be required with respect has not been disclosed to settlement of a pending Tax claim for no more than 110% of the amount, as of Parent prior to the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(oxix) offer, agree or commit commit, in writing or otherwise, to do take any of the foregoing actions. In furtherance and not in limitation of any other provision of this Agreement, to the extent permitted by applicable Law, the Company shall keep Parent informed on a reasonably current basis of any material developments (including the occurrence of any serious adverse event and any material governmental inquiries or investigations), discussions or negotiations relating to the Company Products between or with the FDA or the European Medicines Agency (the “EMA”). Without limiting the generality of the foregoing., to the extent permitted by applicable Law, the Company (i) (A) shall promptly inform Xxxxxx, as reasonably in advance as practicable under the circumstances, of any material meetings, filings, submissions or correspondence to be made by or on behalf of the Company between or with the FDA or the EMA relating to any Company Product, and shall provide Parent with copies of any such filings, submissions or correspondence and
Appears in 1 contract
Conduct of Business of the Company. The Company hereby covenants and agrees that, prior to the Effective Time, unless Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld or delayed) or except as otherwise expressly contemplated by this Agreement (including Sections 6.3(a) through 6.3(q) of the Company Disclosure Schedule) or the Related Agreements, the Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) operate its business in the Effective Time usual and ordinary course consistent with past practice, (ii) use its commercially reasonable efforts to preserve substantially intact its business organization, maintain its rights and franchises, retain the first date on services of its respective principal officers and key employees and maintain its relationships with its respective principal customers, suppliers and other persons with which Parent shall have exercised rights under Section 1.03 it or any of its Subsidiaries has significant business relations and (iii) use its commercially reasonable efforts to designate maintain and keep its properties and assets in as good repair and condition as at least a majority present, ordinary wear and tear excepted. Without limiting the generality of the Boardforegoing, and except as otherwise expressly permitted contemplated by this Agreement, as set forth on Section 6.01 to Sections 6.3(a)-6.3(q) of the Company Disclosure Letter Schedule or as required the Related Agreements or consented to in writing by applicable Law or with the prior written consent of Parent (which consent shall not to be unreasonably withheld, conditioned withheld or delayed), conduct the Company shall not, and shall not permit its business Subsidiaries to, do any of the following:
(a) amend or propose to amend its certificate of incorporation or bylaws (or other governing documents);
(b) authorize for issuance, issue, sell, deliver, or agree or commit to issue, sell or deliver, dispose of, encumber or pledge (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any securities, except as required by agreements with the Company's employees under the Company Stock Plans, Warrant Agreements or Co-Investment Agreements, in all each case as in effect as of the date hereof, or amend any of the terms of any such securities or agreements outstanding as of the date hereof;
(i) split, combine or reclassify any shares of its capital stock, declare, set aside or pay or agree to pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, or redeem or otherwise acquire any of its securities or any securities of its Subsidiaries or (ii) pay any fee (including without limitation any management fee under the Management Agreement or otherwise) or other amount to any holder of Company Common Stock or Company Preferred Stock or any of their respective Affiliates (other than the Company and its Subsidiaries), in each case, other than the Permitted Exceptions.
(d) (i) incur or assume any long-term or short-term indebtedness or issue any debt securities, other than borrowings under (A) the Revolving Loans (as defined in the Company Credit Agreement) or (B) those agreements for short term bank borrowings listed on Section 4.2(e) of the Company Disclosure Schedule; (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person; (iii) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of the Company) or make any change in its existing borrowing or lending arrangements for or on behalf of any such Person, whether pursuant to an employee benefit plan or otherwise; (iv) pledge or otherwise encumber shares of capital stock of the Company or any of its Subsidiaries; or (v) mortgage, pledge or otherwise encumber any of its material respects assets, tangible or intangible, or create or suffer to exist any material Lien thereupon other than Permitted Liens in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documentspractice;
(be) (i) adjustadopt a plan of complete or partial liquidation or adopt resolutions providing for the complete or partial liquidation, splitdissolution, combineconsolidation, reclassify merger, restructuring or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary recapitalization of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries Subsidiaries;
(i) except as may be required by law or existing agreements, plans or arrangements as in effect as of the date hereof, or in the ordinary course of business consistent with past practice, pay, agree to pay, grant, issue or accelerate payments or benefits pursuant to any Benefit Plan in excess of the payments or benefits provided under such Benefit Plan as of the date hereof, (ii) except (A) for increases in the ordinary course of business consistent with past practice for employees other than executive officers and directors of the Company that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Company, or (B) as required under existing agreements for directors, officers, consultants and employees, increase in any manner the salary or fees or benefits of any director, officer, consultant or employee, or (iii) except as may be required by law, amend (other than increases in compensation amendments made in the ordinary course of business consistent in all material respects with past practice) or terminate any Benefit Plan or establish, adopt or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Benefit Plan if it were in existence as of the date of this Agreement;
(g) acquire, sell, transfer, lease, encumber or dispose of any assets outside the ordinary course of business (other than inventory in the ordinary course consistent with past practice) that, in the aggregate, are material to the Company and its Subsidiaries taken as a whole, or make enter into any contribution to any Company Employee Plan, other than amendments and contributions required by Law commitment or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in transaction outside the ordinary course of business consistent with past practice with respect which is likely to employees with an annual base salary not to exceed involve payments by the Company during the first 12 months of such commitment or transaction in excess of $150,000, 200,000 or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent $1,000,000 in all material respects with that the aggregate over the full term of the employee replacedsuch commitment or transaction;
(eh) acquireexcept as may be required as a result of a change in law or in GAAP, change any of the financial accounting principles or practices used by it;
(i) revalue in any material respect any of its assets, including writing down the value of inventory beyond the current obsolescence reserve or writing off notes or accounts receivable other than in the ordinary course of business;
(i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or otherwise, or invest in, any other business or Person organization or division thereof or make any loans, advances or capital contributions to or investments in any Person equity interest therein; (ii) other than as contemplated by Section 6.3(j)(ii) of the Company Disclosure Schedule, authorize any new capital expenditure or one or more of its Subsidiaries)expenditures which, in any transaction or series of transactionsindividually, is in excess of $250,000 or, in the aggregate, are in excess of $1,000,000; or (iii) enter into or amend any contract, agreement, commitment or arrangement providing for the taking of any action that would be prohibited under this clause (j);
(k) make any material Tax election, change any material method of Tax accounting or settle or compromise any material Tax liability of the Company or any of its Subsidiaries, and, in any event, the Company shall consult with Parent before filing or causing to be filed any material Tax Return of the Company or any of its Subsidiaries, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and the extent such Tax Return is filed in the ordinary course of business consistent with past practice, (B) employee loans and before executing or advances causing to be executed any agreement or waiver extending the period for travel, business, relocation assessment or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose collection of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness Taxes of the Company or any of its Subsidiaries;
(hl) pay, discharge or satisfy any material claims, liabilities or obligations (i) enter into any new line of business absolute, accrued, asserted or make unasserted, contingent or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000otherwise), other than (A) as contemplated by the Company's capital expenditure budgetpayment, which has been provided discharge or made available to Parent, or (B) satisfaction in the ordinary course of business consistent with past practicepractice or to the extent provided for in reserves specific to such claim, liability or obligation;
(i) permit any insurance policy or policies naming it as a beneficiary or a loss payable payee, which policy or policies, individually or in the aggregate, is/are material to the Company and the Subsidiaries taken as a whole, to be canceled or terminated without notice to Parent unless the Company or one of its Subsidiaries shall have obtained a comparable replacement policy, or (ii) enter into any insurance policy or policies naming it as a beneficiary or a loss payable payee, which policy or policies, individually or in the aggregate, is/are material to the Company and the Subsidiaries taken as a whole;
(n) except in the ordinary course of business consistent with past practice, modify(i) terminate, amend or terminate any Company Material Contract or waive, release or assign modify (in any material rights respect), or claims thereunder or (iii) dispose waive any material provision of, grantany Material Contract, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to amend, modify or arising from any securities class action claims or related derivative claims, change (in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on respect) any material policies or procedures governing product sales or returns or the business treatment of accounts receivable;
(o) settle or operations compromise any pending or threatened material suit, action or claim;
(p) enter into any agreement containing any provision or covenant limiting in any material respect the ability of the Company or any of its Subsidiaries to (i) sell any products or Affiliates services of or a material increase to any other Person, (ii) engage in any line of business, or (iii) compete with or obtain products or services from any Person or limiting the Company's insurance premiumsability of any Person to provide products or services to the Company or any of its Subsidiaries, in each case, in any geographic area or during any period of time;
(ji) enter into terminate the employment of, materially change the terms or conditions of employment of, or pay any Contract severance amounts upon a voluntary termination of a type referenced employment or "retirement", of any of the individuals listed in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f6.3(q)(i) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or Schedule other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating than pursuant to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, agreements existing as of the date of this Agreement, hereof and disclosed in Section 6.3(q) of the FIN 48 reserves applicable to that claim;
Company Disclosure Schedule, (mii) acquire amend or materially alter modify any Owned Real Estate of the employment agreements listed on Section 6.2(q)(ii) of the Company Disclosure Schedule, or (iii) amend or modify any Ground Leased Real Estate;
(nof the letter agreements listed on Section 4.10(a) enter into any Store Leases other than in of the ordinary course of business consistent in all material respects with past practiceCompany Disclosure Schedule; or
(or) take, or agree in writing or commit otherwise to do take, any of the foregoingactions prohibited in Sections 6.3(a) through (q).
Appears in 1 contract
Samples: Merger Agreement (Seminis Inc)
Conduct of Business of the Company. The Company shallExcept as expressly permitted or required by this Agreement or with the prior written consent of Parent (which consent Parent shall use its commercially reasonable efforts to provide or withhold within three (3) Business Days of the Company’s request therefor, and which consent otherwise shall cause each of its Subsidiaries tonot be unreasonably withheld, delayed or conditioned) during the period from the date of this Agreement until the earlier of Effective Time, or the date (iif any) the Effective Time and (ii) the first date on which Parent shall have exercised rights under this Agreement is terminated pursuant to Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith8.1, the Company shall, and shall cause each of its Subsidiaries to, (w) conduct its business and operations in the ordinary course in all material respects consistent with past practice, (x) use reasonable best efforts to maintain and preserve intact its business organization and its Subsidiaries' advantageous business organization, to keep available relationships and retain the services of its and its Subsidiaries' current officers and key employees, to preserve (y) keep in full force and effect (with the same scope and limits of coverage) all insurance policies in effect as of the date of this Agreement covering its material assets and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that z) take no action by that is intended to or would reasonably be expected to adversely affect or materially delay the Company ability of any party to obtain any necessary approvals of any Governmental Authority required for the Transactions or to perform its Subsidiaries with respect covenants and agreements under this Agreement or to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of consummate the foregoing unless such action would constitute a breach of such other provision of this Agreement)Transactions. Without limiting the generality of the foregoing, between during the period from the date of this Agreement and to the Effective Time, or the date (if any) on which this Agreement is terminated pursuant to Section 8.1, except as otherwise set forth in Section 5.1 of the Company Disclosure Schedule and except as expressly permitted or required by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawParent, the Company shall not, nor and shall it permit any of cause its Subsidiaries not to, without the prior written consent of Parent (which consent Parent shall use its commercially reasonable efforts to provide or withhold within three (3) Business Days of the Company’s request therefor, and which consent otherwise shall not be unreasonably withheld, conditioned delayed or delayedconditioned):
(a) amend incur or propose to amend its assume any Indebtedness or assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the Indebtedness or other obligations of any other Person (other than a wholly owned Subsidiary of its Subsidiaries' Charter Documents;the Company), or make or forgive any loan, advance or capital contribution to, any Person (other than a wholly owned Subsidiary of the Company), except for Indebtedness in an amount that does not exceed $1,000,000 in the aggregate.
(b) (i) adjust, split, combinecombine or reclassify any of its capital stock, reclassify voting securities or other equity interests or make any like other change in any Company Securities or Company Subsidiary Securitiesthe capital structure of the Company;
(c) make, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend (with the exception of such dividends as may have been declared but are unpaid as of the date hereof or are consistent with past practice in terms of timing and amount; provided, that the per-share amount of such dividends (which were not yet declared as of the date hereof) shall not exceed $0.35 per quarter), or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire (except for the acceptance or withholding of shares of Company Common Stock in payment of the exercise price or withholding Taxes incurred by any employee or director in connection with the exercise of Company Options or Company SARs or the vesting of Company Restricted Shares in respect of Company Common Stock granted under a Company Benefit Plan), any shares of its capital stock, voting securities or other equity interests or any securities or obligations convertible (whether in cash, currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock, property voting securities or otherwise) other equity interests (in respect ofeach case, or enter into except dividends paid by any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company subsidiary to its parent);
(cd) issue, deliver, sell, pledge, dispose of, transfer, modify grant or encumber subject to any Company Securities or Company Subsidiary Securities, Encumbrance (other than (iany Permitted Encumbrance) the issuance of any shares of Company Common Stock upon the exercise capital stock or other securities of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries or any subscriptions, options, warrants, calls, rights, “phantom” stock rights, stock appreciation rights, stock-based performance units or other rights of any kind to directors acquire shares of capital stock or officersother securities of the Company or any of its Subsidiaries, other than issuances of Company Common Stock pursuant to the exercise of Company Options or Company SARs.
(e) (i) except (w) as required by applicable Law, (x) for normal promotions or normal performance-related merit based increases in compensation base salaries or base wages made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice (including with respect to percentage levels and frequency of increases) with respect to employees with or directors of any of the Company or its Subsidiaries, in an annual base salary aggregate amount that does not to exceed $150,0002,500,000 or (y) as required by the terms of any Company Benefit Plan as in effect on the date of this Agreement, increase the wages, salaries or other compensation of any past, present or future employee of any of the Company or its Subsidiaries, or (Bii) to replace existing employees whose employment has terminatedexcept as required by applicable Law or the terms of any Company Benefit Plan as in effect on the date of this Agreement, at compensation levels and with pay or provide, or increase or accelerate the accrual rate, vesting or timing of payment or funding of, any other compensation, benefits consistent in all material respects with that or other rights of any employee of any of the employee replacedCompany or its Subsidiaries (including, without limitation, any new or increased incentive compensation (cash or equity) or severance entitlement);
(ef) acquireestablish, by merger, consolidation, acquisition of stock adopt or assetsbecome a party to any new, or otherwiseamend or terminate any existing, change-in-control, severance, termination or similar compensation agreement or arrangement with any employee, director or officer of the Company or its Subsidiaries;
(g) establish, adopt, enter into, materially amend or terminate any employee benefit plan or any Collective Bargaining Agreement, thrift, compensation or other plan, agreement, trust, policy or arrangement for the benefit of any directors, officers or employees of the Company or its Subsidiaries;
(h) accelerate the time of payment or vesting of, or invest inthe lapsing of restrictions with respect to, or funding or otherwise securing the payment of, any business compensation or Person benefits under any Company Benefit Plan or division thereof Non-U.S. Plan;
(i) enter into, terminate or make materially amend any loansCompany Benefit Plan or Non-U.S. Plan;
(j) hire any person to be employed by the Company or any of its Subsidiaries or terminate the employment of any employee of the Company or any of its Subsidiaries, advances or capital contributions to or investments in any Person (other than the Company hiring or one or more firing of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made non-executive officer employees in the ordinary course of business consistent with past practice;
(fk) (i) sell, transfer, license, sell, lease, subleasemortgage, subject to any Lien (other than Permitted Liens) encumber or otherwise dispose of any properties or assets or properties to any Person, other than (whether by way of mergerv) sales, consolidationtransfers, sale of stock or assetslicenses, or otherwise)leases, including the capital stock mortgages, Encumbrances or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant disposals to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities (w) with respect to mortgages and encumbrances, Permitted Encumbrances, (x) leases of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) real property in the ordinary course of business consistent with past practice, (iiy) except sales of properties or assets with a sale price that does not exceed $1,000,000 individually or $2,000,000 in the aggregate, and (z) sales of inventory in the ordinary course of business consistent with past practicebusiness; or (ii) cancel, modifyrelease, amend settle or terminate assign any claims against any Person that exceed $1,000,000 individually or $2,000,000 in the aggregate;
(l) enter into or commit to enter into any Contract which, if entered into prior to the date hereof would be required to be set forth in Section 3.12 of the Company Disclosure Schedule, or materially amend, become subject to or terminate, or commit or agree to materially amend, become subject to or terminate, any such Contract, any Company Material Contract Contract, or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IPLease;
(im) dischargeenter into any significant new line of business or, settleexcept as required by changes in applicable Law, compromiseregulation or policies imposed by any Governmental Authority, assign or satisfy change in any material claimrespect its current operating policies;
(n) acquire or make any investment (whether by merger, consolidation, acquisition of stock or assets, joint venture or otherwise) either by purchase of stock or securities, contributions to capital or purchase, in a single transaction or series of related transactions, of any division or business or all or any significant portion of the property or assets of any Person (other than acquisitions of stock, securities, properties or assets not in excess of $1,000,000 individually or $5,000,000 in the aggregate), or enter into any Contract, letter of intent or similar arrangement (whether or not pending before a Governmental Entityenforceable) with respect to the foregoing;
(o) make any capital expenditure (other than consistent with the Company’s existing capital expenditure plans made available to Parent prior to the date hereof) or commitment therefor or enter into any operating lease in excess of $1,000,000 individually or $2,000,000 in the aggregate;
(p) commence any Action, except (i) outside with respect to any Action in the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims in connection with a breach of this Agreement or related derivative claims, in each case except to the extent such claim is fully covered by Offer or the Merger;
(q) pay, discharge, settle or satisfy any Action, or liability, except (i) payments, discharges, settlements or satisfactions in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against on the financial statements of the Company's insurance policies , or (other ii) any such Actions or liabilities for monetary payment (in excess of insured amounts) of less than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result $500,000 individually and $2,000,000 in the imposition of aggregate and which payments, discharges, settlements or satisfactions do not impose any material restriction or obligation on the Company or any of its Affiliates (including, after the Closing, Parent and its Affiliates);
(r) form any Subsidiary;
(s) revalue in any material respect any of its properties or assets, including without limitation write off as uncollectible any notes or accounts receivable, except revaluations and write-offs in the ordinary course of business consistent with past practice;
(t) amend its articles of incorporation, bylaws or operations other similar governing documents except as may be necessary to comply with the terms of this Agreement;
(u) adopt a plan of, or resolutions providing for, complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger);
(v) implement or Affiliates or a material increase adopt any change in the Company's insurance premiums’s or any of its Subsidiaries’ Tax accounting or financial accounting principles, practices or methods, other than as may be required by applicable Law, GAAP or regulatory guidelines;
(ji) make any Tax election or take any position on a Tax Return filed on or after the date of this Agreement or adopt any method therein that is inconsistent with elections made, positions taken or methods used in preparing or filing similar returns in prior periods unless such position or election is required by applicable Law or the Code, (ii) enter into any Contract settlement or compromise of a type referenced in clause (ii)any Tax liability, (iii)) file any amended Tax Return that would result in a change in Tax liability, taxable income or loss, (iv)) change any annual Tax accounting period, (v) enter into any closing agreement relating to any Tax liability, or (viiivi) give or request any waiver of a statute of limitation with respect to any Tax Return, provided, that such election, settlement, amended Tax Return or any other action described in the foregoing portion of this Section 4.13(a5.1(w) will not require prior written consent of Parent if all such actions, in the aggregate, would not reasonably be expected to result in a cost to the Company and its Subsidiaries in excess of $1,000,000;
(x) 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 the Company or any of its Subsidiaries (other than routine employee terminations);
(ky) make terminate or permit any material change Permit to lapse, other than in accordance with the terms and regular expiration of any method of financial accounting principles such Permit, or practices, in each case except fail to apply on a timely basis for any renewal of any renewable material Permit; (z) (i) abandon, or allow to lapse, any material Company Owned Intellectual Property that is registered or subject to an application for registration, (ii) cause the termination, prior to scheduled expiration, of any license for any material Company Exclusively License Intellectual Property, without any replacement, renewal or extension of such change required by a change in GAAP rights, (iii) intentionally disclose or applicable Law;
permit the disclosure of any Trade Secrets that constitute material Company Owned Intellectual Property, or (liv) makesell, revoke transfer, assign, license or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) otherwise dispose of the Company Disclosure Letter, extend or waive the application of Owned Intellectual Property in any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of way that restricts the Company, except that no consent shall be required with respect to settlement ’s use of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practicesuch Intellectual Property; or
(o) agree or commit to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Cascade Corp)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of (i) the Effective Time termination of this Agreement and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewithClosing, the Company shall, and shall cause u-Nav Finland to (in each of its Subsidiaries to, use reasonable best efforts case except to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries extent (it being agreed and understood that no action by a) the Company or its Subsidiaries with respect such Seller is required to matters specifically addressed by any other provision of this Section 6.01 shall be deemed take, or prohibited from taking, action pursuant to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection applicable Law or (b) Acquirer shall give its prior consent in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent writing (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to carry on its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made business in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business pay its Liabilities and Taxes consistent with the Seller’s past practice and to pay or perform other obligations when due consistent with the Seller’s past practice, modifyor to contest such Liabilities, amend Taxes or terminate any Company Material Contract or waiveobligations in good faith through appropriate proceedings, release or assign any material rights or claims thereunder or and (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by consistent with its business, to use commercially reasonable efforts to (A) preserve intact its present business organization, (B) keep available the Company's insurance policies services of its present officers and the Key Employees consistent with this Agreement and (C) preserve its relationships with customers, suppliers, distributors, licensors, licensees, independent contractors and other than any applicable deductible)Persons having material business dealings with it, all with the express purpose and intent of preserving unimpaired its goodwill and ongoing businesses at the Closing Date. In addition, prior to the Closing, the Sellers and Acquirer shall cooperate in good faith with each other to facilitate the transition of the Sellers’ customers and vendors to Acquirer upon the Closing, including, but only if not limited to, obtaining any required assignments, consents, and assurances from such customers and vendors with respect to the dischargeAcquisition. Except as expressly contemplated by this Agreement, settlementneither party shall, compromise, assignment or satisfaction of such claim would not result in without the imposition of any material restriction on the business or operations prior written consent of the Company other, take or agree in writing or otherwise to take, any action that would make any of its Subsidiaries representations or Affiliates warranties contained in this Agreement untrue or a material increase incorrect in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change respect or prevent them from performing or cause them not to perform their respective agreements and covenants hereunder or knowingly cause any condition to the other’s closing obligations in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) Article 7 not to be satisfied. Without limiting the generality of the Company Disclosure Letterforegoing, extend or waive during the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of period from the date of this Agreement, Agreement and continuing until the earlier of the FIN 48 reserves applicable to that claim;
(m) acquire termination of this Agreement or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than the Closing, except as set forth in the ordinary course of business consistent in all material respects Disclosure Schedule or as required or expressly permitted by this Agreement or Law, the Company shall not, and shall cause with past practice; or
(o) agree u-Nav Finland not to, do, cause or commit to do permit any of the foregoing.following, without the prior written consent of Acquirer (such consent not be unreasonably withheld, conditioned or delayed):
Appears in 1 contract
Samples: Asset Purchase Agreement (Atheros Communications Inc)
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement in accordance with the terms set forth in ARTICLE IX of this Agreement or the Closing Date, the Company agrees that the Company and its Subsidiaries shall use commercially reasonable efforts to (except to the extent expressly contemplated by this Agreement or as consented to in writing by Diodes), (i) in all material respects, carry on their businesses in the ordinary course in substantially the same manner as heretofore conducted, pay debts and Taxes when due (subject to good faith disputes over such debts or Taxes), pay or perform other obligations when due, and use all reasonable efforts consistent with past practice and policies to preserve intact their present business organizations, and (ii) use their commercially reasonable efforts consistent with past practice to keep available the services of their present executive officers and directors and use their commercially reasonable efforts consistent with past practice to, in all material aspects, preserve their relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with them, to the end that there shall not be a Material Adverse Effect on the Company as of the Closing Date. The Company shall, and shall cause each agrees to promptly notify Diodes of its Subsidiaries toany material event or occurrence not in the ordinary course of business consistent with past practice that would have or reasonably be expected to have a Material Adverse Effect on the Company. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date termination of this Agreement and in accordance with the Effective Timeterms set forth in ARTICLE IX of this Agreement or the Closing Date, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection provided for in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawAgreement, the Company shall notnot do, nor shall it allow, cause or permit any of its Subsidiaries to, the following actions to occur with respect to the Company without the prior written consent Consent of Parent (Diodes, which consent Consent shall not be unreasonably delayed or withheld; provided, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) however, that Diodes and Merger Sub acknowledge and agree that (i) adjustthis Section 5.1 shall not give Diodes the right, splitdirectly or indirectly, combineto control or direct the operations of the Company prior to the Closing to the extent prohibited by applicable Antitrust Laws, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, and (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing Diodes shall be deemed to include have provided its written Consent for any matter of which the sale or other disposition, including at discounted prices, of supplies Company delivers a written notice to Diodes expressly identifying this Section 5.1 and inventory), or concerning which the Company has not received any written and specific objection from Diodes within five (ii5) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities days of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction delivery of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoing.notice:
Appears in 1 contract
Samples: Merger Agreement (Diodes Inc /Del/)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date execution and delivery of this Agreement by the Company and continuing until the earlier of (i) the termination of this Agreement or the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the BoardTime, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter agrees (unless it is required to take such action pursuant to this Agreement or as required by applicable Law or with the Cimatron shall give its prior written consent of Parent (in writing, which consent shall not to be unreasonably withheld, conditioned or delayed), conduct ) to carry on its business in all material respects in the usual, regular and ordinary course of business, consistent with past practice (including to pay its Liabilities and Taxes consistent with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately ’s past practices (and in any event when due), to account for any planned store closures) pay or perform other obligations when due consistent with the Company’s past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith through appropriate proceedings), and, to the extent consistent therewithwith such business, the Company shall, to use all commercially reasonable efforts and shall cause each of its Subsidiaries to, use reasonable best efforts institute all policies required to maintain and preserve intact its and its Subsidiaries' present business organization, to keep available the services of its and its Subsidiaries' current present officers and employees, to key employees and preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees licensees, independent contractors and other Persons having material business relationships dealings with it or it, all with the express purpose and intent of preserving unimpaired its Subsidiaries (it being agreed goodwill and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and ongoing businesses at the Effective Time, except . Except as otherwise expressly permitted required by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable LawAgreement, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheldCimatron, conditioned take or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change agree in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem writing or otherwise acquire, or offer to repurchase, redeem or otherwise acquiretake, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant action that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made would result in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect occurrence of any of the foregoing, changes described in Section 4.9 or any other than, action that would make any of its representations or warranties contained in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result untrue or incorrect in any material amendment, modification respect or adverse change to any term of, or material default under, any material indebtedness of prevent the Company from performing or cause the Company not to perform its agreements and covenants hereunder or cause any condition to Cimatron’s closing obligations in Section 8.1 or Section 8.3 (or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree condition to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided ’s closing obligations in Section 8.1 or made available Section 8.2) not to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingsatisfied.
Appears in 1 contract
Samples: Merger Agreement (Cimatron LTD)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date of this Agreement hereof until the earlier of the termination of this Agreement pursuant to Article 7 and the Closing Date:
(ia) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the The Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), will conduct its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted (except to the extent expressly provided otherwise in this Agreement, including, without limitation, the performance of the covenants contained herein or the undertaking of the closing actions and deliveries contemplated by Article 2, or as otherwise consented to in writing by Parent);
(b) The Company will (1) pay all material respects of its liabilities, debts and Taxes when due, except to the extent such liabilities, debts or Taxes are being contested in good faith by appropriate proceedings and for which adequate reserves according to GAAP have been established, (2) pay or perform its other obligations in the ordinary course of businessconsistent with past practice, and (3) use commercially reasonable efforts consistent with past practice to (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closuresA) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its present business organizations and its Subsidiaries' business organizationactivities, to (B) keep available the services of its and its Subsidiaries' current present officers and key employees, to and (C) preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributorspartners, licensors, licensees licensees, and other Persons others having material business relationships dealings with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoingit, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on end that its face without goodwill and ongoing businesses will be unimpaired at the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent)Closing Date;
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any The Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise will promptly notify Parent of any Company Equity Award outstanding as of the date of this Agreement in accordance with its termschange, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, occurrence or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made event not in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiariesof any change, occurrence or (C) pursuant to existing Contracts event which, individually or otherwise in the ordinary course of business consistent aggregate with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoingchanges, other thanoccurrences and events, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would could reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of have a Material Adverse Effect on the Company or which is reasonably likely to cause any of its Subsidiaries;the conditions in Article 6 not to be satisfied; and
(hd) (i) enter The Company will assure that each of the contracts entered into any new line of business by it on or make or agree to make any new capital expenditure in excess of $250,000 or that, in after the aggregate, are in excess of $500,000, other than (A) as contemplated by date hereof will not require the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition procurement of any material restriction on the business consent, waiver or operations of the Company novation or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make provide for any material change in the obligations of any method of financial accounting principles party in connection with, or practicesterminate as a result of, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) the consummation of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingTransactions.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and Except as expressly contemplated by this Agreement or to the extent that the Investors’ Representative shall cause each of its Subsidiaries tootherwise consent in writing, during the period from the date of this Agreement and continuing until the earlier of (i) the Effective Time and (ii) termination of this Agreement or the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewithClosing, the Company shall, and shall cause each member of its Subsidiaries the Company Group to, use reasonable best efforts to maintain (i) conduct its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, (ii) observe in all material respects all provisions of, and perform in all material respects all its obligations under, any Material Contract (other than in connection with the payment of the Liabilities as further described in Section 3.6(b) of the Disclosure Schedule), (v) preserve intact its present business organizations (other than as part of the reorganization and its restructuring of Subsidiaries' business organization, as listed in Schedule 1.11.1(c) of the Disclosure Schedule), (iii) use reasonable efforts to keep available the services of its and its Subsidiaries' current present officers and key employees, (vii) use best efforts to preserve the relationships with its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees licensees, and other Persons others having business dealings with them, and (viii) use best efforts to enter into legally binding agreements incorporating all material terms and conditions of any new material arrangement, obligation, commitment or undertaking of any nature relating to any new or existing customer, supplier, distributor, licensor, licensee or Person with whom any member of the Company Group has any material business relationships dealings, all with it or the goal of preserving unimpaired the goodwill (such term not to refer to its Subsidiaries (it being agreed meaning under GAAP) and understood that no action by ongoing business of the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of Group at the foregoing unless such action would constitute a breach of such other provision of this Agreement)Closing. Without limiting During the generality of the foregoing, between period from the date of this Agreement and continuing until the Effective Time, except as otherwise expressly permitted by earlier of the termination of this Agreement or as set forth on Section 6.01 the Closing, the Company shall, and shall cause each member of the Company Disclosure LetterGroup to pay its debts, Liabilities and Taxes, and pay or perform other material obligations when due (including accounts payable) substantially in accordance with the relevance of which disclosure guidelines presented to the appropriate subsection Investors prior to the date hereof, except to the extent that the Investors’ Representative shall otherwise consent in writing (which shall include payment of the Liabilities listed in Section 3.6(b) of the Disclosure Schedule). The Company shall promptly notify the Investors’ Representative of any event or occurrence or emergency not in the ordinary course of business of the Company Group, as a whole, and any material event involving the Company Group, as a whole, that arises during the period from the date of this Section 6.01 is reasonably apparent on its face without Agreement and continuing until the necessity earlier of repetitive disclosure the termination date of this Agreement or cross-reference, or as required by applicable Lawthe Closing. Furthermore, the Company shall notpromptly notify the Investors’ Representative in writing of any notice or other communication from any third party alleging that the consent of such third party is or may be required in connection with the execution, nor delivery or performance of this Agreement or any Related Agreement or the consummation of the transactions contemplated hereby and thereby; and the Company shall it promptly advise the Investors’ Representative in writing of any material legal proceeding or material claim threatened, commenced or asserted against or with respect to any member of the Company Group. No notification given to the Investors’ Representative pursuant to this ARTICLE IV shall limit or otherwise affect any of the representations, warranties, covenants or obligations of the Company contained in this Agreement. In addition to the foregoing, from and after the date of this Agreement, except as expressly contemplated by this Agreement, or pursuant to a Legal Requirement (in each case after consultation with counsel and, to the extent reasonably feasible, prior written notification of at least five (5) days to the Investors’ Representative), the Company shall not and shall not permit any member of its Subsidiaries tothe Company Group, to do any of the following, without the prior written consent of Parent (the Investors’ Representative, which consent shall not be unreasonably withheldwithheld and which shall be given within (3) three Business Days of receipt of a reasonably detailed request accompanied by all reasonable necessary documentation and information, conditioned provided however, that, except with respect to clauses (a), (b), (c), (o) or delayed(s) below, in the event that: (i) the Investors’ Representative denies in writing the taking of an action pursuant to this Section, the Company (or such other member of the Company Group) shall nevertheless be permitted to take such action if following the Investors’ Representative’s denial such action is brought to the vote of and approved by the Company’s Board of Directors (and in the case of subsection (p) below, subject to the limitations set forth therein), and (ii) the Investors’ Representative does not respond to any such request pursuant to this Section, the Company (or such other member of the Company Group) shall nevertheless be permitted to take such action following the lapse of said three (3) Business Days period (and in the case of subsection (p) below, subject to the limitations set forth therein):
(a) amend cause or propose permit any amendments to amend its or any organizational documents, except as required in connection with the reorganization and restructuring of its Subsidiaries' Charter Documentsthe Company’s Subsidiaries disclosed in Section 1 of the Disclosure Schedule;
(b) (i) adjustdeclare, splitset aside, combine, reclassify or pay any dividends on or make any like change other distributions (whether in cash, stock or property) in respect of any Company Securities Shares, or split, combine or reclassify any Company Subsidiary SecuritiesShares, (ii) or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for Company Shares, or repurchase, redeem or otherwise acquire, directly or offer to repurchase, redeem or otherwise acquireindirectly, any Company Securities Shares (or options, warrants or other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parentrights exercisable therefor);
(c) issue, deliver, sell, pledge, dispose of, transferencumber, modify deliver or encumber authorize, agree or commit to issue, sell, pledge, dispose of or deliver any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class or any other ownership interest (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) of any member of the Company Securities or Company Subsidiary SecuritiesGroup, other than (i) the issuance of shares Company Shares issued upon exercise of Company Common Stock upon Options or Company Warrants outstanding on the exercise of any Company Equity Award outstanding as date hereof and listed on Section 3.2 of the date of this Agreement in accordance with its terms, Disclosure Schedule; and (ii) the issuance of shares grants of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation Options made in the ordinary course of business in amounts and other terms consistent in all material respects with past practice, not to exceed, in the aggregate, 450,000 Company Shares to be granted to non-senior employees and 300,000 to be granted in connection with the recruitment of senior officers to the Company Group;
(d) make any expenditures or enter into any new commitment or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of exceeding $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(e) pay, discharge, release, waive or satisfy, or enter into any commitment to do the same, any Liability, other than the payment, discharge or satisfaction in the ordinary course of business, of Liabilities when they become due;
(f) adopt or change accounting methods or practices (iincluding any change in depreciation or amortization policies) transferor revalue any of its assets (including writing down the value of inventory or writing off notes or accounts receivable otherwise than in the ordinary course of business), license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) in order to conform with GAAP or otherwise dispose of any assets or properties (whether as required by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company’s auditors. It is acknowledged that the Company has, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions is and intends to continue to modify its accounting practices based on the recommendations and findings of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiariesexpert advisors engaged to assist the Company to complete the 2006 Audit Reports;
(g) make or change any material election in respect of Taxes, enter into any closing agreement, settle any claim or assessment in respect of Taxes (other than settlement for payments below $250,000), consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes, or (C) pursuant to existing Contracts or otherwise enter into intercompany transactions which are not in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation or as otherwise presented to the foregoing Investors prior to the date hereof;
(h) incur any indebtedness, or make any loan to any Person or guarantee any indebtedness of any Person (other than the Company’s Subsidiaries), or purchase debt securities of any Person, or amend the terms of any outstanding loan agreement, except as set forth in the Bank Agreements; grant of credit to customer on customary terms in the ordinary course of business consistent with past practice shall not be deemed to include the sale constitute a loan under this clause;
(i) commence, discharge, compromise or settle any lawsuit, threat of any lawsuit or proceeding or other dispositioninvestigation against, including at discounted pricesany member of the Company Group, except for discharging, compromising or settling of supplies claims or lawsuits arising from the Company Group’s ordinary course of business and inventory)which do not exceed $250,000 individually or are otherwise within the coverage of the product liability insurance maintained by the Company Group;
(j) (a) sell, lease, license or transfer to any Person any material rights to any Company Intellectual Property or enter into any new Contract that would reasonably be likely to fall within the definition of a “Material Contract” or materially modify any existing Material Contract, or (iib) adopt materially change pricing or effect a plan royalties practices related to the customers or licensees of complete or partial liquidationany member of the Company Group, dissolution, restructuring, recapitalization or other reorganizationexcept as listed in Schedule 1.1(c) of the Disclosure Schedule;
(gk) repurchase, prepay or incur enter into any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue Contract to purchase or sell any debt securities or optionsinterest in real property, warrants, calls or other rights to acquire grant any debt securities of the Company or security interest in any of its Subsidiaries, guarantee any debt securities of another Personreal property, enter into any “keep well” material lease, sublease, license or other Contract occupancy agreement with respect to maintain any financial statement condition real property or alter, amend, modify or terminate in any material respect any of the terms of any Lease Agreements, except for the currently contemplated sale by the Company and leaseback to the Company of the real property located in Salt Lake City, Utah, as disclosed on Section 3.8 of the Disclosure Schedule;
(l) enter into or alter, or commit to enter or alter any strategic alliance, joint venture, partnership, or other Person business affiliation;
(m) adopt or amend any Company Employee Plan, enter into, amend or renew any Employment Agreement or consulting agreement, pay, declare or agree to pay any bonus, severance, termination or special remuneration to any employee or consultant, or increase or modify the salaries, wage rates, or other compensation (including, without limitation, any equity-based compensation) of any employee or consultant, except for (i) recruitment or engagement of employees or consultants (other than officers and senior executives) in the ordinary course of business upon terms and conditions that are consistent with the Company Group past practice, (ii) update of salary and other compensation terms of employees or consultant (other than officers) in the ordinary course of business consistent with past practice; and (iii) payments made pursuant to written Contracts outstanding on the date hereof as disclosed in Section 3.11(a) (i) of the Disclosure Schedule or to employees or consultant in the ordinary course of business consistent with past practice;
(n) enter into any arrangement having Contract in which any officer, director, employee, consultant, agent or shareholder of the economic Company (or any member of their immediate families) has an interest under circumstances that, if entered immediately prior to the date hereof, would require that such Contract be listed on Section 3.11(a)(i) of the Disclosure Schedule;
(o) appoint directors to the Company;
(p) (i) cancel, amend or renew any material insurance policy (except for renewals of insurance policies on the same terms with the payment of premium not to exceed 110% of the premium paid in respect of the policy that is being renewed), and (ii) purchase a run-off insurance policy with respect to directors’ and officers’ liability insurance relating to actions or omissions at or prior to the Closing Date of directors and officers of the Company Group serving prior to the Closing Date, in their capacities as such, provided however, that even if the Investors’ Representative’s consent is not granted for the purchase of such policy within 3 Business Days, the Company shall be permitted to purchase such policy with premiums not to exceed $3,000,000 upon approval of the Company’s Board of Directors, and if insurance coverage can only be obtained at a premium in excess of such amount, the Company shall obtain and maintain one or more policies with the greatest coverage available for a premium equal to such amount (the run-off policy purchased in accordance with this subsection, the “Run-Off Policy”);
(q) enter into or amend any agreement pursuant to which any other party is granted exclusive rights or “most favored party” rights of any type or scope with respect to any of its products, technology, Intellectual Property or business, or containing any non-competition covenants or other restrictions relating to its business activities, other than standard distribution or reseller agreements in the ordinary course of business consistent with past practice;
(r) execute any Contract, or commit to execute any Contract, that has or may reasonably be expected to have the effect of prohibiting, limiting, restricting or impairing in any material respect any business practice of any member of the foregoingCompany Group, other thanany acquisition of property (tangible or intangible) by any member of the Company Group, the conduct of business by any member of the Company Group, or otherwise limiting the freedom of any member of the Company Group to engage in each caseany product line or to compete with any Person, borrowings and repayments under the Company's existing revolving credit facility expect for executing distribution agreements in the ordinary course of business consistent with past practice, substantially on terms as disclosed to the Investors’ in writing;
(s) acquire or take any action (other than agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term assets of, or material default underby any other manner, any material indebtedness of the Company business or any of its Subsidiaries;
(h) (i) enter into any new line of corporation, partnership, association or other business organization or make division thereof, or otherwise acquire or agree to make acquire any new capital expenditure in excess of $250,000 assets which are material, individually or that, in the aggregate, are in excess of $500,000to its and its Subsidiaries’ business, other than (Aas part of the reorganization and restructuring of Subsidiaries, as listed in Schedule 1.1(c) as contemplated by of the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IPDisclosure Schedule;
(it) dischargeapply for or obtain funds under any grant, settleincentives, compromise, assign or satisfy tax benefits and subsidies filed with any material claim, whether or not pending before a Governmental Entity, (iexcept for obtaining funds under such grants or applications thereto disclosed on Section 3.11(a)(xix) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiumsDisclosure Schedule;
(ju) enter into incur any Contract of a type referenced in clause (ii)liquidated damages or become obligated to provide any credit, (iii)allowance, (iv)return, (v) re funds or (viii) of Section 4.13(a);
(k) make similar concession to any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local customer or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases third party other than in the ordinary course of business consistent (other than as may result in connection with the payment of the Liabilities as further described in Section 3.6(b) of the Disclosure Schedule);
(v) take, or agree in writing or otherwise to take, any of the actions described in Sections 5.1(a) through 5.1(u) hereof, or any other action that would (i) prevent the Company from performing, or cause the Company not to perform in all material respects with past practice; or
any covenant under this Agreement and the Related Agreements, (oii) agree cause or commit result in any of its representations and warranties contained herein being untrue or incorrect, or (iii) cause or result in a challenge to do the validity or enforceability of the this Agreement, the Bank Agreements and the Related Agreements, or any of the foregoingtransactions contemplated hereby or by the Bank Agreements or the Related Agreements. For clarification purposes, any actions taken in accordance to the guidelines presented to the Investors prior to the date hereof shall not be deemed as a breach of subsections (i) and (ii) above.
Appears in 1 contract
Samples: Purchase Agreement (Lumenis LTD)
Conduct of Business of the Company. The During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement and the Effective Time, the Company shallagrees (unless the Company is required to take such action pursuant to this Agreement or Acquirer shall give its prior consent in writing which consent shall not be unreasonably withheld) to carry on its business in the usual, regular and ordinary course consistent with past practice and in any event consistent with the Operating Plan provided prior to the date of this Agreement to Acquirer (including continuing to hire new employees at a rate at least at the levels provided in the Operating Plan; any material deviations from, or material modifications to, the Operating Plan shall cause each be required to be approved in advance by Acquirer), to pay its Liabilities and Taxes consistent with the Company’s past practices (and in any event when due), to pay or perform other obligations when due consistent with the Company’s past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith through appropriate proceedings), and, to the extent consistent with such business, to use all commercially reasonable efforts and institute all policies required to preserve intact its present business organization, keep available the services of its Subsidiaries topresent officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, independent contractors and other Persons having business dealings with it, all with the express purpose and intent of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. Except as expressly contemplated by this Agreement, the Company shall not, without the prior written consent of Acquirer, take or agree in writing or otherwise to take, any action that would make any of its representations or warranties 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 agreements and covenants hereunder or knowingly cause any condition to Acquirer’s closing obligations in Section 7.1 or Section 7.3 not to be satisfied. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, (i) the Effective Time Company shall cause its officers to report regularly to Acquirer concerning the status of the Company’s business and notify Acquirer of any materially negative event known to the Company involving or adversely affecting the Company or its businesses, and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as set forth in the Disclosure Schedule or as required or expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall notnot do, nor shall it cause or permit any of its Subsidiaries tothe following, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoing.Acquirer:
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of (ia) the Effective Time termination of this Agreement and (iib) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the BoardClosing, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter agrees (unless the Company is otherwise required to take such action pursuant to this Agreement or as required by applicable Law or with the Purchaser shall otherwise give its prior written consent of Parent (not in writing) to be unreasonably withheld, conditioned or delayed), conduct carry on its business in all material respects substantially in the usual, regular and ordinary course of business, substantially consistent with past practice (including practice, to pay its Liabilities and Taxes consistent with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately ’s past practices, to account pay or perform other obligations when due consistent with the Company’s past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith and for any planned store closures) which adequate reserves have been established), and, to the extent consistent therewithwith such business, the Company shall, and shall cause each of its Subsidiaries to, to use commercially reasonable best efforts to maintain and preserve substantially intact its and its Subsidiaries' present business organization, to keep available the services of its and its Subsidiaries' current present officers and employees, to key employees and preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees licensees, independent contractors and other Persons having material business relationships dealings with it or it, all with the express purpose and intent of preserving substantially unimpaired its Subsidiaries (it being agreed goodwill and understood that no action ongoing businesses at and after the Closing. Except as expressly contemplated by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheldPurchaser, conditioned take or delayed):
(a) amend agree in writing or propose otherwise to amend its take, any action that would result in the occurrence of any of the changes described in Section 2.9 or any other action that would make any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify representations or make any like change warranties contained in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, untrue or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or incorrect when made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect; provided, any existing employment or consultinghowever, bonus, severance, retirement, retention, change that nothing in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing Section 5.1 shall be deemed to include create a condition to Purchaser’s obligation to effect the sale Acquisition that the representations and warranties of AE and the Company be true and correct as of the Closing. Neither the Company nor AE shall, without the prior written consent of Purchaser, take or other dispositionagree in writing or otherwise to take, including at discounted prices, of supplies and inventory)any action intended to, or (ii) adopt or effect a plan of complete or partial liquidationthat would, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of prevent the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” AE from performing (or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of cause the Company or any of AE not to perform) its Subsidiaries;
(h) (i) enter into any new line of business agreements and covenants hereunder or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parentintended to, or (B) that would, cause any condition to Purchaser’s closing obligations in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend Section 7.1 or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit Section 7.3 not to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingsatisfied.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the BoardClosing, except as expressly permitted contemplated by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter Agreement or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed)Royal Gold, conduct its business in all material respects in the ordinary course of business, business consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) practice, and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use its commercially reasonable best efforts to preserve substantially intact the Contributed Assets (including maintaining the Tetlin Lease and all claims; it being understood that Company or its Affiliate shall timely pay any amounts due and owing under the Tetlin Lease and in order to maintain the claims) and preserve intact its and its Subsidiaries' ’ business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Timeearlier of the termination of this Agreement and the Closing, except as otherwise expressly permitted contemplated by this Agreement or as set forth on Agreement, including pursuant to Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law4.04, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
Royal Gold: 6 Execution Version (a) amend Enter into, create, incur or propose assume (i) any borrowings under capital leases relating to amend its the Contributed Assets or (ii) any of its Subsidiaries' Charter Documents;
obligations which would have a Company Material Adverse Effect; (b) (i) adjustSell, splittransfer, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquirelease, or offer to repurchase, redeem or otherwise acquire, permit the incurrence of any Company Securities Lien (other than any Permitted Lien) on, any of the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary SecuritiesContributed Assets or, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
Contributed Assets; (c) issue, deliver, sell, pledge, dispose of, transfer, modify Enter into any agreements or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior commitments relating to the date of this Agreement that has been disclosed or made available to ParentContributed Assets with another Person, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made except on commercially reasonable terms in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend business; (d) Violate in any material respect, respect any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of Law applicable the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
Contributed Assets; (e) acquireViolate in any material respect any Contract or Governmental Consent applicable to the Contributed Assets; (f) Terminate or amend the Tetlin Lease; (g) Commence a Legal Action which would affect in any adverse manner the Contributed Assets; (h) Purchase, by merger, consolidation, acquisition of stock or assetslease, or otherwiseotherwise acquire any assets relating to the Contributed Assets, except for supplies, materials, services and equipment purchased, leased, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than acquired by the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) ; (i) transferEnter into any royalty, licensestreaming, sellfinancing, lease, sublease, subject to any Lien (other than Permitted Liens) joint venture or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation partnership agreement relating to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
Contributed Assets; (j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with With respect to settlement of a pending Tax claim for no more than 110% of the amountContributed Assets, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business, (i) make any changes in capital expenditures or deferrals of capital expenditures; or (ii) change any of its business consistent policies; (k) Amend the terms of its certificate of incorporation or bylaws in all any manner that would be reasonably likely to materially impede or delay the consummation of the Transactions; (l) With respect to the Contributed Assets, make or change any election in respect of Taxes, adopt or change any accounting method in respect of Taxes, file any amendment to a Tax return, enter into any closing agreement with a Governmental Entity relating to Taxes, settle any claim or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of material respects with past practice; or
(o) agree or commit to do Taxes if any of the foregoing.foregoing could reasonably be expected to adversely and materially impact the Company or Royal Gold; (m) Intentionally take any other action or fail to exercise commercially reasonable efforts to take any action that would cause a Company Material Adverse Effect; or (n) Enter into any Contract or agree, in writing or otherwise, to take any of the actions described in Section 4.01(a) through Section 4.01(m) above. 7 Execution Version Section 4.02
Appears in 1 contract
Samples: Master Agreement
Conduct of Business of the Company. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement and the Effective Time, the Company agrees (unless New Focus shall give its prior consent in writing) to carry on its business in the ordinary course consistent with past practice, to pay its Liabilities and Taxes consistent with the Company's past practices (and in any event when due), to pay or perform other obligations when due consistent with the Company's past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith through appropriate proceedings and for which a adequate reserves have been established), and, to the extent consistent with such business, to use all commercially reasonable efforts and institute all policies required to preserve intact its present business organization, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, independent contractors and other Persons having business dealings with it, all with the express purpose and intent of preserving unimpaired its goodwill and ongoing businesses at the Effective Time. The Company shallshall not, and shall cause each without the prior written consent of New Focus, take or agree in writing or otherwise to take, any action that would result in the occurrence of any of the changes described in Section 2.9 or any other action that would make any of its Subsidiaries torepresentations or warranties 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 agreements and covenants hereunder or cause any condition to New Focus's closing obligations in Section 6.1 or Section 6.3 not to be satisfied. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date termination of this Agreement and or the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall notnot do, nor shall it cause or permit any of its Subsidiaries tothe following, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoing.New Focus:
Appears in 1 contract
Samples: Merger Agreement (New Focus Inc)
Conduct of Business of the Company. The Company shallExcept as expressly permitted by this Agreement or as Parent may otherwise consent to or approve in writing which shall be deemed to have been duly given if delivered personally, facsimiled or emailed on and shall cause each of its Subsidiaries toafter the date hereof and prior to the Closing Date, during the period from the date of this Agreement until the earlier of (i) to the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the BoardTime, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct and its business in all material respects Subsidiaries shall operate in the ordinary course Ordinary Course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) Business and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use commercially reasonable best efforts to maintain and operate in compliance with all applicable Laws, to preserve intact its and its Subsidiaries' current business organization, to keep available the services of its and its Subsidiaries' current officers and other employees, to preserve its cash, and to preserve its Subsidiaries' present relationships with those persons having business dealings with it, including vendors and goodwill with customers, suppliersto the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. Furthermore, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 covenants, represents and warrants that from and after the date hereof, unless Parent shall otherwise expressly consent in writing which shall be deemed to be a breach have been duly given if delivered personally, facsimiled or emailed, the Company and each of its Subsidiaries shall use its commercially reasonable efforts to: (a) keep in full force and effect insurance comparable in amount and scope of coverage to insurance now carried by it; and (b) pay all accounts payable and other obligations, when they become due and payable, in the foregoing unless such action would constitute a breach Ordinary Course of such other provision Business consistent with the provisions of this Agreement), except if the same are contested in good faith, and, in the case of the failure to pay any material accounts payable or other obligations which are contested in good faith, only after consultation with Parent. Without Except as set forth on Schedule 5.1, without limiting the generality of the foregoingforegoing (but subject to the above exceptions), between during the period from the date of this Agreement and to the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which provided, that with respect to any action in the Ordinary Course of Business, such consent shall not be unreasonably withheld, delayed or conditioned and, in each such case, shall be deemed to have been duly given if delivered personally, facsimiled or delayed):emailed), neither the Company nor any of its Subsidiaries shall:
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend dividends on, or distribution (whether in cash, stock, property or otherwise) make any other distributions in respect of, any of its Shares or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities other equity interests (other than dividends from a direct or indirect wholly owned Subsidiary distributions of cash or cash equivalents), (ii) split, combine or reclassify any of its Shares or any other equity interests or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any of its Shares or any other equity interests, except for issuances of capital stock upon the exercise of options outstanding as of the Company date hereof in accordance with their present terms, (iii) purchase, redeem or otherwise acquire any Shares or any other securities thereof or any rights, warrants or options to its parentacquire any such shares or other securities (except for the repurchase of shares of Common Stock pursuant to the terms of any Contract in existence on the date hereof and listed on Schedule 5.1(a)) or (iv) make any other actual, constructive or deemed distribution in respect of any Shares or other equity interests or otherwise make any payments to Stockholders in their capacity as such (other than dividends or distributions of cash or cash equivalents);
(cb) issue, deliver, sell, pledgepledge or otherwise encumber or subject to any Lien any Shares, dispose ofany other voting securities or other equity interests or any securities convertible into, transferor any rights, modify warrants or encumber options to acquire, any Company Securities such Shares, voting securities or Company Subsidiary Securitiesother equity interests or convertible securities, other than (i) the issuance except for issuances of shares of Company Common Stock capital stock upon the exercise of any Company Equity Award options outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement hereof in accordance with their present terms, ;
(iiic) the issuance amend its certificate of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, incorporation or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notesbylaws or organizational documents;
(d) (i) except as required acquire or agree to acquire by applicable Law merging or required consolidating with, or permitted by purchasing a substantial portion of the stock or assets of, or by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parentother manner, increase the compensation payable or that could become payable by the Company any business or any of its Subsidiaries to directors or officersPerson and, other than increases in compensation made in without limiting the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as generality of the date of this Agreementforegoing, or make shall not create any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that Subsidiary of the employee replacedCompany;
(e) acquiresell, by mergerlease, consolidationlicense, acquisition mortgage or otherwise encumber or subject to any Lien or otherwise dispose of stock any of the Property (including securitizations), other than in the Ordinary Course of Business;
(f) incur any Indebtedness for borrowed money or assetsissue any debt securities, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to to, or investments in in, any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 advances for reasonable business expenses to employees in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course Ordinary Course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwiseBusiness), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase(i) assume, prepay guarantee or incur endorse the obligations of any indebtedness for borrowed money or guarantee any such indebtedness of another other Person, issue any support guarantees or sell otherwise become responsible for the obligations of any debt securities Person or options(ii) except in the Ordinary Course of Business, warrantsindemnify any other person;
(h) take, calls or other rights agree to acquire commit to take, any debt securities action that would or is reasonably likely to result in any of the Company conditions to the Merger not being satisfied, or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having that would impair the economic effect ability of any of the foregoing, other than, Parties to consummate the Merger in each case, borrowings and repayments under accordance with the Company's existing revolving credit facility terms hereof or delay such consummation;
(i) make any capital expenditure or expenditures that exceed Seventy-Five Thousand Dollars ($75,000) in the ordinary course of business consistent with past practice, aggregate;
(i) make any material Tax election or take any action material position on any material Tax Return filed on or after the date of this Agreement; (ii) adopt any material accounting method that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods; (iii) file any material amended Tax Returns or claims for Tax refunds; (iv) enter into any closing agreement related to any material Tax; (v) surrender any material tax claim, audit or assessment; (vi) surrender any right to claim a material Tax refund, offset or other reduction in Tax liability surrendered; (vii) consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment; or (viii) settle or resolve any material Tax controversy;
(k) except as required under an existing Plan, (i) grant or commit to grant any employee, Stockholder, officer, director or agent any increase in wages, bonus, severance, profit sharing, retirement, insurance or other compensation or benefits (other than an increase in wages in the entry Ordinary Course of Business for any individual other than a director or officer of the Company), (ii) amend or terminate any Plan, except to the extent necessary to comply with applicable Law, (iii) establish any new compensation or benefit plan or arrangement, or (iv) enter into this Agreement and the other Company Transaction Documentsany employment, consulting, retention, termination, severance or collective bargaining agreement;
(l) take, or agree to commit to take, any action that would or is reasonably be expected likely to result in the acceleration of vesting or a right to exercise any material amendment, modification options or adverse change to any term of, or material default under, any material indebtedness of the Company or warrants;
(m) revalue any of its Subsidiariesassets, 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 as required by GAAP;
(hn) (i) enter into any new contract or agreement, other than in the Ordinary Course of Business, or amend in any material respect any of the Contracts listed on Schedules 2.12(a) or 2.14(c); or (ii) enter into any contract, agreement, commitment or arrangement providing for, or amend any contract, agreement, commitment or arrangement to provide for, the taking of any action that would be prohibited hereunder;
(o) 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 Business of liabilities reflected or reserved against in the Balance Sheet or incurred in the Ordinary Course of Business since the date of the Balance Sheet;
(p) settle or compromise any pending or threatened suit, action or claim relating to the transactions contemplated hereby;
(q) enter into any agreement or arrangement that would limit or restrict the Surviving Company and its Affiliates (including Parent) or any successor thereto, from engaging or competing in any line of business or make or agree to make in any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IPgeographic area;
(ir) dischargesell, settletransfer or grant any license with respect to Owned Company Intellectual Property other than non-exclusive licenses granted in the Ordinary Course of Business;
(s) fail to pay any fee, compromisemake any filing or take any action necessary to maintain the existence or validity of, assign and the ownership or satisfy right to use or otherwise exploit, any Intellectual Property that is material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiumsSubsidiaries;
(jt) enter into abandon, lose the right to use or otherwise exploit, or fail to maintain, any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any Intellectual Property material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) to the business of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practiceits Subsidiaries; or
(ou) agree authorize, or commit or agree to do take, any of the foregoingforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Ixia)
Conduct of Business of the Company. The During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement and the Closing, the Company shallagrees (unless the Company is required to take such action pursuant to this Agreement or the Purchaser shall give its prior consent in writing which consent shall not be unreasonably withheld or delayed) to carry on the Business in the usual, regular and ordinary course consistent with past practice and in any event consistent with the Forecast provided prior to the date of this Agreement to the Purchaser, to pay all Liabilities and Taxes applicable to the Business consistent with the Company's past practices (and in any event when due), to pay or perform other obligations applicable to the Business when due consistent with the Company's past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith through appropriate proceedings), and, to the extent consistent with the Business, to use all commercially reasonable efforts to preserve unimpaired the goodwill and ongoing business of the Purchased Assets until the Closing. Except as expressly required by this Agreement, the Company shall cause each not, without the prior written consent of the Purchaser (which consent will not be unreasonably withheld or delayed) take or agree in writing or otherwise to take, any action that would reasonably be anticipated to make any of its Subsidiaries torepresentations or warranties 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 agreements and covenants hereunder or cause any Closing condition not to be satisfied. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date termination of this Agreement in accordance with its termsArticle 8 or the Closing, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, Ancillary Agreements or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiariesshall not do, cause or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of permit any of the foregoingfollowing, other than, in each case, borrowings and repayments under without the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness prior written consent of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budgetPurchaser, which has been provided consent will not be unreasonably withheld or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoing.delayed:
Appears in 1 contract
Conduct of Business of the Company. The Company shall, covenants and shall cause each of its Subsidiaries toagrees that, during the period from the date of this Agreement until to the earlier of time (ithe “Effective Time”) the Effective Time and (ii) Shares are taken up by the first date on which Purchaser as contemplated herein unless Purchaser Parent or the Purchaser shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except otherwise agree in writing or as otherwise expressly contemplated or permitted by this Agreement, Agreement or as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent Schedule 4.1:
(not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closuresa) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, conduct its and their respective business only in and not take or omit to take any action except in, the usual, ordinary and regular course of business and consistent with past practice, or as may be required in order to comply with the terms of this Agreement;
(b) the Company shall, and shall cause each of its Subsidiaries to:
(i) use its commercial reasonable best efforts to maintain and preserve intact its business operation, business organization and its Subsidiaries' business organizationgoodwill, to keep available in all material respects the services of its and its Subsidiaries' current officers and employees, employees as a group and to preserve its and its Subsidiaries' present the goodwill of those having business relationships and goodwill with customersit, including maintaining satisfactory relationships with suppliers, lessorsagents, distributors, licensors, licensees customers and other Persons others having material business relationships with it;
(ii) not take any action, (A) that would render, or that reasonably may be expected to render, any representation or warranty made by it or its Subsidiaries in this Agreement untrue in any material respect at any time prior to the Effective Time if then made, (it being agreed and understood B) that no action by the Company or its Subsidiaries with respect would be reasonably likely to matters specifically addressed by result in any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action conditions set forth in Schedule B to not be satisfied or (C) that would constitute be reasonably likely to result in a breach violation of such other any provision of this Agreement). Without limiting ; and
(iii) promptly notify the generality Purchaser orally and in writing of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure any Material Adverse Effect that becomes known to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, Company;
(c) the Company shall not, nor and shall it not permit any of its Subsidiaries to, without directly or indirectly do or permit to occur any of the prior written consent following, whether directly or indirectly:
(i) issue, sell, pledge, lease, dispose of, grant of Parent any interest in, encumber or agree to issue, sell, pledge, lease, dispose of, grant any interest in or encumber (which consent shall not be unreasonably withheldor permit any of its Subsidiaries to issue, conditioned sell, pledge, lease, dispose of, grant any interest in, encumber or delayedagree to issue, sell, pledge, lease, dispose of, grant any interest in or encumber):
(aA) any additional shares of, or any options, warrants, calls, conversion privileges or rights of any kind to acquire any shares of the Share Capital of the Company or any of its Subsidiaries (other than pursuant to the exercise of share option entitlements currently outstanding), or
(B) any assets of the Company or any of its Subsidiaries (except for (i) sales of product licenses and inventory in the ordinary course of business and (ii) sales and other dispositions of equipment and other personal property not required in running the current business operations of the Company and having an aggregate acquisition cost not in excess of $100,000);
(ii) amend or propose to amend its the articles of incorporation, by-laws or other comparable organizational documents of the Company or those of any of its Subsidiaries' Charter Documents;
(biii) (i) adjust, split, combine, combine or reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquireoutstanding Shares, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or other distribution (whether payable in cash, stockshare, property or otherwise) in respect of, or enter into any Contract otherwise with respect to the voting of, any Company Securities Shares or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary securities of the Share Capital of the Company or any of the Company’s non-wholly-owned Subsidiaries or take or authorize any action in order to its parent)implement any of the foregoing;
(civ) issueredeem, deliverpurchase or offer to purchase (or permit any of its Subsidiaries to redeem, sell, pledge, dispose of, transfer, modify purchase or encumber offer to purchase) any Company Securities Shares or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as securities of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as Share Capital of the date Company or any of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding its Subsidiaries except to satisfy legally binding commitments existing as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(dv) acquire or agree to acquire (iby merger, amalgamation, acquisition of share or assets or otherwise) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to ParentPerson, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officerscorporation, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund partnership or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, business organization or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employeesdivision or, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest inpractice, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, assets having an aggregate acquisition cost not in excess of $250,000 in the aggregate, except 150,000;
(vi) (A) pursuant incur, commit to incur any Indebtedness or issue any debt securities or amend the terms and conditions of any existing Contracts that have been disclosed or made available to Parent and Indebtedness, except for the borrowing of working capital in the ordinary course of business consistent with past practice, (B) employee loans or advances for travelassume, businessguarantee, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) endorse or otherwise dispose become liable or responsible (whether directly, contingently or otherwise) for the obligations of any assets other Person (including any Indebtedness), (C) pay, discharge or properties satisfy any liabilities or obligations (whether by way of mergerabsolute, consolidationaccrued, sale of stock or assets, contingent or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice and in accordance with their terms, (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale D) make any loans, advances or other disposition, including at discounted prices, of supplies and inventory)capital contributions to, or (ii) adopt or effect a plan of complete or partial liquidationinvestments in, dissolution, restructuring, recapitalization or any other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue except for loans, advances, capital contributions or sell investments between any debt securities wholly-owned Subsidiary of the Company and the Company or options, warrants, calls another wholly-owned Subsidiary of the Company or other rights (E) cancel or forgive any Indebtedness owed to acquire any debt securities of the Company or any of its Subsidiaries;
(vii) commit to make any capital expenditures, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having agreement obligating the economic effect Company or its Subsidiaries to make capital expenditures, exceeding $400,000 in the aggregate;
(viii) (A) pay, discharge, settle or compromise any claim, action, litigation, arbitration or proceeding brought by any current, future, former or purported holder of any securities of the foregoingCompany in connection with the transactions contemplated by this Agreement or the Offer prior to the Effective Time or (B) pay, discharge, settle or compromise any claim, action, litigation, arbitration or proceeding, other thanthan (x) any such payment, discharge, settlement or compromise that involves solely a monetary payment not in each caseexcess of $125,000 individually or $250,000 in the aggregate or (y) any settlement, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than of customer warranty claims consistent with the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result Company’s warranty claim policies in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness effect as of the Company or any of its Subsidiariesdate hereof;
(hA) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, terminate, modify, renew or waive any material provision of any Material Contract other than normal renewals of such Material Contracts without materially adverse changes, additions or deletions of terms, or (B) enter into or renew any agreement, contract, lease, license or other binding obligation of the Company or any of its Subsidiaries (i) containing (1) any limitation or restriction on the ability of the Company or any of its Subsidiaries to engage in any type of activity or business, (2) any limitation or restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or any of its Subsidiaries is or would be conducted, or (3) any limit or restriction on the ability of the Company or any of its Subsidiaries to solicit customers or employees, (ii) that would reasonably be expected to materially delay or prevent the consummation of the Offer or any of the transactions contemplated by this Agreement, (iii) that involves or would reasonably be expected to involve payments by the Company or any of its Subsidiaries in excess of $250,000 annually or $500,000 in the aggregate over the term of the contract and that is not terminable within 30 days of the Effective Time without additional payment, or (iv) that, if effective as of the date hereof, would have been a Material Contract, other than in the ordinary course of business;
(x) except in the ordinary course of business consistent with past practice, modifymake or change any Tax elections (unless required by applicable Law), amend file any amended Return, enter into any closing agreement, settle or terminate any Company Material Contract or waive, release or assign compromise any material rights liability with respect to Taxes, agree to any adjustment of any Tax attribute, file any claim for a refund of Taxes or claims thereunder consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment; and
(iiixi) dispose of, grant, obtain or permit to lapse change in any material respect its Tax or financial accounting methods (or underlying assumptions), principles or practices affecting its assets, liabilities or business, in each case, in effect on the date hereof, except as required by changes in Canadian generally accepted accounting principles or regulatory accounting principles;
(d) the Company IP;shall not, and shall cause each of its Subsidiaries to not (otherwise than as may be contemplated in Section 4.10):
(i) dischargeexcept in each case as may be required by Law, settleenter into or modify any Employee Benefit Arrangements with, compromiseany officers, assign directors, or satisfy employees of the Company or any material claimSubsidiary or grant any bonuses, whether salary increases, severance or termination pay to, any officers or directors of the Company other than (A) pursuant to agreements in effect (without amendment) on the date hereof; or (B) pursuant to Section 4.8(b)(v), or
(ii) in the case of the employees who are not pending before a Governmental Entityofficers or directors of the Company, (i) outside take any action other than in the ordinary course of business consistent with past practice (none of which actions shall be unreasonable or (iiunusual) relating to or arising from any securities class action claims or related derivative claims, in each case except with respect to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition grant of any material restriction bonuses, salary increases or with respect to any increase of benefits payable otherwise than pursuant to agreements, policies or arrangements in effect (without amendment) on the business or operations of date hereof;
(e) the Company shall use its commercial reasonable efforts to not permit its or its Subsidiaries’ current insurance (or re-insurance) policies to be cancelled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and re-insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect; and
(f) the Company shall not, and shall not permit its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii)to, (iii)agree to take, (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change commitments to take, or adopt any resolutions of its board of directors in any method support of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingactions prohibited by this Section 4.1.
Appears in 1 contract
Samples: Acquisition Agreement (Kronos Inc)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date termination of this Agreement and the Effective TimeClosing Date (the “Pre-Closing Period”):
(a) The Company will conduct its business in the ordinary course in substantially the same manner as heretofore conducted, except as (i) to the extent expressly provided otherwise expressly permitted by in this Agreement or (ii) as set forth consented to by email by Xxxxx Xxxxxx (xxxxxxx@xxxxxxxxxx.xxx) on Section 6.01 behalf of the Company Disclosure Letter, the relevance of which disclosure Parent in response to the appropriate subsection in an email request for such consent to an exception to this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent 4.1(a) (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter Documents);
(b) The Company will (i) adjustpay all of its debts and Taxes when due, split, combine, reclassify except to the extent such debts or make any like change Taxes are being contested in any Company Securities or Company Subsidiary Securitiesgood faith by appropriate proceedings and for which adequate reserves according to GAAP have been established, (ii) repurchasepay or perform its other obligations when due, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, and (iii) declareuse commercially reasonable efforts consistent with past practice to (A) preserve intact its present business organizations, set aside or pay any dividend or distribution (whether in cashB) keep available the services of its present officers and key employees, stockand (C) preserve its relationships with customers, property or otherwise) in respect ofsuppliers, or enter into any Contract distributors, licensors, licensees and others having business dealings with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent)it;
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any The Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise will promptly notify Parent in writing of any change, occurrence or event which, individually or in the aggregate with any other changes, occurrences and events, would reasonably be expected to have a Material Adverse Effect on the Company Equity Award outstanding as or which is reasonably likely to cause any of the date of this Agreement conditions in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;Article 5 not to be satisfied; and
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other Other than increases in compensation made pricing amendments entered into in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were ordinary course renewals for Contracts in existence as of the date of this Agreement, the Company will not enter into a Contract that requires the procurement of any consent or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or waiver of the terms of such Company Employee Plans as in effect on the date hereofcounterparty, or (ii) hire any new employeesprovides for a right of termination or acceleration, except (A) in the ordinary course of business consistent connection with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that as a result of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary consummation of the CompanyTransactions, any Owned Real Estate, any Lease or any Leased Real Estate, except unless consented to by email by Xxxxx Xxxxxx (Axxxxxxx@xxxxxxxxxx.xxx) dispositions on behalf of obsolete, surplus or worn out assets or assets that are no longer useful Parent in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant response to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which an email request for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated consent by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Nerdwallet, Inc.)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from the date of this Agreement until the earlier of (i) the Effective Time and (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except Except as expressly permitted contemplated by this Agreement, as set forth on in Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 6.1 of the Company Disclosure Letter, the relevance of which disclosure for any Exigency Measure (including for any actions taken reasonably and in good faith to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure respond to COVID-19 or cross-reference, or any COVID-19 Measures) as required by applicable Lawlaw, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of or as approved by Parent (which consent shall approval will not be unreasonably withheld, conditioned or delayeddelayed and may be granted by an email or other electronic communication from a Representative of Parent), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier to occur of the termination of this Agreement pursuant to Article VIII and the Effective Time (the “Interim Period”):
(a) amend or propose to amend the Company will, and will cause its or any of its Subsidiaries' Charter Documents;
(b) Subsidiaries to, (i) adjust, split, combine, reclassify or make any like change maintain its existence in any Company Securities or Company Subsidiary Securities, good standing pursuant to applicable law; (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to conduct its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made business and operations in the ordinary course of business consistent in all material respects (it being agreed by the Parties that with past practicerespect to the matters specifically addressed by any provision of Section 6.1(b), or enter into any new or amend in any such specific provisions shall govern over the more general provision of this Section 6.1(a)(ii)); and (iii) use its respective commercially reasonable efforts to (A) preserve intact its material respectassets, any existing employment or consultingproperties, bonusand Contracts; (B) keep available the services of its current officers and key employees (other than where termination of such services is for cause); and (C) preserve the current relationships with customers, severancevendors, retirementdistributors, retentionpartners, change in control or similar agreement lessors, licensors, licensees, creditors, contractors and other Persons with which the Company Group has material business relations; and
(b) the Company will not, and will not permit any of its past Subsidiaries, to:
(i) acquire, sell, lease, license, transfer, assign, encumber, subject to a Lien or present officersdispose of any assets, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any planIntellectual Property (except, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as the case of any of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except foregoing (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries)limited, in any transaction the case of Intellectual Property, to entering into non-exclusive license agreements, agreements for the sale or series license of transactionsCompany Products, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and non-disclosure agreements in the ordinary course of business consistent with past practicebusiness), (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject pursuant to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the CompanyCompany Group, (B) transfers among the Company and its Subsidiaries, or (C) having a value in excess of $500,000 individually or $2,000,000 in the aggregate, (D) pursuant to existing Contracts or otherwise the Credit Agreement and the other Loan Documents (as defined in the Credit Agreement) in accordance with their terms in effect as of the date hereof and (E) capital expenditures permitted by Section 6.1(b)(xv));
(ii) except in the ordinary course of business consistent with past practice or as otherwise permitted pursuant to an exception of the covenants contained in this Section 6.1(b), (which for the avoidance of doubt A) accelerate, terminate or cancel, or waive, release or assign any right, obligation or claim under, any Company Material Contract, (B) amend or modify any Company Material Contract in a manner that is material and without limitation adverse to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory)Company Group, or (iiC) adopt or effect enter into any Contract which, if entered into prior to the date of this Agreement would have been a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationCompany Material Contract;
(giii) acquire by merging or consolidating with or by purchasing a material equity interest in or a material portion of the assets of, or by exclusive license or any other manner, any business, corporation, partnership, association or other business organization or division thereof;
(iv) amend the Charter or Bylaws or the respective organizational documents of any of the Company Subsidiaries;
(v) repurchase, prepay redeem or otherwise reacquire any shares of Company Capital Stock, other equity securities of the Company, other ownership interests or any options, equity or equity-based awards, warrants or rights to acquire any such stock, securities or interests of the Company, other than in connection with (A) transactions involving only wholly owned Company Subsidiaries in the ordinary course, (B) repurchases or reacquisitions shares of Company Common Stock pursuant to the Company’s right to repurchase or reacquire shares of Company Common Stock held by employees or other service providers of the Company Group in connection with termination of such Person’s employment or engagement by the Company and in accordance with the terms in effect as of the date hereof of the applicable Company Benefit Plan, (C) the relinquishment of shares by employees or other service providers of the Company Group in payment of withholding tax upon the settlement of Company RSUs in accordance with the terms in effect as of the date hereof of the applicable Company Benefit Plan, or (D) solely to the extent required under the terms in effect as of the date hereof of the applicable Company Benefit Plan, the cashless or net exercise of Company Options, in each case of clauses (B), (C) and (D), pursuant to the terms of such awards;
(vi) split, combine or reclassify any outstanding shares of Company Capital Stock or capital stock of any Company Subsidiaries;
(vii) issue, sell, dispose of or authorize, propose or agree to the issuance, sale or disposition by the Company or any of its Subsidiaries of, any shares of, or any equity or equity-based awards, options, warrants or rights of any kind to acquire any shares of, or any securities convertible into or exchangeable for any shares of, Company Capital Stock, or any other securities in respect of, in lieu of, or in substitution for any class of its capital stock outstanding as of the Capitalization Date, except (A) for the Company Common Stock issuable upon exercise or conversion of Company Options, Company Warrants or other convertible securities outstanding as of the date hereof or issued or granted without breach of the terms of this Agreement and, in the case of the Company Options, to the extent required under the terms in effect as of the date hereof of the applicable Company Benefit Plan, or (B) for the settlement of Company RSUs outstanding as of the date hereof to the extent required under the terms in effect as of the date hereof of the applicable Company Benefit Plan;
(viii) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue except for (A) short-term debt incurred to fund operations of the business in the ordinary course of business; (B) for loans or sell advances between members of the Company Group; or (C) pursuant to the Credit Agreement up to the amount permitted to be incurred as of the date hereof pursuant thereto;
(ix) make any debt securities loans or optionsadvances, warrantsexcept (A) to or for the benefit of a member of the Company Group, calls (B) for those not in excess of $250,000 in the aggregate, (C) for advances for reimbursable employee or contractor expenses in the ordinary course of business, or (D) extensions of credit to customers in the ordinary course of business;
(x) except to the extent required by the terms of a Company Benefit Plan as in effect on the date hereof: (A) grant or increase any severance termination pay, retention bonus, transaction bonus, change in control bonus, or phantom equity or incentives to any employee or other rights to acquire any debt securities individual service provider of the Company Group, (B) increase the compensation, bonus or other benefits of current or former directors, employees or other individual service providers of the Company or any of its SubsidiariesCompany Subsidiary, guarantee (C) adopt or establish any debt securities of another Person, enter into any “keep well” new Company Benefit Plan or other Contract to maintain any financial statement condition of any other Person benefit or enter into compensation plan, policy, program, contract, agreement or arrangement that would be a Company Benefit Plan if it were in existence on the date hereof, or amend, modify or terminate in any arrangement having material respect any existing Company Benefit Plan, or (D) hire (except pursuant to offer letters that have been issued and issued prior to the economic effect date of this Agreement and accepted and fully executed prior to the date of this Agreement) or terminate the employment (other than for cause) of (I) any employee of the foregoingCompany or any Company Subsidiary with a title of vice president or higher or (II) any employees of the Company or any Company Subsidiary with a title below the vice president level, other than, solely in each caserespect of this clause (II), borrowings and repayments under the Company's existing revolving credit facility (a) terminations of such employees that are in the ordinary course of business consistent with past practice that do not trigger any liabilities in excess of amounts owed under applicable law, or (b) new hires (x) to fill vacant roles or (y) in the ordinary course consistent with past practice, or take in each case, in a manner that is consistent with the budget provided to Buyer and provided that any action (other compensation provided to such new hires shall be no greater than the entry into this Agreement and compensation provided to similarly situated employees, but shall exclude any change in control, transaction or sale bonuses, severance benefits or equity or equity-based awards (or promises to grant any of the following);
(xi) execute or amend any collective bargaining agreement or other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change obligation to any term of, labor organization incurred or material default under, any material indebtedness of entered into by the Company or any of its the Company’s Subsidiaries;
(hxii) other than as required by GAAP, change its accounting methods, principles or practices (including its Tax accounting methods, principles or policies);
(xiii) (iA) enter into amend any new line income or other material Tax Return, (B) make, change or revoke any material Tax election, (C) settle or compromise any material Tax claim or assessment by any Governmental Authority, except to the extent that any such settlement or compromise does not exceed the amount of business any Tax reserves that have been established therefor in the Company SEC Reports, (D) surrender any right to claim a material Tax refund, or make (E) consent to any extension or agree waiver of the statute of limitations period applicable to make any new capital expenditure material Tax claim or assessment;
(xiv) settle, compromise or otherwise resolve any Legal Proceedings other than the compromise or settlement of Legal Proceedings: that (x) (A) are for solely for monetary damages in excess of an amount for each such compromise or settlement that is, individually, less than $250,000 and for all such compromises or thatsettlements that is, in the aggregate, are in excess of less than $500,0001,000,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or and (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate does not impose any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction injunctive relief on the business or operations of the Company or any of its the Company Subsidiaries or Affiliates or a material increase in (other than customary non-monetary restrictions that are immaterial and ancillary to the monetary relief granted) and does not involve the admission of wrongdoing by the Company's insurance premiums, any Company Subsidiary or any of their respective officers or directors;
(jxv) enter into make or commit to make any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a)capital expenditures other than consistent with the capital expense budget made available to Parent;
(kxvi) make merge or consolidate with any material change in any method other Person or propose or adopt a plan of financial accounting principles complete or practicespartial liquidation, in each case except for any such change required by a change in GAAP dissolution, merger, consolidation, restructuring, recapitalization or applicable Lawother reorganization;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(nxvii) enter into into, authorize any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) of, or agree or commit in writing to do enter into a Contract to take any of the foregoingactions prohibited by this Section 6.1(b).
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement and the Closing, the Selling Shareholders shall cause the Company (i) except to the Effective Time and (ii) the first date on which extent that Parent shall have exercised rights under Section 1.03 otherwise consent in writing) to designate carry on its business in the usual, regular and ordinary course in substantially the same manner as heretofore conducted, to pay its debts in substantially the same manner as heretofore conducted and Taxes when due, to pay or perform other obligations when due, and, to the extent consistent with such business, to use all reasonable efforts consistent with past practice and policies to preserve intact its present business organization, keep available the services of its present officers and key employees and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, all with the goal of preserving unimpaired its goodwill and ongoing businesses at least a majority and after the Closing. The Selling Shareholders shall cause the Company, to promptly notify Parent of any event or occurrence or emergency not in the ordinary course of its business, and any material event involving or adversely affecting the Company or its business. Except as expressly contemplated by this Agreement the Selling Shareholders shall cause the Company, not to take any of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with following actions without the prior written consent of Parent (Parent, such consent not to be unreasonably withheld, conditioned withheld or delayed:
(i) enter into any commitment, activity or transaction not in the ordinary course of business;
(ii) transfer to any person or entity any rights to any Intellectual Property;
(iii) enter into or amend any agreements pursuant to which any other party is granted manufacturing, marketing, distribution or similar rights of any type or scope with respect to any products of the Company, except in the ordinary course of business;
(iv) amend or otherwise modify (or agree to do so), conduct its business in all material respects except in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each or violate the terms of, any of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, agreements set forth or described in the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or any of its Subsidiaries' Charter DocumentsSchedules;
(bv) commence any litigation;
(i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iiivi) declare, set aside or pay any dividend dividends on or distribution make any other distributions (whether in cash, stockstock or property) in respect of any of the shares in its share capital, property or otherwise) split, combine or reclassify any of the shares in its share capital or issue or authorize the issuance of any other securities in respect of, in lieu of or enter into in substitution for shares in the share capital of the Company, or repurchase, redeem or otherwise acquire, directly or indirectly, any Contract with respect to shares in the voting share capital of the Company (or options, warrants or other rights exercisable therefor), except for the Recapitalization Dividend;
(vii) issue, grant, deliver or sell or authorize or propose the issuance, grant, delivery or sale of, or purchase or propose the purchase of, any Company Securities shares of its share capital or Company Subsidiary Securities (securities convertible into, or subscriptions, rights, warrants or options to acquire, or other than dividends from a direct agreements or indirect wholly owned Subsidiary commitments of the Company any character obligating it to its parent)issue any such shares or other convertible securities, except for assurance of Shares pursuant to Immediately Exercisable Options;
(cviii) issuecause or permit to be made any amendments to its articles of incorporation or bylaws, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notesamended;
(dix) (i) except as required acquire or agree to acquire by applicable Law merging or required consolidating with, or permitted by purchasing any assets or equity securities of, or by any Company Employee Plan other manner, any business or written Contract existing prior any company, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the date business of this Agreement that has been disclosed the Company;
(x) sell, lease, license or made available to Parent, increase the compensation payable or that could become payable by the Company or otherwise dispose of any of its Subsidiaries to directors properties or officersassets, other than increases in compensation made except in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(fxi) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, or issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Personothers other than fluctuations under existing loan facilities, enter into excluding amounts loaned to the Company by Parent;
(xii) grant any “keep well” severance, change of control award or other Contract termination pay to maintain any financial statement condition of director, officer employee or consultant;
(xiii) adopt or amend any other Person employee benefit plan, program, policy or arrangement, or enter into any arrangement having employment contract, extend any employment offer, pay or agree to pay any special bonus or special remuneration to any director, employee or consultant, or increase the economic effect salaries or wage rates of its employees, except in the ordinary course of business;
(xiv) revalue any of its assets, including without limitation writing down the foregoingvalue of inventory or writing off notes or accounts receivable, other thanthan in the ordinary course of business and consistent with past practice;
(xv) excluding payroll obligations performed in the ordinary course, pay, discharge or satisfy, in each casean amount in excess of CDN $50,000, borrowings and repayments under any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the Company's existing revolving credit facility payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the Financial Statements or incurred in the ordinary course of business consistent with past practicepractice after March 31, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries2000;
(hxvi) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign change any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course election in respect of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax electionTaxes, adopt or change any accounting method in respect of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refundTaxes, enter into a settlement or compromise, settle any material agreement relating to federal, state, local claim or other assessment in respect of Taxes, file or consent to any amended federal Tax Return extension or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices waiver of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves limitation period applicable to that claimany claim or assessment in respect of Taxes;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(nxvii) enter into any Store Leases strategic alliance, joint development or joint marketing arrangement or agreement;
(xviii) fail to pay or otherwise satisfy its monetary obligations as they become due, except such as are being contested in good faith;
(xix) waive or commit to waive any rights with a value in excess of CDN $25,000, in any one case, or CDN $50,000, in the aggregate;
(xx) cancel, materially amend or renew any insurance policy other than in the ordinary course of business;
(xxi) alter, or enter into any commitment to alter, its interest in any corporation, association, joint venture, partnership or business consistent entity in all material respects with past practicewhich the Company directly or indirectly holds any interest on the date hereof; or
(oxxii) agree in writing or commit otherwise to do take, any of the foregoingactions described in Sections 3.1(i) through (xxi) above, or do any other action that would prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during the period from From the date of this Agreement until the earlier of the termination of this Agreement and the Effective Time, except (i) the Effective Time and as prohibited or required by Applicable Law, (ii) the first date on which Parent shall have exercised rights under as set forth in Section 1.03 to designate at least a majority 5.01 of the BoardCompany Disclosure Letter, except (iii) as otherwise required or expressly permitted contemplated by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written (iv) if Parent shall otherwise consent of Parent (which consent shall not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in or (v) for any actions required to be taken pursuant to the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each terms of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) andLife Sciences SAPA (including, without limitation, the Restructuring Transactions or pursuant to the extent consistent therewithTransition Services Agreement) or otherwise solely related to the Life Sciences Assets or the Life Sciences Liabilities, the Company shall, and shall cause each of its Subsidiaries to, (A) conduct its business in the ordinary course of business consistent with past practice and in compliance in all material respects with all Applicable Laws and the requirements of all Material Contracts, (B) use its reasonable best efforts to maintain and preserve intact its business organization and business relationships (including with its Subsidiaries' business organizationsuppliers, to customers and Governmental Entities) and keep available the services of its and its Subsidiaries' current officers and employees, (C) use its reasonable best efforts to preserve keep in effect all material insurance policies in coverage amounts substantially similar to those in effect on the date of this Agreement, and (D) use its reasonable best efforts to promptly notify Parent of (1) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement, and its Subsidiaries' present relationships and goodwill with customers(2) any Action commenced or threatened in writing, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it relating to or involving or otherwise affecting the Company or any of its Subsidiaries (it being agreed and understood that relates to the consummation of the transactions contemplated by this Agreement; provided, however, that no action by the Company or its Subsidiaries failure to take action with respect to matters specifically addressed by any other provision of this Section 6.01 the provisions of the next sentence shall be deemed to be constitute a breach of the foregoing under this sentence unless such action or failure to take action would constitute a breach of such other provision of this Agreement)the next sentence. Without In addition, and without limiting the generality of the foregoingforegoing and to the fullest extent permitted by Applicable Law, between from the date of this Agreement until the earlier of termination of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or (i) as set forth on in Section 6.01 5.01 of the Company Disclosure Letter, the relevance of which disclosure (ii) for any actions required to be taken pursuant to the appropriate subsection in this Section 6.01 is reasonably apparent on its face terms of the Life Sciences SAPA (including, without limitation, the necessity of repetitive disclosure Restructuring Transactions or cross-referencepursuant to the Transition Services Agreement) or otherwise solely related to the Life Sciences Assets or any Life Sciences Liabilities (except as specifically provided for below), or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the (iii) with Parent’s prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend or propose to amend its or ), the Company shall not, and shall not permit any of its Subsidiaries' Charter Documents;Subsidiaries to, do any of the following:
(b) (i) adjust, split, combine, reclassify amend the Company Charter or make any like change the Company By-laws or amend in any Company Securities material respect (or Company in any respect adversely impacting Parent or Merger Sub) the comparable organizational documents of any Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than of the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect ofCompany, or enter into any Contract written agreement with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent)Company’s stockholders in their capacity as such;
(cii) (A) issue, deliver, sell, pledgeencumber or grant any shares of its capital stock or other equity or voting interests, dispose ofor any securities or rights convertible into, transferexchangeable or exercisable for, modify or encumber evidencing the right to subscribe for any shares of its capital stock or other equity or voting interests, or any rights, warrants or options to purchase any shares of its capital stock or other equity or voting interests, except for any issuance, sale or grant (1) solely between or among the Company Securities and its wholly owned Non-Life Sciences Subsidiaries or (2) required pursuant to the exercise or settlement of Company Stock Options, Company Restricted Stock Awards or Company Subsidiary SecuritiesRestricted Stock Unit Awards identified in Section 3.03(a) as outstanding on the Capitalization Date in accordance with the terms of the applicable Company Stock Plan in effect on the Capitalization Date or granted after the date hereof to the extent expressly permitted by this Agreement, other than (iB) the issuance redeem, purchase or otherwise acquire any of its outstanding shares of Company Common Stock upon the exercise capital stock or other equity or voting interests, or any rights, warrants or options to acquire any shares of any Company Equity Award outstanding its capital stock or other equity or voting interests, except (x) pursuant to written commitments in effect as of the date hereof with former directors or employees in connection with the termination of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior services to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries Subsidiaries, copies of which have been filed as exhibits to directors the Company SEC Documents or officers(y) in connection with the satisfaction of Tax withholding obligations with respect to Company Stock Options, Company Restricted Stock Awards or Company Restricted Stock Unit Awards, acquisitions by the Company in connection with the forfeiture of such equity awards, or acquisitions by the Company in connection with the net exercise of such Company Stock Options, or (C) split, combine, subdivide or reclassify any shares of its capital stock or other equity or voting interests;
(iii) (A) in the case of the Company, establish a record date for, declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock, Company Securities or other equity or voting interests and (B) in the case of any Subsidiary of the Company, establish a record date for, declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock, Company Securities or other equity or voting interests, other than increases than, in compensation made each case with respect to any dividend or distribution solely to the Company or any wholly owned domestic Non-Life Sciences Subsidiaries or solely to the extent provided for in the Restructuring Transactions;
(iv) (A) incur any Indebtedness or issue or sell any debt securities or rights to acquire debt securities, except for (1) Indebtedness solely between or among the Company and any of its wholly owned Non-Life Sciences Subsidiaries, (2) letters of credit issued in the ordinary course of business consistent with past practices, and (3) trade credit or trade payables in all material respects the ordinary course of business consistent with past practice, or enter into (B) make any new loans, capital contributions or amend in advances to any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as person outside of the date ordinary course of this Agreement, or make any contribution to any Company Employee Planbusiness consistent with past practice, other than amendments to the Company or any wholly owned Non-Life Sciences Subsidiary of the Company;
(v) acquire, sell, lease (as lessor), license, mortgage, sell and contributions required by Law leaseback or the terms of such Company Employee Plans as in effect on the date hereofotherwise subject to any Lien (other than Permitted Liens), or (ii) hire otherwise dispose of any new employeesReal Property or other material properties or assets, except including Intellectual Property, or any material interests therein or waive or relinquish, abandon or allow to lapse any Real Property or other material properties or assets, including Intellectual Property, other than (A) in the ordinary course of business consistent with past practice with respect to employees with for fair market value in an annual base salary amount not to exceed $150,0005,000,000 in the aggregate, (B) pursuant to Contracts in existence on the date of this Agreement and set forth on Section 3.12 of the Company Disclosure Letter, or (BC) with respect to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
transactions (ex) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than where the Company is the acquiring or disposing party, among the Company and one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and wholly owned Non-Life Sciences Subsidiaries in the ordinary course of business consistent with past practicepractice or (y) where a wholly owned Non-Life Sciences Subsidiary is the acquiring or disposing party, among the Company and one or more of the wholly owned Non-Life Sciences Subsidiaries or among the wholly owned Non-Life Sciences Subsidiaries;
(vi) make or authorize capital expenditures in any calendar year that, individually or in the aggregate, exceed the amounts budgeted in the Company’s current plan, which amounts are set forth in Section 5.01(a)(vi) of the Company Disclosure Letter, by more than 10%;
(vii) make any change in financial accounting methods, principles or practices, or elections, except insofar as may be required by a change in GAAP or Applicable Law occurring after the date of this Agreement;
(viii) assign, transfer, lease, cancel, fail to renew or fail to extend any Real Property Lease or Permit;
(ix) (A) commence any Action, except with respect to (1) routine matters in the ordinary course of business and consistent with past practices or (2) in such cases where the Company reasonably determines in good faith that the failure to commence such Action would result in a material impairment of a valuable aspect of the Business (provided that the Company consults with Parent and considers the views and comments of Parent with respect to such Actions prior to the commencement thereof) or (B) employee loans settle or advances for travelcompromise, businessor propose to settle or compromise, relocation any claim or Action involving or against the Company or any of its Subsidiaries, other than, subject to Section 6.10, settlements or compromises involving only monetary payment by the Company or any of its Subsidiaries in an amount not to exceed $5,000,000 individually or $10,000,000 in the aggregate;
(x) abandon, encumber, convey title (in whole or in part), exclusively license or grant any material exclusive right or other reimbursable expenses made material exclusive licenses to material Intellectual Property owned by or exclusively licensed to the Company or any of its Subsidiaries, or enter into licenses or agreements that impose material restrictions upon the Company or any of its Affiliates with respect to material Intellectual Property owned by any third party and impair the operation of the business of the Company or any of its Affiliates, in each case, other than in the ordinary course of business consistent with past practice;
(fxi) except for amendments, terminations or non-renewals in the ordinary course of business consistent with past practice, amend, waive any provision of, fail to enforce (in each case, in any material respect), assign or terminate any Material Contract or enter into a Contract that would reasonably be likely to (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of adversely affect the Company, Parent or the Surviving Company in any Owned Real Estatematerial respect, any Lease (ii) limit or restrict the Surviving Company or any Leased Real Estateof its Affiliates from engaging or competing in any line of business or in any geographical area, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise other than exclusive sales agreements entered into in the ordinary course of business consistent with past practice or (which for the avoidance of doubt and without limitation iii) be a Material Contract if entered into prior to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganizationdate hereof;
(gxii) repurchaseexcept as required by Applicable Law, prepay pursuant to the terms of any Company Benefit Plan in effect on the date hereof, (i) increase the compensation of, hire or incur terminate any indebtedness for borrowed money or guarantee any such indebtedness of another Persondirector, issue or sell any debt securities or options, warrants, calls executive officer or other rights to acquire any debt securities employee or independent contractor with annual compensation in excess of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing$100,000, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility than in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modifyestablish, amend or terminate any Company Material Contract Benefit Plan (or waiveany plan, release program, arrangement or assign agreement that would be a Company Benefit Plan if it were in existence on the date hereof) or Collective Bargaining Agreement or increase the benefits provided under any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IPBenefit Plan;
(ixiii) dischargeforgive any loans to any employees, settleofficers or directors of the Company, compromiseor any of their respective Affiliates;
(xiv) acquire (whether pursuant to merger, assign stock or satisfy asset purchase or otherwise) in one transaction or any material claimseries of related transactions any equity interests in any Person or any business or division of any Person or all or substantially all of the assets of any Person (or any business or division thereof), whether form any Subsidiary or not pending before enter into any joint venture, partnership, limited liability corporation or similar arrangement;
(xv) adopt a Governmental Entityplan of complete or partial liquidation, dissolution, merger or conversion or resolution providing for or authorizing such a liquidation, dissolution, merger or conversion;
(i1) outside except as in the ordinary course of business consistent with past practice business: (A) make or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of change any material restriction on Tax election of the business Company or operations its Subsidiaries; (B) settle or compromise any material Tax liability of the Company or any of its Subsidiaries or Affiliates settle or compromise any Tax liability that could have a material increase effect on the Company or its Subsidiaries in the Company's insurance premiums;
future taxable years; (j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(kC) make any material change in any method of financial accounting principles or practices, in each case except for Tax accounting; (D) file any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local amendment to an income or other material Tax election, adopt Return; or change any method of tax accounting other than as described on Section 4.06(f(E) of the Company Disclosure Letter, waive or extend or waive the application of any statute of limitations regarding the assessment or collection in respect of any federal Tax material Taxes except as required by Applicable Law; or (2) fail to promptly notify Parent of any material stateaudit, local examination, investigation, written claim or other Taxproceeding by any Governmental Entity relating to Taxes that arises prior to the Effective Time;
(xvii) repatriate any cash, settle cash equivalents or compromise any federal other assets to the extent that such repatriation would result in a Tax liability to the Company or refundany of its Subsidiaries except, settle or compromise any in connection with the repayment of outstanding indebtedness of an amount not in excess of $60,000,000, for withholding taxes in local jurisdictions that are not material statein relation to the value of the cash, local cash equivalents or other Tax liability assets repatriated;
(xviii) amend, modify or refund, enter into waive any material agreement relating to federal, state, local provisions of the Life Sciences SAPA or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund the Transition Services Agreement (or otherwise make a material change in alter the Tax compliance practices terms of any services or consideration to be paid therefor under the Transition Services Agreement) that would adversely impact the Parent, the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of or the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claimSurviving Company in any respect;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(nxix) enter into any Store Leases other than license or sublease with the Life Sciences Buyer of the real property leased by ATMI PACKAGING pursuant to the Lease, dated October 21, 2004, by and between Xxxx-Xxxxx Industrial, LLC and ATMI PACKAGING, as amended from time to time (the “MN Facility”) on terms that are inconsistent with the terms specified in the ordinary course Transition Services Agreement in any material respect and that would not reasonably be expected to materially impair the use of business consistent in all material respects with past practicethe MN Facility by the Company and its Subsidiaries; or
(oxx) agree agree, commit or commit propose to do take any of the foregoingforegoing actions.
Appears in 1 contract
Samples: Merger Agreement (Entegris Inc)
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of (ia) the Effective Time termination of this Agreement and (iib) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the BoardClosing, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter agrees (unless the Company is otherwise required to take such action pursuant to this Agreement or as required by applicable Law or with the SafeNet shall otherwise give its prior written consent of Parent (not in writing) to be unreasonably withheld, conditioned or delayed), conduct carry on its business in all material respects substantially in the usual, regular and ordinary course of business, substantially consistent with past practice (including practice, to pay its Liabilities and Taxes consistent with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately ’s past practices, to account pay or perform other obligations when due consistent with the Company’s past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith and for any planned store closures) which adequate reserves have been established), and, to the extent consistent therewithwith such business, the Company shall, and shall cause each of its Subsidiaries to, to use commercially reasonable best efforts to maintain and preserve substantially intact its and its Subsidiaries' present business organization, to keep available the services of its and its Subsidiaries' current present officers and employees, to key employees and preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees licensees, independent contractors and other Persons persons having material business relationships dealings with it or it, all with the express purpose and intent of preserving substantially unimpaired its Subsidiaries (it being agreed goodwill and understood that no action ongoing businesses at and after the Closing. Except as expressly contemplated by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent (which consent shall not be unreasonably withheldSafeNet, conditioned take or delayed):
(a) amend agree in writing or propose otherwise to amend its take, any action that would result in the occurrence of any of the changes described in Section 3.21 or any other action that would make any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify representations or make any like change warranties contained in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, untrue or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or incorrect when made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect. Neither the Company nor any Major Shareholder shall, without the prior written consent of SafeNet, take or agree in writing or otherwise to take, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreementintended to, or make any contribution to any Company Employee Planthat would, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than prevent the Company or one such Major Shareholder from performing (or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of cause the Company or such Major Shareholder not to perform) its agreements and covenants hereunder or intended to, or that would, cause any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” condition to SafeNet’s closing obligations in Section 7.1 or other Contract Section 7.3 not to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of be satisfied. Notwithstanding the foregoing, other thanthe Company may use any and all of its available cash to pay its liabilities, in each caseincluding any Company Expenses, borrowings and repayments under the Company's existing revolving credit facility provided that such liabilities are reflected in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendment, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire or materially alter any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingEstimated Closing Balance Sheet.
Appears in 1 contract
Conduct of Business of the Company. The Company shallExcept as contemplated by this Agreement (including without limitation the last sentence of this Section 6.1), from and shall cause each of its Subsidiaries to, during the period from after the date of this Agreement hereof until the earlier of (i) the Effective Time and (ii) Closing Date or the first date on which termination of this Agreement in accordance with its terms, Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Boardshall, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter Schedule 6.1 or as required consented to in writing by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct its business in all material respects in the ordinary course of business, consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately to account for any planned store closures) and, to the extent consistent therewith, the Company shall, and shall cause each of its Subsidiaries to, use reasonable best efforts to maintain and preserve intact its and its Subsidiaries' business organization, to keep available the services of its and its Subsidiaries' current officers and employees, to preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees and other Persons having material business relationships with it or its Subsidiaries (it being agreed and understood that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent Buyer (which consent shall not be unreasonably withheld, conditioned or delayed):), (i)
(a) amend or propose cause the Company to amend conduct its or any of its Subsidiaries' Charter Documents;
business in the ordinary and regular course in materially the same manner heretofore conducted and (b) (i) adjust, split, combine, reclassify or make any like change in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem or otherwise acquire, or offer use commercially reasonable efforts to repurchase, redeem or otherwise acquire, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of cause the Company to preserve substantially intact its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior business organization and to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made in the ordinary course of business consistent preserve in all material respects the present commercial relationships with past practicekey Persons with whom it does business (provided, however, that, with respect to Material Relationships, and without limiting the other obligations contained in this Section 6.1, Parent shall cause the Company to use commercially reasonable efforts to preserve in all material respects the present commercial relationship with such Material Relationship, and enforce the terms of any material Contract between the Company and any such Material Relationship, provided further, however, that this parenthetical shall not require the Company to commence or enter into sustain legal proceedings) and (ii) not permit the Company to do any new of the following:
(a) terminate, amend or amend modify in any material respect, respect any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee PlanMaterial Contract, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice practices; Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with respect to employees with an annual base salary not to exceed $150,000the Securities and Exchange Commission.
(b) declare, set aside or pay a dividend on, or make any other distribution in respect of, its equity securities except dividends or distributions made or paid in Cash and Cash Equivalents;
(Bc) (i) issue, sell, transfer, pledge, grant, dispose of, encumber or deliver any equity securities of any class or any securities convertible into or exercisable or exchangeable for voting or equity securities of any class or (ii) adjust, split, combine or reclassify any of its equity securities;
(d) acquire or agree to replace existing employees whose employment has terminatedacquire in any manner any business or any corporation, at compensation levels and partnership, association or other business organization or division thereof of any other Person (including without limitation, by merger or consolidation with benefits consistent in all material respects with that or into, the purchase of more than 50% of the employee replacedequity interests in, or the purchase of all or substantially all of the assets of, any such Person);
(e) acquireadopt any amendments to its Governing Documents;
(f) incur, by mergerassume or guarantee any Indebtedness, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans borrowings expressly permitted to be incurred hereunder, and (C) other borrowings in an aggregate amount not to exceed $50,000;
(g) merge or advances for travelconsolidate with or into any other Person or dissolve or liquidate;
(h) except as required by the terms of any Company Benefit Plan, businessParent Benefit Plan or Material Contract as in effect on the date hereof, relocation and except as provided in the following sentence, (i) grant or announce any new incentive awards, bonus or similar compensation or any increase in the salaries or bonuses payable by the Company to any of the employees of the Company; provided that the Company shall be permitted to increase the salaries of its employees and pay bonuses to its employees, in each case in the ordinary course of business consistent with past practices, (ii) materially increase the benefits under any Company Benefit Plan, (iii) otherwise enter into any transaction with any of its officers, employees or Affiliates (or any directors, managers, officers or employees of any such Affiliate), including any employment, severance, retention or other reimbursable expenses made similar agreement, other than employment arrangements entered into in the ordinary course of business consistent with past practices, or (iv) terminate any retention bonus agreement listed on Schedule 6.9 with respect to any Company employee who continues in employment through the Closing Date. Notwithstanding anything to the contrary contained in this subclause (h) or elsewhere in this Agreement, the Company shall be permitted to complete its annual merit increase and bonus process in the ordinary course of business consistent with past practice;
(f) (i) transfer; and make hiring, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company promotion and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt salary decisions based on job description and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect of any of the foregoing, other than, in each case, borrowings and repayments under the Company's existing revolving credit facility reasonable market analysis in the ordinary course of business consistent with past practice.
(i) mortgage, pledge or take subject to any action (Lien, other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result in any material amendmentPermitted Liens, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiariesproperties or assets that are material to the business of the Company;
(hj) (i) enter into sell or otherwise dispose of any new line of business material assets owned or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated used by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in Company outside the ordinary course of business consistent business;
(k) pay, discharge, settle or satisfy any liabilities in connection with past practiceany suit, action or proceeding or settlement thereof where the amounts paid or payable by the Company exceed $[***] individually or $[***] in the aggregate;
(iil) except in the ordinary course of business consistent with past practicepractices, modify, amend commence or terminate settle any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether action or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claimsproceeding, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment involving an amount in excess of $[***] individually or satisfaction of such claim would not result $[***] in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement of a pending Tax claim for no more than 110% of the amount, as of the date aggregate; Confidential Portions of this Agreement, of Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the FIN 48 reserves applicable to that claim;Securities and Exchange Commission.
(m) acquire except as required by GAAP or materially alter by applicable Law, change any Owned Real Estate of the accounting methods, principles or practices used by the Company or write up, write down or write off the book value of any Ground Leased Real Estatematerial asset;
(n) enter into any Store Leases other than make capital expenditures in the ordinary course excess of business consistent an aggregate annual amount of $1,400,000 in all material respects with past practicefiscal year 2015 and $1,200,000 in fiscal year 2016; or
(o) agree authorize, permit, or commit or agree to do take any of the foregoingactions set forth in the foregoing clauses (a) through (n), except as otherwise contemplated by this Agreement. Without limiting the forgoing, nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct the Company's operations prior to the Closing.
Appears in 1 contract
Conduct of Business of the Company. The Company shall, and shall cause each of its Subsidiaries to, during During the period from the date of this Agreement and continuing until the earlier of (a) the termination of this Agreement and (b) the Closing, the Company agrees (unless the Company is otherwise required to take such action pursuant to this Agreement or Purchaser shall otherwise give its prior consent in writing, which consent shall not be unreasonably withheld or delayed)
(i) to carry on its business substantially in the Effective Time usual, regular and ordinary course substantially consistent with past practice, (ii) the first date on which Parent shall have exercised rights under Section 1.03 to designate at least a majority of the Board, except as expressly permitted by this Agreement, as set forth on Section 6.01 to the Company Disclosure Letter or as required by applicable Law or with the prior written consent of Parent (not to be unreasonably withheld, conditioned or delayed), conduct pay its business in all material respects in the ordinary course of business, Liabilities and Taxes consistent with past practice (including with respect to future purchase commitments for each of the Company's brands; provided that such future purchase commitments will be reduced appropriately past practices, to account pay or perform other obligations when due consistent with the Company's past practices (other than Liabilities, Taxes and other obligations, if any, contested in good faith and for which adequate reserves have been established), (iii) maintain in full force and effect all Permits used in the conduct of its business as presently conducted and otherwise conduct all activities related to its Assets and Properties and business in accordance with, and perform in all obligations and duties imposed by all Laws or Orders of any planned store closuresGovernmental or Regulatory Authority, including without limitation by timely filing all required reports or other submissions, and (iv) and, to the extent consistent therewithwith such business, the Company shall, and shall cause each of its Subsidiaries to, to use commercially reasonable best efforts to maintain and preserve substantially intact its and its Subsidiaries' present business organization, to keep available the services of its and its Subsidiaries' current present officers and employees, to key employees and preserve its and its Subsidiaries' present relationships and goodwill with customers, suppliers, lessors, distributors, licensors, licensees licensees, independent contractors and other Persons having material business relationships dealings with it or it, all with the express purpose and intent of preserving substantially unimpaired its Subsidiaries (it being agreed goodwill and understood that no action ongoing businesses at and after the Closing. Except as expressly contemplated by the Company or its Subsidiaries with respect to matters specifically addressed by any other provision of this Section 6.01 shall be deemed to be a breach of the foregoing unless such action would constitute a breach of such other provision of this Agreement). Without limiting the generality of the foregoing, between the date of this Agreement and the Effective Time, except as otherwise expressly permitted by this Agreement or as set forth on Section 6.01 of the Company Disclosure Letter, the relevance of which disclosure to the appropriate subsection in this Section 6.01 is reasonably apparent on its face without the necessity of repetitive disclosure or cross-reference, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend ), take or propose to amend its or any of its Subsidiaries' Charter Documents;
(b) (i) adjust, split, combine, reclassify or make any like change agree in any Company Securities or Company Subsidiary Securities, (ii) repurchase, redeem writing or otherwise acquire, or offer to repurchase, redeem or otherwise acquiretake, any Company Securities (other than the Convertible Notes as contemplated by the terms thereof) or Company Subsidiary Securities, (iii) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any Company Securities or Company Subsidiary Securities (other than dividends from a direct or indirect wholly owned Subsidiary of the Company to its parent);
(c) issue, deliver, sell, pledge, dispose of, transfer, modify or encumber any Company Securities or Company Subsidiary Securities, other than (i) the issuance of shares of Company Common Stock upon the exercise of any Company Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the issuance of shares of Company Common Stock in respect of other equity compensation awards outstanding under Company Stock Plans as of the date of this Agreement in accordance with their terms, (iii) the issuance of shares of Company Common Stock upon exercise of any Warrant action that is outstanding as of the date of this Agreement, or (iv) the issuance of shares of Company Common Stock upon the conversion of Convertible Notes;
(d) (i) except as required by applicable Law or required or permitted by any Company Employee Plan or written Contract existing prior to the date of this Agreement that has been disclosed or made available to Parent, increase the compensation payable or that could become payable by the Company or any of its Subsidiaries to directors or officers, other than increases in compensation made would result in the ordinary course of business consistent in all material respects with past practice, or enter into any new or amend in any material respect, any existing employment or consulting, bonus, severance, retirement, retention, change in control or similar agreement with any of its past or present officers, directors or consultants or establish, adopt, enter into, amend, terminate or take any action to accelerate any material rights under any Company Employee Plans or collective bargaining agreement or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement, or make any contribution to any Company Employee Plan, other than amendments and contributions required by Law or the terms of such Company Employee Plans as in effect on the date hereof, or (ii) hire any new employees, except (A) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $150,000, or (B) to replace existing employees whose employment has terminated, at compensation levels and with benefits consistent in all material respects with that of the employee replaced;
(e) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, or invest in, any business or Person or division thereof or make any loans, advances or capital contributions to or investments in any Person (other than the Company or one or more of its Subsidiaries), in any transaction or series of transactions, in excess of $250,000 in the aggregate, except (A) pursuant to existing Contracts that have been disclosed or made available to Parent and in the ordinary course of business consistent with past practice, (B) employee loans or advances for travel, business, relocation or other reimbursable expenses made in the ordinary course of business consistent with past practice;
(f) (i) transfer, license, sell, lease, sublease, subject to any Lien (other than Permitted Liens) or otherwise dispose of any assets or properties (whether by way of merger, consolidation, sale of stock or assets, or otherwise), including the capital stock or other equity interests in any Subsidiary of the Company, any Owned Real Estate, any Lease or any Leased Real Estate, except (A) dispositions of obsolete, surplus or worn out assets or assets that are no longer useful in the conduct of the business of the Company, (B) transfers among the Company and its Subsidiaries, or (C) pursuant to existing Contracts or otherwise in the ordinary course of business consistent with past practice (which for the avoidance of doubt and without limitation to the foregoing shall be deemed to include the sale or other disposition, including at discounted prices, of supplies and inventory), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) repurchase, prepay or incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any “keep well” or other Contract to maintain any financial statement condition of any other Person or enter into any arrangement having the economic effect occurrence of any of the foregoing, changes described in Section 2.9 or any other than, action that would make any of its representations or warranties contained in each case, borrowings and repayments under the Company's existing revolving credit facility in the ordinary course of business consistent with past practice, or take any action (other than the entry into this Agreement and the other Company Transaction Documents) that would reasonably be expected to result untrue or incorrect when made in any material amendmentrespect (or, modification or adverse change to any term of, or material default under, any material indebtedness of the Company or any of its Subsidiaries;
(h) (i) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than (A) as contemplated by the Company's capital expenditure budget, which has been provided or made available to Parent, or (B) in the ordinary course of business consistent with past practice, (ii) except in the ordinary course of business consistent with past practice, modify, amend or terminate any Company Material Contract or waive, release or assign any material rights or claims thereunder or (iii) dispose of, grant, obtain or permit to lapse any material Company IP;
(i) discharge, settle, compromise, assign or satisfy any material claim, whether or not pending before a Governmental Entity, (i) outside the ordinary course of business consistent with past practice or (ii) relating to or arising from any securities class action claims or related derivative claims, in each case except to the extent such claim is fully covered by the Company's insurance policies (other than any applicable deductible), but only if the discharge, settlement, compromise, assignment or satisfaction of such claim would not result in the imposition of any material restriction on the business or operations of the Company or any of its Subsidiaries or Affiliates or a material increase in the Company's insurance premiums;
(j) enter into any Contract of a type referenced in clause (ii), (iii), (iv), (v) or (viii) of Section 4.13(a);
(k) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(l) make, revoke or amend any federal Tax election or material state, local or other Tax election, adopt or change any method of tax accounting other than as described on Section 4.06(f) of the Company Disclosure Letter, extend or waive the application of any statute of limitations regarding the assessment or collection of any federal Tax or material state, local or other Tax, settle or compromise any federal Tax liability or refund, settle or compromise any material state, local or other Tax liability or refund, enter into any material agreement relating to federal, state, local or other Taxes, file any amended federal Tax Return or material state, local or other Tax Return or claim for refund or otherwise make a material change in the Tax compliance practices of the Company, except that no consent shall be required with respect to settlement those representations and warranties that are by their terms qualified by a standard of a pending Tax claim for no more than 110% of the amountmateriality, as of the date of this Agreement, of the FIN 48 reserves applicable to that claim;
(m) acquire untrue or materially alter incorrect when made in any Owned Real Estate or any Ground Leased Real Estate;
(n) enter into any Store Leases other than in the ordinary course of business consistent in all material respects with past practice; or
(o) agree or commit to do any of the foregoingrespect).
Appears in 1 contract
Samples: Merger Agreement (Intersections Inc)
