Conduct of Business Pending Merger. (a) RISCORP agrees that from the date hereof to the Effective Time, except as contemplated by this Agreement or to the extent that Acquiror shall otherwise consent in writing, RISCORP and the RISCORP Subsidiaries will operate their businesses only in the ordinary course, and, consistent with its business practices since April 1, 1998. (b) RISCORP agrees that from the date hereof to the Effective Time, except as otherwise consented to by Acquiror in writing or as permitted, required or contemplated by this Agreement, (i) neither it nor any RISCORP Subsidiary will change any provision of its Certificate of Incorporation or Bylaws or similar governing documents (subject to compliance with Section 5.11 hereto, except such changes as are necessary to effectuate the surrender and/or sale of RISCORP's or RISCORP Subsidiaries' certificate of authority or licenses to transact the business of insurance in the state where such certificates of authority or licenses are currently held); (ii) neither it nor any RISCORP Subsidiary will not make, declare or pay any dividend except for any dividend declared or paid by any RISCORP Subsidiary to RISCORP or any RISCORP Subsidiary; and (iii) neither it nor any RISCORP Subsidiary will make any distribution or directly or indirectly sell, issue, redeem, purchase or otherwise acquire, any shares of its outstanding capital stock, change the number of shares of its authorized or issued capital stock or issue or grant any option, warrant, call, commitment, subscription, right to purchase or agreement of any character relating to its authorized or issued capital stock or any securities convertible into shares of such stock. (c) RISCORP agrees that, except to the extent (i) consented to by Acquiror in writing or (ii) permitted, required or contemplated by this Agreement, from the date hereof it will not, nor will it permit any RISCORP Subsidiary to: (i) enter into any agreement representing an obligation for indebtedness for borrowed money or increase the principal amount of indebtedness under any existing agreement or assume, guarantee, endorse or otherwise become responsible for the obligations of any other individual, firm or corporation; (ii) sell, mortgage, encumber or pledge any of its properties or assets; (iii) take any action to (A) amend or terminate any RISCORP Employee Plan, (B) increase the compensation of any of its directors, executive officers or employees, (C) adopt any other plan, program, arrangement or practice providing new or increased benefits or compensation to its employees, or (D) modify, accelerate the benefits under, amend or terminate any agreement with any of RISCORP's agents, employees, officers or directors, except as set forth in Section 5.2(c)(xiv); (iv) enter into any negotiation with respect to or adopt any collective bargaining agreement; (v) make any significant change in any accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in statutory accounting rules or GAAP; (vi) pay, loan or advance any amount to, or sell, transfer or lease any properties or assets (real, personal or mixed, tangible or intangible) to, or enter into any material agreement or arrangement with, any (A) of its officers or directors, (B) "affiliate" or "associate" of any of its officers or directors (as such terms are defined in Rule 405 promulgated under the Securities Act) or (C) third party; (vii) make any tax election or settle or compromise tax liability that would reasonably be expected to have a Material Adverse Effect on RISCORP; (viii) split, combine, or reclassify any capital stock of RISCORP or any RISCORP Subsidiary; (ix) acquire or agree to acquire by merging or consolidating with or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof; (x) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization; (xi) invest assets of RISCORP or any RISCORP Subsidiary in any security, instrument, or other investment other than in the ordinary course of business at then prevailing market rates consistent with RISCORP's written investment policy; (xii) amend, terminate, modify, or accelerate any material contract or agreement to which RISCORP is a party; (xiii) modify, amend or terminate RISCORP's written investment policy; (xiv) modify or accelerate the provisions of or terminate or amend any contract with The Phoenix Management Company, Ltd. or Xxxxxxx Xxxxxxx and Company, P.A., provided that RISCORP shall be authorized to take any action necessary to (A)(1) accelerate, effective as of the Closing, the vesting of the Class A Common Stock issued to The Phoenix Management Company, Ltd. pursuant to that certain Restricted Stock Award Agreement by and between The Phoenix Management Company, Ltd. and RISCORP and (2) amend the provisions of the Management Agreement of RISCORP, Inc. dated February 18, 1998 (the "Management Agreement") to reduce the fees paid to The Phoenix Management Company, Ltd. to such amount RISCORP deems appropriate after notice to Acquiror or (B) terminate the Management Agreement. (xv) enter into any agreement to take any of the actions described in Section 5.2(b) or elsewhere in this Section 5.2(c). (d) RISCORP shall keep Acquiror and Guarantor informed with respect to the status of any litigation to which RISCORP, any RISCORP Subsidiary, or any officer, director or employee of RISCORP or any RISCORP Subsidiary is a party (whether or not commenced prior to the date of this Agreement) and shall not settle or compromise any such litigation in which RISCORP or any RISCORP Subsidiary is a defendant without the consent of Acquiror; provided that RISCORP may enter into any settlement agreement for any litigation to which any RISCORP Subsidiary is a defendant in which a determination has been made by RISCORP that neither it nor or any RISCORP Subsidiary has any reasonable basis to assert claims for, cross claims for, or similar rights to recovery if the amount paid for such settlement by RISCORP and the RISCORP Subsidiaries does not exceed $100,000 for any such individual litigation claim and does not exceed $250,000 in the aggregate for all such litigation claims. Further, RISCORP covenants and agrees that it will consult with representatives of Acquiror on an on-going basis with respect to the direction and material decisions affecting the disposition of all litigation in which RISCORP or any RISCORP Subsidiary is either a plaintiff or asserting a cross or other similar form of claim and shall not take any action to settle or compromise and/or resolve any such claim without first giving Acquiror's representatives adequate opportunity to consider the merits of any such settlement, compromise or resolution and an opportunity to advise RISCORP of Acquiror's views with respect to the merits of any such proposed settlement, compromise and/or resolution. (e) Except as provided by this Section 5.2(e) RISCORP shall not, nor shall it permit any RISCORP Subsidiary to, nor shall it authorize or permit any officer, director or employee of, or any investment banker, attorney or other advisor or representative or agent of, RISCORP or any RISCORP Subsidiary to, directly or indirectly, (i) solicit, initiate or encourage the submission of any bona fide proposal with respect to a merger, consolidation, share exchange or similar transaction involving RISCORP or any RISCORP Subsidiary, or any purchase of all or substantially all of the assets of RISCORP other than the transactions contemplated hereby (an "Acquisition Proposal"); (ii) furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Acquisition Proposal; (iii) withdraw, qualify or modify, or propose publicly to withdraw, qualify or modify, in a manner adverse to Acquiror, the approval or recommendation of RISCORP's Board of Directors or any committee thereof of the Merger or this Agreement; (iv) approve or recommend, or propose publicly to approve or recommend, any transaction involving an Acquisition Proposal from a third party (an "Alternative Transaction"); or (v) cause RISCORP to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Alternative Transaction (each an "Acquisition Agreement"). Notwithstanding the foregoing, nothing herein shall prevent RISCORP's Board of Directors from furnishing non-public information to or entering into discussions or negotiations with any person or entity in connection with an unsolicited bona fide Alternative Transaction or recommending such an unsolicited bona fide Alternative Transaction to the stockholders of RISCORP, if and only to the extent that, RISCORP's Board of Directors determines in good faith (after receiving advice from outside counsel as to its fiduciary duties to RISCORP's stockholders under applicable law) that it has received a Superior Proposal (as hereinafter defined). If, in accordance with the immediately preceding sentence, RISCORP's Board of Directors believes it has received a Superior Proposal, it may inform RISCORP's stockholders that it no longer believes that the Merger is advisable and no longer recommends approval of the Merger (a "Subsequent Determination") and may enter into an Acquisition Agreement with respect to a Superior Proposal, but only at a time that is after the third business day following Acquiror's receipt of written notice advising Acquiror that RISCORP's Board of Directors has received a Superior Proposal. Such written notice shall specify the material terms and conditions of such Superior Proposal, identify the person making such Superior Proposal and state that RISCORP's Board of Directors intends to make a Subsequent Determination. During such three business day period, RISCORP shall provide an opportunity for Acquiror to propose such adjustments to the terms and conditions of this Agreement as would enable RISCORP to proceed with its recommendation to its stockholders without a Subsequent Determination; provided, however, that the acceptance of any such proposed adjustment shall be at the sole discretion of RISCORP's Board of Directors, exercised in good faith, and this Agreement shall be amended to reflect any such accepted adjustments; provided, further, however, that any such proposed adjustment, the sole effect of which is to (i) increase
Appears in 2 contracts
Samples: Merger Agreement (Riscorp Inc), Merger Agreement (Riscorp Inc)
Conduct of Business Pending Merger. (a) RISCORP agrees that Except for Permitted ---------------------------------- Transactions, as otherwise specifically provided in this Agreement or in the other Documents or as otherwise consented to in writing by FRI, which consent shall not be unreasonably withheld, from the date hereof of this Agreement to the Effective Time, except as contemplated by this Agreement or to KKR will, and will cause each of the extent that Acquiror shall otherwise consent in writingKKR Subsidiaries to, RISCORP and the RISCORP Subsidiaries will operate their businesses conduct its operations only in the ordinary course, and, and usual course of business and consistent with past practices and will, and will cause each of the KKR Subsidiaries to, preserve intact its present business practices since April 1organization, 1998.
(b) RISCORP agrees that take commercially reasonable efforts to keep available the services of its present officers, employees and consultants and preserve its present relationships with licensors, licensees, customers, suppliers, employees, labor organizations and others with whom they have a significant business relationship. Without limiting the generality of the foregoing, and except for Permitted Transactions, as otherwise specifically provided in this Agreement or in the other Documents, or as set forth on Schedule 7.3, KKR will not, and will not permit any KKR Subsidiary to, directly or indirectly, from the date hereof of this Agreement to the Effective Time, without the prior written consent of FRI, which shall not be unreasonably withheld:
(a) adopt any amendment to or otherwise change the Charter Documents of KKR or any KKR Subsidiary;
(b) authorize for issuance, sale, pledge, disposition or encum brance, or issue, sell, pledge, dispose of or encumber (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase, convertible securities or otherwise), any capital stock of any class or any other securities of, or any other ownership interest in, KKR or any KKR Subsidiary (except as otherwise consented to by Acquiror in writing or as permitted, required or contemplated by this Agreement, for (1) the issuance of KKR Common Shares (i) neither it nor any RISCORP Subsidiary will change any provision upon the exercise of its Certificate of Incorporation or Bylaws or similar governing documents (subject to compliance with Section 5.11 heretooptions and warrants outstanding on the date hereof, except such changes as are necessary to effectuate the surrender and/or sale of RISCORP's or RISCORP Subsidiaries' certificate of authority or licenses to transact the business of insurance in the state where such certificates of authority or licenses are currently held); (ii) neither it nor upon conversion or exchange of the KKR Preferred Shares outstanding on the date hereof or issuable upon the exercise of warrants outstanding as of the date hereof, or (iii) the issuance of KKR Common Shares in payment of accrued and unpaid dividends on the KKR Preferred Shares in accordance with the terms thereof and (2) as contemplated by Sections 7.1 and 7.2 hereof), or amend any RISCORP Subsidiary will not makeof the terms of any such securities or agreements outstanding on the date hereof;
(c) reclassify, declare combine, split or subdivide any shares of its capital stock, declare, set aside or pay any dividend except for any dividend declared or paid by any RISCORP Subsidiary to RISCORP other distribution (whether in cash, securities or property or any RISCORP Subsidiary; and combination thereof) in respect of any class or series of its capital stock (iiiother than regularly scheduled dividends on the KKR Preferred Shares paid in cash in accordance with the terms thereof);
(d) neither it nor any RISCORP Subsidiary will make any distribution redeem, purchase or directly otherwise acquire, or indirectly sell, issue, propose or offer to redeem, purchase or otherwise acquire, any shares outstanding KKR Shares or other securities of its outstanding capital stockKKR or the KKR Subsidiaries;
(e) organize any new Subsidiary, change the number of shares of its authorized or issued acquire any capital stock or issue or grant any option, warrant, call, commitment, subscription, right to purchase or agreement equity securities of any character relating to its authorized Person or issued capital stock acquire any equity or ownership interest (financial or otherwise) in any securities convertible into shares of such stock.business;
(cf) RISCORP agrees that, except to the extent (i) consented to by Acquiror in writing incur, assume or (ii) permittedprepay any material liability, required or contemplated by this Agreementincluding, from the date hereof it will notwithout limitation, nor will it permit any RISCORP Subsidiary to:
(i) enter into any agreement representing an obligation for indebtedness for borrowed money or increase except in the principal amount ordinary course of indebtedness under any existing agreement or business and consistent with past practice, and in no event in excess of $50,000, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other individualthird party, firm (iii) make any loans, advances or corporation;
capital contributions to, or investments in, any third party, (iiiv) sell, mortgage, encumber mortgage or pledge any of its material properties or assets;
(iii) take any action to (A) amend or terminate any RISCORP Employee Plan, (B) increase the compensation of any of its directors, executive officers or employees, (C) adopt any other plan, program, arrangement or practice providing new or increased benefits or compensation to its employees, or (D) modify, accelerate the benefits under, amend or terminate any agreement with any of RISCORP's agents, employees, officers or directors, except as set forth in Section 5.2(c)(xiv);
(iv) enter into any negotiation with respect to or adopt any collective bargaining agreement;
(v) make any significant change in any accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in statutory accounting rules or GAAP;
(vi) pay, loan or advance any amount to, or sell, transfer or lease any properties or assets (real, personal or mixed, tangible or intangible) to, or enter into create any material agreement or arrangement withLien thereupon other than Permitted Liens, any (A) of its officers or directors, (B) "affiliate" or "associate" of any of its officers or directors (as such terms are defined in Rule 405 promulgated under the Securities Act) or (Cv) third partyauthorize any capital expenditures not in KKR's capital budget on the date hereof which, individually or in the aggregate, are in excess of $50,000;
(viig) make license or otherwise transfer, dispose of, permit to lapse or otherwise fail to preserve any tax election Intellectual Property of KKR or settle any KKR Subsidiary, or compromise tax liability that dispose of or disclose to any person any trade secret, formula, process or know-how not theretofore a matter of public knowledge, except where such disposal or disclosure would not, individually or in the aggregate, be reasonably be expected to have a Material Adverse Effect on RISCORP;KKR.
(viiih) splitenter into or amend any material agreement, combinecontract, lease, commitment or reclassify any capital stock of RISCORP or any RISCORP Subsidiary;
(ix) acquire or agree to acquire by merging or consolidating with or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof;
(x) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization;
(xi) invest assets of RISCORP or any RISCORP Subsidiary in any security, instrument, or other investment transaction other than in the ordinary course of business at then prevailing market rates business, consistent with RISCORP's written investment policypast practices;
(xiii) amendcancel any debts or waive, terminate, modify, release or accelerate relinquish any material contract rights or agreement to which RISCORP is a partyother rights of substantial value other than in the ordinary course of business, consistent with past practices;
(xiiij) modifyexcept in accordance with Sections 7.1, amend 7.4 and 10.1(e), authorize, recommend, propose or terminate RISCORP's written investment policy;
(xiv) modify or accelerate the provisions of or terminate or amend any contract with The Phoenix Management Company, Ltd. or Xxxxxxx Xxxxxxx and Company, P.A., provided that RISCORP shall be authorized to take any action necessary to (A)(1) accelerate, effective as of the Closing, the vesting of the Class A Common Stock issued to The Phoenix Management Company, Ltd. pursuant to that certain Restricted Stock Award Agreement by and between The Phoenix Management Company, Ltd. and RISCORP and (2) amend the provisions of the Management Agreement of RISCORP, Inc. dated February 18, 1998 (the "Management Agreement") to reduce the fees paid to The Phoenix Management Company, Ltd. to such amount RISCORP deems appropriate after notice to Acquiror or (B) terminate the Management Agreement.
(xv) enter into any or announce an intention to authorize, recommend, propose or enter into an agreement to take any of the actions described in Section 5.2(b) principle or elsewhere in this Section 5.2(c).
(d) RISCORP shall keep Acquiror and Guarantor informed a definitive agreement with respect to the status of any litigation to which RISCORP, any RISCORP Subsidiary, or any officer, director or employee of RISCORP or any RISCORP Subsidiary is a party (whether or not commenced prior to the date of this Agreement) and shall not settle or compromise any such litigation in which RISCORP or any RISCORP Subsidiary is a defendant without the consent of Acquiror; provided that RISCORP may enter into any settlement agreement for any litigation to which any RISCORP Subsidiary is a defendant in which a determination has been made by RISCORP that neither it nor or any RISCORP Subsidiary has any reasonable basis to assert claims for, cross claims for, or similar rights to recovery if the amount paid for such settlement by RISCORP and the RISCORP Subsidiaries does not exceed $100,000 for any such individual litigation claim and does not exceed $250,000 in the aggregate for all such litigation claims. Further, RISCORP covenants and agrees that it will consult with representatives of Acquiror on an on-going basis with respect to the direction and material decisions affecting the disposition of all litigation in which RISCORP or any RISCORP Subsidiary is either a plaintiff or asserting a cross or other similar form of claim and shall not take any action to settle or compromise and/or resolve any such claim without first giving Acquiror's representatives adequate opportunity to consider the merits of any such settlement, compromise or resolution and an opportunity to advise RISCORP of Acquiror's views with respect to the merits of any such proposed settlement, compromise and/or resolution.
(e) Except as provided by this Section 5.2(e) RISCORP shall not, nor shall it permit any RISCORP Subsidiary to, nor shall it authorize or permit any officer, director or employee of, or any investment banker, attorney or other advisor or representative or agent of, RISCORP or any RISCORP Subsidiary to, directly or indirectly, (i) solicit, initiate or encourage the submission of any bona fide proposal with respect to a merger, consolidation, share exchange liquidation, acquisition of a material amount of property or similar transaction involving RISCORP assets or securities, or any RISCORP disposition of a material amount of property or assets or securities;
(k) make any material change with respect to accounting policies or procedures in effect as of December 31, 1997 except as may be required by generally accepted accounting principles;
(l) 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 course of business, consistent with past practices, of liabilities reflected or reserved against in the Financial Statements of KKR or incurred in the ordinary course of business, consistent with past practices since the date hereof;
(m) effectuate (i) a "plant closing" (as defined in the WARN Act) affecting any site of employment or one or more facilities or operating units within any site of employment of KKR or any KKR Subsidiary, or any purchase of all or substantially all of the assets of RISCORP other than the transactions contemplated hereby (an "Acquisition Proposal"); (ii) furnish a "mass layoff" (as defined in the WARN Act) affecting any site of employment of KKR or any KKR Subsidiary, without complying fully with any and all notice obligations (and/or pay and benefits in lieu of notice) under the WARN Act or any similar obligation under applicable state or local law requiring notice (and/or pay and benefits in lieu of notice) to any person any information with respect to, employees in the event of a plant closing or take any other action to facilitate any inquiries or layoff. For purposes of the making of any proposal that constitutes, or may reasonably be expected to lead to, any Acquisition Proposal; (iii) withdraw, qualify or modify, or propose publicly to withdraw, qualify or modify, in a manner adverse to AcquirorWARN Act and this Agreement, the approval or recommendation of RISCORP's Board of Directors or any committee thereof Effective Time is and shall be the same as the "effective date" within the meaning of the Merger or this Agreement; (iv) approve or recommend, or propose publicly to approve or recommend, any transaction involving an Acquisition Proposal from a third party (an "Alternative Transaction"); or (v) cause RISCORP to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Alternative Transaction (each an "Acquisition Agreement"). Notwithstanding the foregoing, nothing herein shall prevent RISCORP's Board of Directors from furnishing non-public information to or entering into discussions or negotiations with any person or entity in connection with an unsolicited bona fide Alternative Transaction or recommending such an unsolicited bona fide Alternative Transaction to the stockholders of RISCORP, if and only to the extent that, RISCORP's Board of Directors determines in good faith (after receiving advice from outside counsel as to its fiduciary duties to RISCORP's stockholders under applicable law) that it has received a Superior Proposal (as hereinafter defined). If, in accordance with the immediately preceding sentence, RISCORP's Board of Directors believes it has received a Superior Proposal, it may inform RISCORP's stockholders that it no longer believes that the Merger is advisable and no longer recommends approval of the Merger (a "Subsequent Determination") and may enter into an Acquisition Agreement with respect to a Superior Proposal, but only at a time that is after the third business day following Acquiror's receipt of written notice advising Acquiror that RISCORP's Board of Directors has received a Superior Proposal. Such written notice shall specify the material terms and conditions of such Superior Proposal, identify the person making such Superior Proposal and state that RISCORP's Board of Directors intends to make a Subsequent Determination. During such three business day period, RISCORP shall provide an opportunity for Acquiror to propose such adjustments to the terms and conditions of this Agreement as would enable RISCORP to proceed with its recommendation to its stockholders without a Subsequent Determination; provided, however, that the acceptance of any such proposed adjustment shall be at the sole discretion of RISCORP's Board of Directors, exercised in good faith, and this Agreement shall be amended to reflect any such accepted adjustments; provided, further, however, that any such proposed adjustment, the sole effect of which is to (i) increaseWARN Act;
Appears in 1 contract
Conduct of Business Pending Merger. The Company agrees that between the date hereof and the Closing Date, the Business shall be conducted only in, and the Company shall not take any action except in, the Ordinary Course of Business, as set forth in this Section 5.02 or as set forth in Schedule 5.02 of the Disclosure Schedule. The Company shall preserve substantially intact the business organization of the Company, keep available the services of the current officers, directors, employees and consultants of the Company, and use commercially reasonable efforts to preserve the current relationships of the Company with customers, licensors, licensees and other Persons with which the Company has significant business relations and where the loss of any such relationship would, either individually or in the aggregate, have a Material Adverse Effect on the Business. Except as otherwise provided in this Section 5.02, the Company agrees that, prior to the Closing Date, it will not incur any liability (including compensation paid to officers, directors or employees or dividends to Shareholders) that is at variance with past practices, is not reasonable or is not in the Ordinary Course of Business. The Company agrees that, prior to the Closing Date, it will not issue any additional Shares or other securities of the Company, including securities convertible into Shares or other securities of the Company, except for the issuance of Shares pursuant to the terms of warrants, options, calls, commitments or other rights or agreements to which the Company is subject to or bound relating to the issuance, sale, transfer or redemption of Shares or other securities of the Company listed in Schedule 3.04 hereto. Notwithstanding anything to the contrary in this Agreement, except Section 2.02(a)(ii) hereof,
(a) RISCORP agrees that from the date hereof Company shall be entitled to pay dividends to the Effective Time, except as contemplated by this Agreement or to the extent that Acquiror shall otherwise consent in writing, RISCORP and the RISCORP Subsidiaries will operate their businesses only Shareholders in the ordinary course, and, consistent with its business practices since April 1, 1998.aggregate amount of up to $1.50 per Share;
(b) RISCORP agrees that from the date hereof Company shall be entitled to the Effective Time, except as otherwise consented pay bonuses to by Acquiror in writing or as permitted, required or contemplated by this Agreement, (i) neither it nor any RISCORP Subsidiary will change any provision of its Certificate of Incorporation or Bylaws or similar governing documents (subject to compliance with Section 5.11 hereto, except such changes as are necessary to effectuate the surrender and/or sale of RISCORP's or RISCORP Subsidiaries' certificate of authority or licenses to transact the business of insurance employees in the state where such certificates aggregate amount of authority or licenses are currently held)up to $400,000; (ii) neither it nor any RISCORP Subsidiary will not make, declare or pay any dividend except for any dividend declared or paid by any RISCORP Subsidiary to RISCORP or any RISCORP Subsidiary; and (iii) neither it nor any RISCORP Subsidiary will make any distribution or directly or indirectly sell, issue, redeem, purchase or otherwise acquire, any shares of its outstanding capital stock, change the number of shares of its authorized or issued capital stock or issue or grant any option, warrant, call, commitment, subscription, right to purchase or agreement of any character relating to its authorized or issued capital stock or any securities convertible into shares of such stock.and
(c) RISCORP agrees thatthe Company and the TruVision Subsidiaries shall be entitled to enter into definitive agreements with the consortium of Blue Cross Blue Shield health plans who are parties to those certain startup agreements with the Company and one or more TruVision Subsidiaries made as of September 29, except 2005, copies of which have been provided to TLC, which definitive agreements will be services agreements pursuant to which the extent Company and one or more TruVision Subsidiaries will arrange to provide enrollees of Blue Cross Blue Shield plans with access to discounted hearing instruments, laser eye surgery, contact lenses, cosmetic surgery, cosmetic dental and related items and services through the Company's and TruVision Subsidiaries' network of providers; provided that the form of such definitive agreements shall be acceptable to TLC, acting reasonably.
(id) consented the Company and the TruVision Subsidiaries shall be entitled to by Acquiror in writing or (ii) permittedenter into definitive agreements, required or contemplated by this Agreementacceptable to TLC acting reasonably, from with each of the date hereof it will notfollowing companies, nor will it permit any RISCORP Subsidiary toeach of which with whom the Company is currently negotiating the terms and conditions of such definitive agreements:
(i) enter into any agreement representing an obligation Wal-Mart (for indebtedness for borrowed money or increase the principal amount of indebtedness under any existing agreement or assume, guarantee, endorse or otherwise become responsible for the obligations of any other individual, firm or corporation;LASIK services); 106
(ii) sellExcellus Blue Cross Blue Shield of Rochester, mortgage, encumber or pledge any of its properties or assetsCentral New York and Utica-Watertown (for LASIK and contact services);
(iii) take any action to CareFirst Blue Cross Blue Shield of Maryland, Delaware and Washington D.C. (A) amend or terminate any RISCORP Employee Plan, (B) increase the compensation of any of its directors, executive officers or employees, (C) adopt any other plan, program, arrangement or practice providing new or increased benefits or compensation to its employees, or (D) modify, accelerate the benefits under, amend or terminate any agreement with any of RISCORP's agents, employees, officers or directors, except as set forth in Section 5.2(c)(xivfor cosmetic surgery and dental services);
(iv) enter into any negotiation with respect to or adopt any collective bargaining agreementBlue Cross Blue Shield Northern Alliance Region 19/25, Medicare Advantage & Part D Iowa, Minnesota, North Dakota, South Dakota, Nebraska, Montana and Wyoming (for LASIK, contact, hearing, cosmetic surgery and dental services);
(v) make any significant change in any accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in statutory accounting rules or GAAPArkansas Blue Cross Blue Shield (for hearing and cosmetic surgery services);
(vi) payBlue Cross Blue Shield of Illinois, loan or advance any amount to, or sell, transfer or lease any properties or assets New Mexico and Texas (real, personal or mixed, tangible or intangible) to, or enter into any material agreement or arrangement with, any (A) of its officers or directors, (B) "affiliate" or "associate" of any of its officers or directors (as such terms are defined in Rule 405 promulgated under the Securities Act) or (C) third partyfor hearing services);
(vii) make any tax election or settle or compromise tax liability that would reasonably be expected to have a Material Adverse Effect on RISCORPBlue Cross Blue Shield of New Mexico (for LASIK and contact services);
(viii) split, combine, or reclassify any capital stock Blue Cross of RISCORP or any RISCORP SubsidiaryIdaho (for cosmetic surgery services);
(ix) acquire or agree to acquire by merging or consolidating with or by purchasing a substantial portion Blue Cross Blue Shield of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereofFlorida (for cosmetic surgery services);
(x) adopt a plan of complete or partial liquidation or resolutions providing Wellpoint, Inc. RFP Discount Hearing Services (for or authorizing such a liquidation or a dissolutionIndiana, mergerOhio, consolidationKentucky, restructuringNew Hampshire, recapitalization or reorganizationMaine, Connecticut, Colorado, Missouri, Georgia, Wisconsin, California and Nevada);
(xi) invest assets Horizon Blue Cross Blue Shield of RISCORP or any RISCORP Subsidiary in any security, instrument, or other investment other than in the ordinary course of business at then prevailing market rates consistent with RISCORP's written investment policyNew Jersey RFI Discount Hearing and Cosmetic Services;
(xii) amend, terminate, modify, or accelerate any material contract or agreement to which RISCORP is a party;Blue Cross Blue Shield Michigan RFI Discount Vision Services; and
(xiii) modify, amend or terminate RISCORP's written investment policy;
(xiv) modify or accelerate the provisions of or terminate or amend any contract with The Phoenix Management Company, Ltd. or Xxxxxxx Xxxxxxx and Company, P.A., provided that RISCORP shall be authorized to take any action necessary to (A)(1) accelerate, effective as of the Closing, the vesting of the Class A Common Stock issued to The Phoenix Management Company, Ltd. pursuant to that certain Restricted Stock Award Agreement by and between The Phoenix Management Company, Ltd. and RISCORP and (2) amend the provisions of the Management Agreement of RISCORPWellmark, Inc. dated February 18Blue Cross Blue Shield of Iowa and South Dakota (for LASIK, 1998 (the "Management Agreement") to reduce the fees paid to The Phoenix Management Companycontacts, Ltd. to such amount RISCORP deems appropriate after notice to Acquiror or (B) terminate the Management Agreement.
(xv) enter into any agreement to take any of the actions described in Section 5.2(b) or elsewhere in this Section 5.2(chearing and cosmetic surgery services).
(d) RISCORP shall keep Acquiror and Guarantor informed with respect to the status of any litigation to which RISCORP, any RISCORP Subsidiary, or any officer, director or employee of RISCORP or any RISCORP Subsidiary is a party (whether or not commenced prior to the date of this Agreement) and shall not settle or compromise any such litigation in which RISCORP or any RISCORP Subsidiary is a defendant without the consent of Acquiror; provided that RISCORP may enter into any settlement agreement for any litigation to which any RISCORP Subsidiary is a defendant in which a determination has been made by RISCORP that neither it nor or any RISCORP Subsidiary has any reasonable basis to assert claims for, cross claims for, or similar rights to recovery if the amount paid for such settlement by RISCORP and the RISCORP Subsidiaries does not exceed $100,000 for any such individual litigation claim and does not exceed $250,000 in the aggregate for all such litigation claims. Further, RISCORP covenants and agrees that it will consult with representatives of Acquiror on an on-going basis with respect to the direction and material decisions affecting the disposition of all litigation in which RISCORP or any RISCORP Subsidiary is either a plaintiff or asserting a cross or other similar form of claim and shall not take any action to settle or compromise and/or resolve any such claim without first giving Acquiror's representatives adequate opportunity to consider the merits of any such settlement, compromise or resolution and an opportunity to advise RISCORP of Acquiror's views with respect to the merits of any such proposed settlement, compromise and/or resolution.
(e) Except as provided by this Section 5.2(e) RISCORP shall not, nor shall it permit any RISCORP Subsidiary to, nor shall it authorize or permit any officer, director or employee of, or any investment banker, attorney or other advisor or representative or agent of, RISCORP or any RISCORP Subsidiary to, directly or indirectly, (i) solicit, initiate or encourage the submission of any bona fide proposal with respect to a merger, consolidation, share exchange or similar transaction involving RISCORP or any RISCORP Subsidiary, or any purchase of all or substantially all of the assets of RISCORP other than the transactions contemplated hereby (an "Acquisition Proposal"); (ii) furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Acquisition Proposal; (iii) withdraw, qualify or modify, or propose publicly to withdraw, qualify or modify, in a manner adverse to Acquiror, the approval or recommendation of RISCORP's Board of Directors or any committee thereof of the Merger or this Agreement; (iv) approve or recommend, or propose publicly to approve or recommend, any transaction involving an Acquisition Proposal from a third party (an "Alternative Transaction"); or (v) cause RISCORP to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Alternative Transaction (each an "Acquisition Agreement"). Notwithstanding the foregoing, nothing herein shall prevent RISCORP's Board of Directors from furnishing non-public information to or entering into discussions or negotiations with any person or entity in connection with an unsolicited bona fide Alternative Transaction or recommending such an unsolicited bona fide Alternative Transaction to the stockholders of RISCORP, if and only to the extent that, RISCORP's Board of Directors determines in good faith (after receiving advice from outside counsel as to its fiduciary duties to RISCORP's stockholders under applicable law) that it has received a Superior Proposal (as hereinafter defined). If, in accordance with the immediately preceding sentence, RISCORP's Board of Directors believes it has received a Superior Proposal, it may inform RISCORP's stockholders that it no longer believes that the Merger is advisable and no longer recommends approval of the Merger (a "Subsequent Determination") and may enter into an Acquisition Agreement with respect to a Superior Proposal, but only at a time that is after the third business day following Acquiror's receipt of written notice advising Acquiror that RISCORP's Board of Directors has received a Superior Proposal. Such written notice shall specify the material terms and conditions of such Superior Proposal, identify the person making such Superior Proposal and state that RISCORP's Board of Directors intends to make a Subsequent Determination. During such three business day period, RISCORP shall provide an opportunity for Acquiror to propose such adjustments to the terms and conditions of this Agreement as would enable RISCORP to proceed with its recommendation to its stockholders without a Subsequent Determination; provided, however, that the acceptance of any such proposed adjustment shall be at the sole discretion of RISCORP's Board of Directors, exercised in good faith, and this Agreement shall be amended to reflect any such accepted adjustments; provided, further, however, that any such proposed adjustment, the sole effect of which is to (i) increase
Appears in 1 contract
Samples: Merger Agreement (TLC Vision Corp)
Conduct of Business Pending Merger. (a) RISCORP agrees that Except for Permitted Transactions, as otherwise specifically provided in this Agreement or in the other Documents or as otherwise consented to in writing by KKR, which consent shall not be unreasonably withheld, from the date hereof of this Agreement to the Effective Time, except as contemplated by this Agreement or to FRI will, and will cause each of the extent that Acquiror shall otherwise consent in writingFRI Subsidiaries to, RISCORP and the RISCORP Subsidiaries will operate their businesses conduct its operations only in the ordinary course, and, and usual course of business and consistent with past practices and will, and will cause each of the FRI Subsidiaries to, preserve intact its present business practices since April 1organization, 1998.
(b) RISCORP agrees that take commercially reasonable efforts to keep available the services of its present officers, employees and consultants and preserve its present relationships with licensors, licensees, customers, suppliers, employees, labor organizations and others with whom they have a significant business relationship. Without limiting the generality of the foregoing, and except for Permitted Transactions, as otherwise specifically provided in this Agreement or in the other Documents or as set forth in Schedule 6.3, FRI will not, and will not permit any FRI Subsidiary to, indirectly, from the date hereof of this Agreement to the Effective Time, except as without the prior written consent of KKR, which shall not be unreasonably withheld:
(a) adopt any amendment to or otherwise consented change the Charter Documents of FRI or Merger-Sub;
(b) authorize for issuance, sale, pledge, disposition or encumbrance, or issue, sell, pledge, dispose of or encumber (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to by Acquiror in writing purchase, convertible securities or as permittedotherwise), required any capital stock of any class or contemplated by this Agreementany other securities of, or any other ownership interest in, FRI or any FRI Subsidiary, (iother than the FRI Shares to be issued in the Merger), or amend any of the terms of any such securities or agreements outstanding on the date hereof;
(c) neither it nor reclassify, combine, split or subdivide any RISCORP Subsidiary will change any provision shares of its Certificate of Incorporation or Bylaws or similar governing documents (subject to compliance with Section 5.11 heretocapital stock, except such changes as are necessary to effectuate the surrender and/or sale of RISCORP's or RISCORP Subsidiaries' certificate of authority or licenses to transact the business of insurance in the state where such certificates of authority or licenses are currently held); (ii) neither it nor any RISCORP Subsidiary will not makedeclare, declare set aside or pay any dividend except for any dividend declared or paid by any RISCORP Subsidiary to RISCORP other distribution (whether in cash, securities or property or any RISCORP Subsidiary; and combination thereof) in respect of any class or series of its capital stock;
(iiid) neither it nor any RISCORP Subsidiary will make any distribution redeem, purchase or directly otherwise acquire, or indirectly sell, issue, propose or offer to redeem, purchase or otherwise acquire, any shares outstanding FRI Shares or other securities of its outstanding capital stockFRI or any of the FRI Subsidiaries;
(e) organize any new Subsidiary (other than Merger-Sub), change the number of shares of its authorized or issued acquire any capital stock or issue or grant any option, warrant, call, commitment, subscription, right to purchase or agreement equity securities of any character relating to its authorized Person or issued capital stock acquire any equity or ownership interest (financial or otherwise) in any securities convertible into shares business, other than de minimus investments in public corporations whose principal business includes the operation of such stock.restaurants;
(cf) RISCORP agrees that, except to the extent (i) consented to by Acquiror in writing incur, assume or (ii) permittedprepay any material liability, required or contemplated by this Agreementincluding, from the date hereof it will notwithout limitation, nor will it permit any RISCORP Subsidiary to:
(i) enter into any agreement representing an obligation for indebtedness for borrowed money or increase except in the principal amount ordinary course of indebtedness under any existing agreement or business and consistent with past practice, and in no event in excess of $50,000, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other individualthird party, firm (iii) make any loans, advances or corporation;
capital contributions to, or investments in, any third party, (iiiv) sell, mortgage, encumber mortgage or pledge any of its material properties or assets;
(iii) take any action to (A) amend or terminate any RISCORP Employee Plan, (B) increase the compensation of any of its directors, executive officers or employees, (C) adopt any other plan, program, arrangement or practice providing new or increased benefits or compensation to its employees, or (D) modify, accelerate the benefits under, amend or terminate any agreement with any of RISCORP's agents, employees, officers or directors, except as set forth in Section 5.2(c)(xiv);
(iv) enter into any negotiation with respect to or adopt any collective bargaining agreement;
(v) make any significant change in any accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in statutory accounting rules or GAAP;
(vi) pay, loan or advance any amount to, or sell, transfer or lease any properties or assets (real, personal or mixed, tangible or intangible) to, or enter into create any material agreement or arrangement withLien thereupon other than Permitted Liens, any (A) of its officers or directors, (B) "affiliate" or "associate" of any of its officers or directors (as such terms are defined in Rule 405 promulgated under the Securities Act) or (Cv) third partyauthorize any capital expenditures not in FRI's capital budget on the date hereof which, individually or in the aggregate, are in excess of $1,000,000;
(viig) make license or otherwise transfer, dispose of, permit to lapse or otherwise fail to preserve any tax election Intellectual Property of FRI or settle any FRI Subsidiary, or compromise tax liability that dispose of or disclose to any person any trade secret, formula, process or know-how not theretofore a matter of public knowledge, except where such disposal or disclosure would not, individually or in the aggregate, be reasonably be expected to have a Material Adverse Effect on RISCORPFRI;
(viiih) splitenter into any material agreement, combinecontract, commitment or reclassify any capital stock of RISCORP or any RISCORP Subsidiary;
(ix) acquire or agree to acquire by merging or consolidating with or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof;
(x) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization;
(xi) invest assets of RISCORP or any RISCORP Subsidiary in any security, instrument, or other investment transaction other than in the ordinary course of business at then prevailing market rates business, consistent with RISCORP's written investment policypast practices;
(xiii) amendcancel any debts or waive, terminate, modify, release or accelerate relinquish any material contract rights or agreement to which RISCORP is a partyother rights of substantial value other than in the ordinary course of business, consistent with past practices;
(xiiij) modifyauthorize, amend recommend, propose or terminate RISCORP's written investment policy;
(xiv) modify or accelerate the provisions of or terminate or amend any contract with The Phoenix Management Company, Ltd. or Xxxxxxx Xxxxxxx and Company, P.A., provided that RISCORP shall be authorized to take any action necessary to (A)(1) accelerate, effective as of the Closing, the vesting of the Class A Common Stock issued to The Phoenix Management Company, Ltd. pursuant to that certain Restricted Stock Award Agreement by and between The Phoenix Management Company, Ltd. and RISCORP and (2) amend the provisions of the Management Agreement of RISCORP, Inc. dated February 18, 1998 (the "Management Agreement") to reduce the fees paid to The Phoenix Management Company, Ltd. to such amount RISCORP deems appropriate after notice to Acquiror or (B) terminate the Management Agreement.
(xv) enter into any or announce an intention to authorize, recommend, propose or enter into an agreement to take any of the actions described in Section 5.2(b) principle or elsewhere in this Section 5.2(c).
(d) RISCORP shall keep Acquiror and Guarantor informed a definitive agreement with respect to the status of any litigation to which RISCORP, any RISCORP Subsidiary, or any officer, director or employee of RISCORP or any RISCORP Subsidiary is a party (whether or not commenced prior to the date of this Agreement) and shall not settle or compromise any such litigation in which RISCORP or any RISCORP Subsidiary is a defendant without the consent of Acquiror; provided that RISCORP may enter into any settlement agreement for any litigation to which any RISCORP Subsidiary is a defendant in which a determination has been made by RISCORP that neither it nor or any RISCORP Subsidiary has any reasonable basis to assert claims for, cross claims for, or similar rights to recovery if the amount paid for such settlement by RISCORP and the RISCORP Subsidiaries does not exceed $100,000 for any such individual litigation claim and does not exceed $250,000 in the aggregate for all such litigation claims. Further, RISCORP covenants and agrees that it will consult with representatives of Acquiror on an on-going basis with respect to the direction and material decisions affecting the disposition of all litigation in which RISCORP or any RISCORP Subsidiary is either a plaintiff or asserting a cross or other similar form of claim and shall not take any action to settle or compromise and/or resolve any such claim without first giving Acquiror's representatives adequate opportunity to consider the merits of any such settlement, compromise or resolution and an opportunity to advise RISCORP of Acquiror's views with respect to the merits of any such proposed settlement, compromise and/or resolution.
(e) Except as provided by this Section 5.2(e) RISCORP shall not, nor shall it permit any RISCORP Subsidiary to, nor shall it authorize or permit any officer, director or employee of, or any investment banker, attorney or other advisor or representative or agent of, RISCORP or any RISCORP Subsidiary to, directly or indirectly, (i) solicit, initiate or encourage the submission of any bona fide proposal with respect to a merger, consolidation, share exchange liquidation, dissolution, or similar transaction involving RISCORP business combination, any acquisition of a material amount of property or assets or securities, or any RISCORP disposition of a material amount of property or assets or securities, except as contemplated by this Agreement;
(k) make any material change with respect to accounting policies or procedures in effect as of December 28, 1997 except as may be required by generally accepted accounting principles;
(l) 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 course of business, consistent with past practices, of liabilities reflected or reserved against in the FRI Financial Statements or incurred in the ordinary course of business consistent with past practices since the date hereof;
(m) effectuate (i) a "plant closing" (as defined in the WARN Act) affecting any site of employment or one or more facilities or operating units within any site of employment of FRI or any FRI Subsidiary, or any purchase of all or substantially all of the assets of RISCORP other than the transactions contemplated hereby (an "Acquisition Proposal"); (ii) furnish a "mass layoff" (as defined in the WARN Act) affecting any site of employment of FRI or any FRI Subsidiary, without complying fully with any and all notice obligations (and/or pay and benefits in lieu of notice) under the WARN Act or any similar obligation under applicable state or local law requiring notice (and/or pay and benefits in lieu of notice) to any person any information with respect to, employees in the event of a plant closing or take any other action to facilitate any inquiries or layoff. For purposes of the making of any proposal that constitutes, or may reasonably be expected to lead to, any Acquisition Proposal; (iii) withdraw, qualify or modify, or propose publicly to withdraw, qualify or modify, in a manner adverse to AcquirorWARN Act and this Agreement, the approval or recommendation of RISCORP's Board of Directors or any committee thereof Effective Time is and shall be the same as the "effective date" within the meaning of the Merger or this Agreement; (iv) approve or recommend, or propose publicly to approve or recommend, any transaction involving an Acquisition Proposal from a third party (an "Alternative Transaction"); or (v) cause RISCORP to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Alternative Transaction (each an "Acquisition Agreement"). Notwithstanding the foregoing, nothing herein shall prevent RISCORP's Board of Directors from furnishing non-public information to or entering into discussions or negotiations with any person or entity in connection with an unsolicited bona fide Alternative Transaction or recommending such an unsolicited bona fide Alternative Transaction to the stockholders of RISCORP, if and only to the extent that, RISCORP's Board of Directors determines in good faith (after receiving advice from outside counsel as to its fiduciary duties to RISCORP's stockholders under applicable law) that it has received a Superior Proposal (as hereinafter defined). If, in accordance with the immediately preceding sentence, RISCORP's Board of Directors believes it has received a Superior Proposal, it may inform RISCORP's stockholders that it no longer believes that the Merger is advisable and no longer recommends approval of the Merger (a "Subsequent Determination") and may enter into an Acquisition Agreement with respect to a Superior Proposal, but only at a time that is after the third business day following Acquiror's receipt of written notice advising Acquiror that RISCORP's Board of Directors has received a Superior Proposal. Such written notice shall specify the material terms and conditions of such Superior Proposal, identify the person making such Superior Proposal and state that RISCORP's Board of Directors intends to make a Subsequent Determination. During such three business day period, RISCORP shall provide an opportunity for Acquiror to propose such adjustments to the terms and conditions of this Agreement as would enable RISCORP to proceed with its recommendation to its stockholders without a Subsequent Determination; provided, however, that the acceptance of any such proposed adjustment shall be at the sole discretion of RISCORP's Board of Directors, exercised in good faith, and this Agreement shall be amended to reflect any such accepted adjustments; provided, further, however, that any such proposed adjustment, the sole effect of which is to (i) increaseWARN Act;
Appears in 1 contract
Conduct of Business Pending Merger. (a) RISCORP agrees that from From the date hereof to until the Effective Time, except as expressly contemplated or permitted by this Agreement Agreement, as required by applicable law or to regulation (including the extent Pandemic Measures), or as expressly set forth in its Disclosure Letter, without the prior written consent of the other party (which consent will not be unreasonably conditioned, withheld or delayed), BRBS and FVCB each agrees that Acquiror shall otherwise consent in writingit will not, RISCORP and the RISCORP will cause each of its Subsidiaries will operate their businesses only not to:
(a) Conduct its business other than in the ordinary coursecourse in all material respects or fail to use its reasonable best efforts to maintain and preserve intact its business organization, andmaterial assets, consistent rights and properties and preserve its relationships with its customers, employees, Regulatory Agencies and other entities with which it has advantageous business practices since April 1, 1998relationships.
(b) RISCORP agrees Take any action that from would adversely affect or delay the ability of either party (i) to obtain any necessary approvals, consents or waivers of any Regulatory Agency or Governmental Authority or third party required for the transactions contemplated hereby, (ii) to perform its covenants and agreements under this Agreement or (iii) to consummate the transactions contemplated hereby on a timely basis.
(c) Amend, modify or repeal its Organizational Documents (except as provided herein for BRBS and Blue Ridge Bank).
(d) Other than pursuant to (i) stock options, restricted stock awards and restricted stock unit awards outstanding as of the date hereof under the BRBS Stock Plans or FVCB Stock Plans or (ii) as expressly set forth in Section 4.1(d) of its Disclosure Letter: (A) issue, sell or otherwise permit to become outstanding, or authorize the creation of, any additional shares of capital stock or any Rights with respect thereto; (B) enter into any agreement with respect to the Effective Timeforegoing; or (C) issue or grant any stock options, restricted stock, stock appreciation rights, restricted stock units or similar stock-based rights.
(e) Enter into or amend or renew any employment, consulting, severance, change in control, bonus, salary continuation or similar agreements or arrangements with any of its directors, officers or employees, or grant any salary or wage increase or increase any employee benefit (including by making incentive or bonus payments), except as otherwise consented to by Acquiror in writing or as permitted, required or contemplated by this Agreement, for: (i) neither it nor any RISCORP Subsidiary will change any provision of its Certificate of Incorporation normal individual increases in salary or Bylaws or similar governing documents (subject wages to compliance with Section 5.11 hereto, except such changes as are necessary to effectuate the surrender and/or sale of RISCORP's or RISCORP Subsidiaries' certificate of authority or licenses to transact the business of insurance employees in the state where such certificates ordinary course of authority business consistent with past practice (other than with respect to executive officers of it or licenses are currently heldits Subsidiaries); (ii) neither the payment of discretionary spot bonuses of $25,000 or less to an employee (other than an executive officer of it nor any RISCORP Subsidiary will not make, declare or pay any dividend except for any dividend declared or paid by any RISCORP Subsidiary to RISCORP or any RISCORP Subsidiaryits Subsidiaries); and (iii) neither in the case of BRBS, after consultation with FVCB as required by Section 4.3, entering into employment agreements in order to recruit new senior level employees in a manner that is consistent in all material respects with past practice.
(f) Enter into, establish, adopt, amend, terminate or make any contributions to (except as may be required by applicable law or the terms of any Benefit Plan) any pension, retirement, stock option, stock purchase, stock bonus, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive, welfare contract, plan or arrangement, or any trust agreement related thereto, in respect of any directors, officers or employees, including without limitation taking any action that accelerates, or causes the lapsing of restrictions with respect to, the vesting or exercise of any benefits payable thereunder, except as otherwise specifically permitted in this Agreement.
(g) Exchange, cancel, borrow from, surrender, or increase or decrease the death benefit provided under, or otherwise amend or terminate, any existing bank or corporate owned life insurance covering any current or former employee of it nor or any RISCORP Subsidiary will of its Subsidiaries, other than any increase in the death benefit in the ordinary course of business consistent with past practice, or any such change that is required by law.
(h) Incur any material obligation, indebtedness or liability (whether absolute or contingent, excluding suits instituted against it), make any pledge or encumber any of its material assets, or dispose of any of its material assets in any other manner, except in the ordinary course of its business and substantially on arm’s length terms, except as otherwise specifically permitted in this Agreement.
(i) Make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of its capital stock or directly or indirectly selladjust, issuesplit, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its outstanding capital stock, change the number of shares of its authorized or issued capital stock or issue or grant any option, warrant, call, commitment, subscription, right to purchase or agreement of any character relating to its authorized or issued capital stock or any securities convertible into shares of such stock.
(c) RISCORP agrees that, except to the extent other than (i) consented to by Acquiror as provided for in writing or Section 4.2, (ii) permitted, required or contemplated by this Agreement, from the date hereof it will not, nor will it permit any RISCORP Subsidiary to:
(i) enter into any agreement representing an obligation for indebtedness for borrowed money or increase the principal amount of indebtedness under any existing agreement or assume, guarantee, endorse or otherwise become responsible for the obligations of any other individual, firm or corporation;
(ii) sell, mortgage, encumber or pledge any of its properties or assets;
(iii) take any action to (A) amend or terminate any RISCORP Employee Plan, (B) increase the compensation of any of its directors, executive officers or employees, (C) adopt any other plan, program, arrangement or practice providing new or increased benefits or compensation to its employees, or (D) modify, accelerate the benefits under, amend or terminate any agreement with any of RISCORP's agents, employees, officers or directors, except as set forth in Section 5.2(c)(xiv);4.1(i) of its Disclosure Letter and (iii) dividends from its wholly-owned Subsidiaries to it or another of its wholly-owned Subsidiaries.
(ivj) Make any material investment in or acquisition of (either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets) any other person other than its wholly-owned Subsidiaries, except (i) purchases and sales of investment securities subject to Section 4.1(s), and (ii) by way of foreclosures or acquisitions of control in a fiduciary or similar capacity or in satisfaction of debts previously contracted in good faith, in each case in the ordinary course of business.
(k) Implement or adopt any change in its Tax or financial accounting principles, practices or methods, including reserving methodologies, other than as may be required by GAAP, regulatory accounting guidelines, or as recommended by the outside auditor to the party.
(l) Make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, file any amended material Tax Return, enter into any negotiation closing agreement with respect to Taxes, or adopt settle any collective bargaining agreement;Tax claim, audit, assessment or dispute or surrender any right to claim a refund of material Taxes.
(vm) make Fail to materially follow its existing policies or practices with respect to managing exposure to interest rate and other risk, or fail to use commercially reasonable means to avoid any significant change material increase in any accounting methods or systems of internal accounting controls, except as may be appropriate its aggregate exposure to conform to changes in statutory accounting rules or GAAP;interest rate risk.
(vin) payNotwithstanding anything herein to the contrary, loan or advance any amount to(i) knowingly take, or sell, transfer or lease any properties or assets (real, personal or mixed, tangible or intangible) to, or enter into any material agreement or arrangement withknowingly omit to take, any (A) of its officers or directors, (B) "affiliate" or "associate" of any of its officers or directors (as such terms are defined in Rule 405 promulgated under the Securities Act) or (C) third party;
(vii) make any tax election or settle or compromise tax liability action that would reasonably be expected to have prevent the Merger from qualifying as a Material Adverse Effect reorganization within the meaning of Section 368(a) of the Code or (ii) knowingly take, or knowingly omit to take, any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article 6 not being satisfied on RISCORP;a timely basis.
(viiio) split, combineEnter into any material new line of business, or reclassify change its lending, investment, underwriting, risk and asset liability management and other banking and operating policies that are material to it and its Subsidiaries, taken as a whole.
(p) (i) Make, renew, restructure or otherwise modify any Loan that would result in the aggregate amount of the total lending relationship to any one borrower and its affiliates to exceed $20,000,000 or, if the total lending relationship to any one borrower and its affiliates is in excess of $20,000,000 as of the date of this Agreement, to make, renew, restructure or otherwise modify any Loan for such borrower and its affiliates; (ii) except in the ordinary course of its business, take any action that would result in any discretionary release of collateral or guarantees of any Loans; (iii) make, renew, restructure or acquire any loan participation exceeding $20,000,000; (iv) make, renew, restructure or otherwise modify any Loan that exceeds its internal lending limits such that the Loan would require approval by its loan committee, credit policy committee or similar committee; or (v) enter into any Loan securitization or create any special purpose funding entity. Notwithstanding the foregoing, if the other party does not respond to a request for consent pursuant to this Section 4.1(p) within three (3) business days of having received such request together with reasonable information regarding the Loan, such non-response shall be deemed to constitute consent.
(q) (i) Enter into or extend any material agreement, or lease or license relating to real property, personal property, data security or cybersecurity, data processing, electronic banking, mobile banking or bankcard functions; (ii) purchase or otherwise acquire any investment securities or enter into any Derivative Contract other than as provided in each party’s currently existing investment policies and in accordance with prudent investment practices in the ordinary course of business; or (iii) make any capital stock expenditures in the aggregate in excess of RISCORP $500,000, other than expenditures necessary to maintain existing assets in good repair.
(r) Except for debt workouts in the ordinary course of business, settle any claim, suit, action or proceeding (i) in an amount and for consideration in excess of $200,000 individually or $500,000 in the aggregate (in each case, net of any insurance proceeds or indemnity, contribution or similar payments received by it or any RISCORP Subsidiary;Subsidiary in respect thereof), or (ii) that would impose any material restriction on, or create any adverse precedent that would be material to, the business of it or its Subsidiaries or the Continuing Corporation or its Subsidiaries.
(ixs) acquire Materially restructure or agree to acquire by merging materially change its investment securities or consolidating with derivatives portfolio or by purchasing a substantial portion of the stock its interest rate exposure, through purchases, sales or assets ofotherwise, or by the manner in which the portfolio is classified or reported or purchase any other mannerinvestment security rated below investment grade, any in all cases except as provided in its currently existing investment policies and in accordance with prudent investment practices in the ordinary course of business or any corporation, partnership, joint venture, association or other business organization or division thereof;consistent with past practice.
(xt) adopt Adopt or enter into a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a liquidation, dissolution, restructuring, recapitalization, merger, consolidation, restructuring, recapitalization or reorganization;
(xi) invest assets of RISCORP or any RISCORP Subsidiary in any security, instrument, share exchange or other investment other than in the ordinary course of business at then prevailing market rates consistent with RISCORP's written investment policy;
(xii) amend, terminate, modify, or accelerate any material contract or agreement to which RISCORP is a party;
(xiii) modify, amend or terminate RISCORP's written investment policy;
(xiv) modify or accelerate the provisions of or terminate or amend any contract with The Phoenix Management Company, Ltd. or Xxxxxxx Xxxxxxx and Company, P.A., provided that RISCORP shall be authorized to take any action necessary to (A)(1) accelerate, effective as of the Closing, the vesting of the Class A Common Stock issued to The Phoenix Management Company, Ltd. pursuant to that certain Restricted Stock Award Agreement by and between The Phoenix Management Company, Ltd. and RISCORP and (2) amend the provisions of the Management Agreement of RISCORP, Inc. dated February 18, 1998 (the "Management Agreement") to reduce the fees paid to The Phoenix Management Company, Ltd. to such amount RISCORP deems appropriate after notice to Acquiror or (B) terminate the Management Agreementreorganization.
(xvu) enter into Take any agreement other action that would make any representation or warranty in Article 3 hereof untrue.
(v) Agree to take any of the actions described in Section 5.2(b) or elsewhere in this Section 5.2(c).
(d) RISCORP shall keep Acquiror and Guarantor informed with respect to the status of any litigation to which RISCORP, any RISCORP Subsidiary, or any officer, director or employee of RISCORP or any RISCORP Subsidiary is a party (whether or not commenced prior to the date of this Agreement) and shall not settle or compromise any such litigation in which RISCORP or any RISCORP Subsidiary is a defendant without the consent of Acquiror; provided that RISCORP may enter into any settlement agreement for any litigation to which any RISCORP Subsidiary is a defendant in which a determination has been made by RISCORP that neither it nor or any RISCORP Subsidiary has any reasonable basis to assert claims for, cross claims for, or similar rights to recovery if the amount paid for such settlement by RISCORP and the RISCORP Subsidiaries does not exceed $100,000 for any such individual litigation claim and does not exceed $250,000 in the aggregate for all such litigation claims. Further, RISCORP covenants and agrees that it will consult with representatives of Acquiror on an on-going basis with respect to the direction and material decisions affecting the disposition of all litigation in which RISCORP or any RISCORP Subsidiary is either a plaintiff or asserting a cross or other similar form of claim and shall not take any action to settle or compromise and/or resolve any such claim without first giving Acquiror's representatives adequate opportunity to consider the merits of any such settlement, compromise or resolution and an opportunity to advise RISCORP of Acquiror's views with respect to the merits of any such proposed settlement, compromise and/or resolution.
(e) Except as provided prohibited by this Section 5.2(e) RISCORP shall not, nor shall it permit any RISCORP Subsidiary to, nor shall it authorize or permit any officer, director or employee of, or any investment banker, attorney or other advisor or representative or agent of, RISCORP or any RISCORP Subsidiary to, directly or indirectly, (i) solicit, initiate or encourage the submission of any bona fide proposal with respect to a merger, consolidation, share exchange or similar transaction involving RISCORP or any RISCORP Subsidiary, or any purchase of all or substantially all of the assets of RISCORP other than the transactions contemplated hereby (an "Acquisition Proposal"); (ii) furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Acquisition Proposal; (iii) withdraw, qualify or modify, or propose publicly to withdraw, qualify or modify, in a manner adverse to Acquiror, the approval or recommendation of RISCORP's Board of Directors or any committee thereof of the Merger or this Agreement; (iv) approve or recommend, or propose publicly to approve or recommend, any transaction involving an Acquisition Proposal from a third party (an "Alternative Transaction"); or (v) cause RISCORP to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Alternative Transaction (each an "Acquisition Agreement"). Notwithstanding the foregoing, nothing herein shall prevent RISCORP's Board of Directors from furnishing non-public information to or entering into discussions or negotiations with any person or entity in connection with an unsolicited bona fide Alternative Transaction or recommending such an unsolicited bona fide Alternative Transaction to the stockholders of RISCORP, if and only to the extent that, RISCORP's Board of Directors determines in good faith (after receiving advice from outside counsel as to its fiduciary duties to RISCORP's stockholders under applicable law) that it has received a Superior Proposal (as hereinafter defined). If, in accordance with the immediately preceding sentence, RISCORP's Board of Directors believes it has received a Superior Proposal, it may inform RISCORP's stockholders that it no longer believes that the Merger is advisable and no longer recommends approval of the Merger (a "Subsequent Determination") and may enter into an Acquisition Agreement with respect to a Superior Proposal, but only at a time that is after the third business day following Acquiror's receipt of written notice advising Acquiror that RISCORP's Board of Directors has received a Superior Proposal. Such written notice shall specify the material terms and conditions of such Superior Proposal, identify the person making such Superior Proposal and state that RISCORP's Board of Directors intends to make a Subsequent Determination. During such three business day period, RISCORP shall provide an opportunity for Acquiror to propose such adjustments to the terms and conditions of this Agreement as would enable RISCORP to proceed with its recommendation to its stockholders without a Subsequent Determination; provided, however, that the acceptance of any such proposed adjustment shall be at the sole discretion of RISCORP's Board of Directors, exercised in good faith, and this Agreement shall be amended to reflect any such accepted adjustments; provided, further, however, that any such proposed adjustment, the sole effect of which is to (i) increase4.1.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization (Blue Ridge Bankshares, Inc.)
Conduct of Business Pending Merger. (a) RISCORP agrees that Except for Permitted Transactions, as otherwise specifically provided in this Agreement or in the other Documents or as otherwise consented to in writing by FRI, which consent shall not be unreasonably withheld, from the date hereof of this Agreement to the Effective Time, except as contemplated by this Agreement or to KKR will, and will cause each of the extent that Acquiror shall otherwise consent in writingKKR Subsidiaries to, RISCORP and the RISCORP Subsidiaries will operate their businesses conduct its operations only in the ordinary course, and, and usual course of business and consistent with past practices and will, and will cause each of the KKR Subsidiaries to, preserve intact its present business practices since April 1organization, 1998.
(b) RISCORP agrees that take commercially reasonable efforts to keep available the services of its present officers, employees and consultants and preserve its present relationships with licensors, licensees, customers, suppliers, employees, labor organizations and others with whom they have a significant business relationship. Without limiting the generality of the foregoing, and except for Permitted Transactions, as otherwise specifically provided in this Agreement or in the other Documents, or as set forth on Schedule 7.3, KKR will not, and will not permit any KKR Subsidiary to, directly or indirectly, from the date hereof of this Agreement to the Effective Time, without the prior written consent of FRI, which shall not be unreasonably withheld:
(a) adopt any amendment to or otherwise change the Charter Documents of KKR or any KKR Subsidiary;
(b) authorize for issuance, sale, pledge, disposition or encumbrance, or issue, sell, pledge, dispose of or encumber (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase, convertible securities or otherwise), any capital stock of any class or any other securities of, or any other ownership interest in, KKR or any KKR Subsidiary (except as otherwise consented to by Acquiror in writing or as permitted, required or contemplated by this Agreement, for (1) the issuance of KKR Common Shares (i) neither it nor any RISCORP Subsidiary will change any provision upon the exercise of its Certificate of Incorporation or Bylaws or similar governing documents (subject to compliance with Section 5.11 heretooptions and warrants outstanding on the date hereof, except such changes as are necessary to effectuate the surrender and/or sale of RISCORP's or RISCORP Subsidiaries' certificate of authority or licenses to transact the business of insurance in the state where such certificates of authority or licenses are currently held); (ii) neither it nor upon conversion or exchange of the KKR Preferred Shares outstanding on the date hereof or issuable upon the exercise of warrants outstanding as of the date hereof, or (iii) the issuance of KKR Common Shares in payment of accrued and unpaid dividends on the KKR Preferred Shares in accordance with the terms thereof and (2) as contemplated by Sections 7.1 and 7.2 hereof), or amend any RISCORP Subsidiary will not makeof the terms of any such securities or agreements outstanding on the date hereof;
(c) reclassify, declare combine, split or subdivide any shares of its capital stock, declare, set aside or pay any dividend except for any dividend declared or paid by any RISCORP Subsidiary to RISCORP other distribution (whether in cash, securities or property or any RISCORP Subsidiary; and combination thereof) in respect of any class or series of its capital stock (iiiother than regularly scheduled dividends on the KKR Preferred Shares paid in cash in accordance with the terms thereof);
(d) neither it nor any RISCORP Subsidiary will make any distribution redeem, purchase or directly otherwise acquire, or indirectly sell, issue, propose or offer to redeem, purchase or otherwise acquire, any shares outstanding KKR Shares or other securities of its outstanding capital stockKKR or the KKR Subsidiaries;
(e) organize any new Subsidiary, change the number of shares of its authorized or issued acquire any capital stock or issue or grant any option, warrant, call, commitment, subscription, right to purchase or agreement equity securities of any character relating to its authorized Person or issued capital stock acquire any equity or ownership interest (financial or otherwise) in any securities convertible into shares of such stock.business;
(cf) RISCORP agrees that, except to the extent (i) consented to by Acquiror in writing incur, assume or (ii) permittedprepay any material liability, required or contemplated by this Agreementincluding, from the date hereof it will notwithout limitation, nor will it permit any RISCORP Subsidiary to:
(i) enter into any agreement representing an obligation for indebtedness for borrowed money or increase except in the principal amount ordinary course of indebtedness under any existing agreement or business and consistent with past practice, and in no event in excess of $50,000, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, 60 contingently or otherwise) for the obligations of any other individualthird party, firm (iii) make any loans, advances or corporation;
capital contributions to, or investments in, any third party, (iiiv) sell, mortgage, encumber mortgage or pledge any of its material properties or assets;
(iii) take any action to (A) amend or terminate any RISCORP Employee Plan, (B) increase the compensation of any of its directors, executive officers or employees, (C) adopt any other plan, program, arrangement or practice providing new or increased benefits or compensation to its employees, or (D) modify, accelerate the benefits under, amend or terminate any agreement with any of RISCORP's agents, employees, officers or directors, except as set forth in Section 5.2(c)(xiv);
(iv) enter into any negotiation with respect to or adopt any collective bargaining agreement;
(v) make any significant change in any accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in statutory accounting rules or GAAP;
(vi) pay, loan or advance any amount to, or sell, transfer or lease any properties or assets (real, personal or mixed, tangible or intangible) to, or enter into create any material agreement or arrangement withLien thereupon other than Permitted Liens, any (A) of its officers or directors, (B) "affiliate" or "associate" of any of its officers or directors (as such terms are defined in Rule 405 promulgated under the Securities Act) or (Cv) third partyauthorize any capital expenditures not in KKR's capital budget on the date hereof which, individually or in the aggregate, are in excess of $50,000;
(viig) make license or otherwise transfer, dispose of, permit to lapse or otherwise fail to preserve any tax election Intellectual Property of KKR or settle any KKR Subsidiary, or compromise tax liability that dispose of or disclose to any person any trade secret, formula, process or know-how not theretofore a matter of public knowledge, except where such disposal or disclosure would not, individually or in the aggregate, be reasonably be expected to have a Material Adverse Effect on RISCORP;KKR.
(viiih) splitenter into or amend any material agreement, combinecontract, lease, commitment or reclassify any capital stock of RISCORP or any RISCORP Subsidiary;
(ix) acquire or agree to acquire by merging or consolidating with or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof;
(x) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization;
(xi) invest assets of RISCORP or any RISCORP Subsidiary in any security, instrument, or other investment transaction other than in the ordinary course of business at then prevailing market rates business, consistent with RISCORP's written investment policypast practices;
(xiii) amendcancel any debts or waive, terminate, modify, release or accelerate relinquish any material contract rights or agreement to which RISCORP is a partyother rights of substantial value other than in the ordinary course of business, consistent with past practices;
(xiiij) modifyexcept in accordance with Sections 7.1, amend 7.4 and 10.1(e), authorize, recommend, propose or terminate RISCORP's written investment policy;
(xiv) modify or accelerate the provisions of or terminate or amend any contract with The Phoenix Management Company, Ltd. or Xxxxxxx Xxxxxxx and Company, P.A., provided that RISCORP shall be authorized to take any action necessary to (A)(1) accelerate, effective as of the Closing, the vesting of the Class A Common Stock issued to The Phoenix Management Company, Ltd. pursuant to that certain Restricted Stock Award Agreement by and between The Phoenix Management Company, Ltd. and RISCORP and (2) amend the provisions of the Management Agreement of RISCORP, Inc. dated February 18, 1998 (the "Management Agreement") to reduce the fees paid to The Phoenix Management Company, Ltd. to such amount RISCORP deems appropriate after notice to Acquiror or (B) terminate the Management Agreement.
(xv) enter into any or announce an intention to authorize, recommend, propose or enter into an agreement to take any of the actions described in Section 5.2(b) principle or elsewhere in this Section 5.2(c).
(d) RISCORP shall keep Acquiror and Guarantor informed a definitive agreement with respect to the status of any litigation to which RISCORP, any RISCORP Subsidiary, or any officer, director or employee of RISCORP or any RISCORP Subsidiary is a party (whether or not commenced prior to the date of this Agreement) and shall not settle or compromise any such litigation in which RISCORP or any RISCORP Subsidiary is a defendant without the consent of Acquiror; provided that RISCORP may enter into any settlement agreement for any litigation to which any RISCORP Subsidiary is a defendant in which a determination has been made by RISCORP that neither it nor or any RISCORP Subsidiary has any reasonable basis to assert claims for, cross claims for, or similar rights to recovery if the amount paid for such settlement by RISCORP and the RISCORP Subsidiaries does not exceed $100,000 for any such individual litigation claim and does not exceed $250,000 in the aggregate for all such litigation claims. Further, RISCORP covenants and agrees that it will consult with representatives of Acquiror on an on-going basis with respect to the direction and material decisions affecting the disposition of all litigation in which RISCORP or any RISCORP Subsidiary is either a plaintiff or asserting a cross or other similar form of claim and shall not take any action to settle or compromise and/or resolve any such claim without first giving Acquiror's representatives adequate opportunity to consider the merits of any such settlement, compromise or resolution and an opportunity to advise RISCORP of Acquiror's views with respect to the merits of any such proposed settlement, compromise and/or resolution.
(e) Except as provided by this Section 5.2(e) RISCORP shall not, nor shall it permit any RISCORP Subsidiary to, nor shall it authorize or permit any officer, director or employee of, or any investment banker, attorney or other advisor or representative or agent of, RISCORP or any RISCORP Subsidiary to, directly or indirectly, (i) solicit, initiate or encourage the submission of any bona fide proposal with respect to a merger, consolidation, share exchange liquidation, acquisition of a material amount of property or similar transaction involving RISCORP assets or securities, or any RISCORP disposition of a material amount of property or assets or securities;
(k) make any material change with respect to accounting policies or procedures in effect as of December 31, 1997 except as may be required by generally accepted accounting principles;
(l) 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 course of business, consistent with past practices, of liabilities reflected or reserved against in the Financial Statements of KKR or incurred in the ordinary course of business, consistent with past practices since the date hereof;
(m) effectuate (i) a "plant closing" (as defined in the WARN Act) affecting any site of employment or one or more facilities or operating units within any site of employment of KKR or any KKR Subsidiary, or any purchase of all or substantially all of the assets of RISCORP other than the transactions contemplated hereby (an "Acquisition Proposal"); (ii) furnish a "mass layoff" (as defined in the WARN Act) affecting any site of employment of KKR or any KKR Subsidiary, without complying fully with any and all notice obligations (and/or pay and benefits in lieu of notice) under the WARN Act or any similar obligation under applicable state or local law requiring notice (and/or pay and benefits in lieu of notice) to any person any information with respect to, employees in the event of a plant closing or take any other action to facilitate any inquiries or layoff. For purposes of the making of any proposal that constitutes, or may reasonably be expected to lead to, any Acquisition Proposal; (iii) withdraw, qualify or modify, or propose publicly to withdraw, qualify or modify, in a manner adverse to AcquirorWARN Act and this Agreement, the approval or recommendation of RISCORP's Board of Directors or any committee thereof Effective Time is and shall be the same as the "effective date" within the meaning of the Merger or this Agreement; (iv) approve or recommend, or propose publicly to approve or recommend, any transaction involving an Acquisition Proposal from a third party (an "Alternative Transaction"); or (v) cause RISCORP to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Alternative Transaction (each an "Acquisition Agreement"). Notwithstanding the foregoing, nothing herein shall prevent RISCORP's Board of Directors from furnishing non-public information to or entering into discussions or negotiations with any person or entity in connection with an unsolicited bona fide Alternative Transaction or recommending such an unsolicited bona fide Alternative Transaction to the stockholders of RISCORP, if and only to the extent that, RISCORP's Board of Directors determines in good faith (after receiving advice from outside counsel as to its fiduciary duties to RISCORP's stockholders under applicable law) that it has received a Superior Proposal (as hereinafter defined). If, in accordance with the immediately preceding sentence, RISCORP's Board of Directors believes it has received a Superior Proposal, it may inform RISCORP's stockholders that it no longer believes that the Merger is advisable and no longer recommends approval of the Merger (a "Subsequent Determination") and may enter into an Acquisition Agreement with respect to a Superior Proposal, but only at a time that is after the third business day following Acquiror's receipt of written notice advising Acquiror that RISCORP's Board of Directors has received a Superior Proposal. Such written notice shall specify the material terms and conditions of such Superior Proposal, identify the person making such Superior Proposal and state that RISCORP's Board of Directors intends to make a Subsequent Determination. During such three business day period, RISCORP shall provide an opportunity for Acquiror to propose such adjustments to the terms and conditions of this Agreement as would enable RISCORP to proceed with its recommendation to its stockholders without a Subsequent Determination; provided, however, that the acceptance of any such proposed adjustment shall be at the sole discretion of RISCORP's Board of Directors, exercised in good faith, and this Agreement shall be amended to reflect any such accepted adjustments; provided, further, however, that any such proposed adjustment, the sole effect of which is to (i) increaseWARN Act;
Appears in 1 contract
Conduct of Business Pending Merger. (a) RISCORP agrees that Except as otherwise specifically provided in this Agreement, from the date hereof of this Agreement to the earlier of the Effective Time or termination hereof, the Company agrees to (i) conduct its operations only in the ordinary and usual course of business and consistent with past practices and (ii) use its reasonable best efforts to preserve intact its present business organization, keep available the services of its present officers, key employees and consultants and preserve its present relationships with licensors, licensees, customers, suppliers, key employees, labor organizations and others having business relationships with it. Without limiting the generality of the foregoing, and except as otherwise specifically provided in this Agreement, the Company will not, directly or indirectly, prior to the Effective Time, without the prior written consent of Parent:
(a) except to authorize sufficient capital stock as required to effect the transactions contemplated by this Agreement in connection with the Merger, propose or adopt any amendment to or otherwise change the extent that Acquiror shall otherwise consent in writing, RISCORP and the RISCORP Subsidiaries will operate their businesses only in the ordinary course, and, consistent with its business practices since April 1, 1998.Company Articles or Bylaws;
(b) RISCORP agrees that from authorize for issuance, sale, pledge, disposition or encumbrance, or issue, sell, pledge, dispose of or encumber (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase, convertible securities or otherwise), any capital stock of any class or any other securities of, or any other ownership interest in, the Company or any of its Subsidiaries (except for the issuance of shares of Company Common Stock upon conversion of Preferred Stock, upon exercise of Company Options or Company Warrants, in each case outstanding as of the date of this Agreement or amend any of the terms of any such securities or agreements outstanding on the date hereof except that the Company Warrants may be amended to provide for a cashless exercise procedure such that no more than 205,907 shares of Company Common Stock shall be issued upon conversion of the Effective TimeCompany Warrants); PROVIDED, except as otherwise consented to by Acquiror in writing HOWEVER, that holders of Company Options or as permittedCompany Warrants may exercise such Company Options or Company Warrants.
(c) reclassify, required combine, split or contemplated by this Agreement, (i) neither it nor subdivide any RISCORP Subsidiary will change any provision shares of its Certificate of Incorporation or Bylaws or similar governing documents (subject to compliance with Section 5.11 hereto, except such changes as are necessary to effectuate the surrender and/or sale of RISCORP's or RISCORP its Subsidiaries' certificate of authority or licenses to transact the business of insurance in the state where such certificates of authority or licenses are currently held); (ii) neither it nor any RISCORP Subsidiary will not makecapital stock, declare declare, set aside or pay any dividend except for or other distribution (whether in cash, securities or property or any combination thereof) in respect of any class or series of its capital stock, other than any dividend declared prior to the date hereof;
(d) redeem, purchase or paid by any RISCORP Subsidiary otherwise acquire, or propose or offer to RISCORP or any RISCORP Subsidiary; and (iii) neither it nor any RISCORP Subsidiary will make any distribution or directly or indirectly sell, issue, redeem, purchase or otherwise acquire, any shares outstanding Company Capital Stock, Company Warrants or Company Options or other securities of its outstanding capital stockthe Company except pursuant to the Company Benefit Plan;
(e) organize any new Subsidiary, change the number of shares of its authorized or issued acquire any capital stock or issue or grant any option, warrant, call, commitment, subscription, right to purchase or agreement equity securities of any character relating to its authorized corporation or issued capital stock acquire any equity or ownership interest (financial or otherwise) in any securities convertible into shares of such stock.business;
(cf) RISCORP agrees that, except to the extent (i) consented to by Acquiror in writing incur, assume or (ii) permittedprepay any material liability, required or contemplated by this Agreement, from the date hereof it will not, nor will it permit incur any RISCORP Subsidiary to:
(i) enter into any agreement representing an obligation for indebtedness for borrowed money or increase other than in accordance with the principal amount of indebtedness under any existing agreement or Company's current financing arrangements, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other individualthird party, firm (iii) make any loans, advances or corporation;
capital contributions to, or investments in, any third party, (iiiv) sell, mortgage, encumber mortgage or pledge any of its material properties or assets;
(iii) take any action to (A) amend or terminate any RISCORP Employee Plan, (B) increase the compensation of any of its directors, executive officers or employees, (C) adopt any other plan, program, arrangement or practice providing new or increased benefits or compensation to its employees, or (D) modify, accelerate the benefits under, amend or terminate any agreement with any of RISCORP's agents, employees, officers or directors, except as set forth in Section 5.2(c)(xiv);
(iv) enter into any negotiation with respect to or adopt any collective bargaining agreement;
(v) make any significant change in any accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in statutory accounting rules or GAAP;
(vi) pay, loan or advance any amount to, or sell, transfer or lease any properties or assets (real, personal or mixed, tangible or intangible, or create or suffer to exist any Lien thereupon, or (v) toauthorize any new capital expenditures for property, plant and equipment that, individually or in the aggregate, are in excess of $100,000 per fiscal quarter;
(g) make any change in the compensation payable or to become payable to any of its or any of its Subsidiaries' officers, directors, employees, agents or consultants (other than normal recurring salary adjustments in the ordinary course of business consistent with past practice) or to Persons providing management services, or enter into or amend, in any material respect, any existing employment, severance, consulting, termination or other agreement or arrangement with, employee benefit plan or make any (A) of its officers or directors, (B) "affiliate" or "associate" of loans to any of its officers officers, directors, employees, Affiliates, agents or directors consultants (as such terms are defined in Rule 405 promulgated under the Securities Actother than reasonable travel advances) or (C) third partymake any change in its existing borrowing or lending arrangements for or on behalf of any such Persons pursuant to an employee benefit plan or otherwise;
(viih) make license (except in the ordinary course of business consistent with past practice) or otherwise transfer or dispose of, any tax election material Intellectual Property Rights of the Company or settle or compromise tax liability that would reasonably be expected to have a Material Adverse Effect on RISCORP;
(viii) split, combineany of its Subsidiaries, or reclassify dispose of or disclose to any capital stock Person any trade secret, formula, process or know-how not theretofore a matter of RISCORP or any RISCORP Subsidiary;
(ix) acquire or agree to acquire by merging or consolidating with or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof;
(x) adopt a plan of complete or partial liquidation or resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization;
(xi) invest assets of RISCORP or any RISCORP Subsidiary in any security, instrument, or other investment public knowledge other than in the ordinary course of business at then prevailing market rates consistent with RISCORP's written investment policypast practice;
(xiii) amend, terminate, modify, or accelerate enter into any material contract or agreement to which RISCORP is a partytransaction other than in the ordinary course of business, consistent with past practices;
(xiiij) modifycancel any debts or waive, amend release or terminate RISCORP's written investment policyrelinquish any contract rights or other rights of substantial value other than in the ordinary course of business, consistent with past practices;
(xivk) modify except as explicitly contemplated by Section 6.2 hereof, authorize, recommend, propose or accelerate the provisions of or terminate or amend any contract with The Phoenix Management Company, Ltd. or Xxxxxxx Xxxxxxx and Company, P.A., provided that RISCORP shall be authorized to take any action necessary to (A)(1) accelerate, effective as of the Closing, the vesting of the Class A Common Stock issued to The Phoenix Management Company, Ltd. pursuant to that certain Restricted Stock Award Agreement by and between The Phoenix Management Company, Ltd. and RISCORP and (2) amend the provisions of the Management Agreement of RISCORP, Inc. dated February 18, 1998 (the "Management Agreement") to reduce the fees paid to The Phoenix Management Company, Ltd. to such amount RISCORP deems appropriate after notice to Acquiror or (B) terminate the Management Agreement.
(xv) enter into any agreement or announce an intention to take any of the actions described in Section 5.2(b) authorize, recommend, propose or elsewhere in this Section 5.2(c).
(d) RISCORP shall keep Acquiror and Guarantor informed with respect to the status of any litigation to which RISCORP, any RISCORP Subsidiary, or any officer, director or employee of RISCORP or any RISCORP Subsidiary is a party (whether or not commenced prior to the date of this Agreement) and shall not settle or compromise any such litigation in which RISCORP or any RISCORP Subsidiary is a defendant without the consent of Acquiror; provided that RISCORP may enter into any settlement agreement for any litigation to which any RISCORP Subsidiary is a defendant in which a determination has been made by RISCORP that neither it nor or any RISCORP Subsidiary has any reasonable basis to assert claims forterm sheet, cross claims for, or similar rights to recovery if the amount paid for such settlement by RISCORP and the RISCORP Subsidiaries does not exceed $100,000 for any such individual litigation claim and does not exceed $250,000 in the aggregate for all such litigation claims. Further, RISCORP covenants and agrees that it will consult with representatives of Acquiror on an on-going basis with respect to the direction and material decisions affecting the disposition of all litigation in which RISCORP or any RISCORP Subsidiary is either a plaintiff or asserting a cross or other similar form of claim and shall not take any action to settle or compromise and/or resolve any such claim without first giving Acquiror's representatives adequate opportunity to consider the merits of any such settlement, compromise or resolution and an opportunity to advise RISCORP of Acquiror's views with respect to the merits of any such proposed settlement, compromise and/or resolution.
(e) Except as provided by this Section 5.2(e) RISCORP shall not, nor shall it permit any RISCORP Subsidiary to, nor shall it authorize or permit any officer, director or employee of, or any investment banker, attorney or other advisor or representative or agent of, RISCORP or any RISCORP Subsidiary to, directly or indirectly, (i) solicit, initiate or encourage the submission of any bona fide proposal with respect to a merger, consolidation, share exchange or similar transaction involving RISCORP or any RISCORP Subsidiary, or any purchase of all or substantially all of the assets of RISCORP other than the transactions contemplated hereby (an "Acquisition Proposal"); (ii) furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Acquisition Proposal; (iii) withdraw, qualify or modify, or propose publicly to withdraw, qualify or modify, in a manner adverse to Acquiror, the approval or recommendation of RISCORP's Board of Directors or any committee thereof of the Merger or this Agreement; (iv) approve or recommend, or propose publicly to approve or recommend, any transaction involving an Acquisition Proposal from a third party (an "Alternative Transaction"); or (v) cause RISCORP to enter into any letter of intent, agreement in principle, acquisition principle or a definitive agreement or other similar agreement related to any Alternative Transaction (each an "Acquisition Agreement"). Notwithstanding the foregoing, nothing herein shall prevent RISCORP's Board of Directors from furnishing non-public information to or entering into discussions or negotiations with any person or entity in connection with an unsolicited bona fide Alternative Transaction or recommending such an unsolicited bona fide Alternative Transaction to the stockholders of RISCORP, if and only to the extent that, RISCORP's Board of Directors determines in good faith (after receiving advice from outside counsel as to its fiduciary duties to RISCORP's stockholders under applicable law) that it has received a Superior Proposal (as hereinafter defined). If, in accordance with the immediately preceding sentence, RISCORP's Board of Directors believes it has received a Superior Proposal, it may inform RISCORP's stockholders that it no longer believes that the Merger is advisable and no longer recommends approval of the Merger (a "Subsequent Determination") and may enter into an Acquisition Agreement with respect to any merger, consolidation, liquidation, dissolution, or business combination, any acquisition of a Superior Proposalmaterial amount of property or assets or securities, but only at or any disposition of a time that material amount of property or assets or securities;
(l) make any change with respect to accounting policies or procedures in effect as of the Company's fiscal year ended December 31, 1999;
(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 course of business, consistent with past practices, of liabilities reflected or reserved against in the Company's Financial Statements or incurred in the ordinary course of business consistent with past practices since the date thereof;
(n) take or commit or agree (in writing or otherwise) to take any of the foregoing actions, or fail to take any action, as a result of which a failure of the conditions set forth in Section 8.1 or 8.2 is after likely to occur; or
(o) make any election relating to Taxes, change any election relating to Taxes already made, adopt or change any accounting method relating to Taxes, enter into any closing agreement relating to Taxes, settle any claim or assessment relating to Taxes or consent to any claim or assessment relating to Taxes or any waiver of the third business day following Acquiror's receipt statute of written notice advising Acquiror that RISCORP's Board of Directors has received a Superior Proposal. Such written notice shall specify the material terms and conditions of such Superior Proposal, identify the person making such Superior Proposal and state that RISCORP's Board of Directors intends to make a Subsequent Determination. During such three business day period, RISCORP shall provide an opportunity limitations for Acquiror to propose such adjustments to the terms and conditions of this Agreement as would enable RISCORP to proceed with its recommendation to its stockholders without a Subsequent Determination; provided, however, that the acceptance of any such proposed adjustment shall be at the sole discretion of RISCORP's Board of Directors, exercised in good faith, and this Agreement shall be amended to reflect any such accepted adjustments; provided, further, however, that any such proposed adjustment, the sole effect of which is to (i) increaseclaim or assessment.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization and Merger (National Information Consortium)
Conduct of Business Pending Merger. (a) RISCORP agrees that from From the date hereof of this Agreement ---------------------------------- to the Effective Time, Company will and will cause the Company Subsidiaries to, except as expressly contemplated in Section 5.2 of the Company Disclosure Schedule and except as otherwise specifically consented to in writing by this Agreement or to the extent that Acquiror shall otherwise consent in writing, RISCORP and the RISCORP Subsidiaries will operate Merger Partner:
(a) Carry on their businesses only in the ordinary course, and, consistent with its business practices since April 1, 1998.
course in substantially the same manner as previously conducted (b) RISCORP agrees provided that from the date hereof at or prior to the Effective Time, except as otherwise consented Company shall have divested the assets described in Section 5.2 of the Company Disclosure Schedule hereto; provided that such divestiture results in no liability or expenses, including without limitation, any Tax liability, to by Acquiror in writing or as permittedMerger Partner, required or contemplated by this AgreementMedia Communications, (i) neither it nor any RISCORP Subsidiary will change any provision of its Certificate of Incorporation or Bylaws or similar governing documents (subject to compliance with Section 5.11 heretoSub, except such changes as are necessary to effectuate the surrender and/or sale of RISCORP's or RISCORP Subsidiaries' certificate of authority or licenses to transact the business of insurance in the state where such certificates of authority or licenses are currently held); (ii) neither it nor any RISCORP Subsidiary will not make, declare or pay any dividend except for any dividend declared or paid by any RISCORP Subsidiary to RISCORP Company or any RISCORP Company Subsidiary; and );
(iiib) neither it Neither change nor any RISCORP Subsidiary will make any distribution amend their respective articles of incorporation or directly or indirectly sell, issue, redeem, purchase or otherwise acquire, any shares of its outstanding capital stock, change the number of shares of its authorized or issued capital stock or issue or grant any option, warrant, call, commitment, subscription, right to purchase or agreement of any character relating to its authorized or issued capital stock or any securities convertible into shares of such stock.bylaws;
(c) RISCORP agrees that, except Other than pursuant to the extent (i) consented to by Acquiror in writing or (ii) permitted, required or contemplated by this Agreement, from exercise of employee stock options outstanding on the date hereof it will not, nor will it permit any RISCORP Subsidiary to:
(i) enter into any agreement representing an obligation for indebtedness for borrowed money or increase options granted after the principal amount of indebtedness under any existing agreement or assume, guarantee, endorse or otherwise become responsible for the obligations of any other individual, firm or corporation;
(ii) sell, mortgage, encumber or pledge any of its properties or assets;
(iii) take any action to (A) amend or terminate any RISCORP Employee Plan, (B) increase the compensation of any of its directors, executive officers or employees, (C) adopt any other plan, program, arrangement or practice providing new or increased benefits or compensation to its employees, or (D) modify, accelerate the benefits under, amend or terminate any agreement with any of RISCORP's agents, employees, officers or directors, except date hereof as set forth described in Section 5.2(c)(xiv);
(iv5.2(c) enter into any negotiation with respect of the Company Disclosure Schedule, not issue, sell or grant shares of capital stock, options, warrants or rights to purchase or adopt any collective bargaining agreement;
(v) make any significant change in any accounting methods or systems of internal accounting controls, except as may be appropriate to conform to changes in statutory accounting rules or GAAP;
(vi) pay, loan or advance any amount to, or sell, transfer or lease any properties or assets (real, personal or mixed, tangible or intangible) subscribe to, or enter into any material agreement arrangement or arrangement with, any (A) of its officers contract with respect to the issuance or directors, (B) "affiliate" or "associate" sale of any of its officers the capital stock of the Company or directors the Company Subsidiaries or rights or obligations convertible into or exchangeable for any shares of capital stock of the Company or the Company Subsidiaries and not make any changes (as such terms are defined by split-up, stock dividend, combination, reorganization or otherwise) in Rule 405 promulgated under the Securities Act) capital structure of Company or (C) third partythe Company Subsidiaries;
(viid) make any tax election or settle or compromise tax liability that would reasonably be expected Use their reasonable efforts to have a Material Adverse Effect on RISCORPpreserve intact, and for the benefit of Merger Partner, the employees, the corporate existence, goodwill and business organization of Company and the Company Subsidiaries;
(viiie) splitNot declare, combineset aside or pay any dividend or other distribution or payment (whether in cash, stock or property) in respect of shares of its capital stock owned by any person, other than in the ordinary course and consistent with past practices, but in any such case not to exceed an aggregate of $200,000 per fiscal quarter, or reclassify purchase, redeem or otherwise acquire any of its capital stock of RISCORP or any RISCORP other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(f) Enter into any new contracts or agreements, or modify or amend any existing contracts or agreements, except for (i) time sales agreements for cash at the Stations' prevailing rates with a term not to exceed twelve months; or (ii) contracts or agreements (other than employment agreements, as to which any new agreements or amendments shall require Merger Partner's consent) involving individually for any one contract or agreement amounts not in excess of $25,000, or, collectively for all such agreements or contracts, not in excess of $250,000;
(g) Not sell, assign, transfer or otherwise dispose of any assets, except (1) in connection with the acquisition of equivalent replacement property, or (2) pursuant to transactions not exceeding $50,000 in the aggregate;
(h) Not create or assume any Lien on any of their respective properties or assets whether now owned or hereafter acquired that will not be discharged on or prior to the Closing Date;
(i) Not take any action to institute any severance or termination pay practices with respect to any directors, officers or employees of Company or any Subsidiary or to increase the benefits payable under its severance or termination pay practices in effect on the date hereof and set forth in Section 3.11 of the Company Disclosure Schedule; will not increase the compensation payable, or to become payable, to employees except as required by existing written agreements disclosed in Section 3.10 of the Company Disclosure Schedule or increases in the ordinary course of business consistent with past practice not exceeding 5%, cumulatively, for any individual employee; will not amend any Company Employee Plan; will not adopt any pension benefit plan, welfare benefit plan, multiemployer plan, employee benefit plan, severance plan, benefit arrangements or similar plan or arrangement;
(j) Not enter into any transaction with any shareholder of Company, Affiliate of or immediate family members of such Shareholders other than such as will be completely discharged by the Closing Date without any cost or expense to Company, any Company Subsidiary or Merger Partner;
(k) Not pay or award or agree to pay or award any pension, retirement allowance or other incentive awards or other employee benefit not required by this Agreement or any of the Company Employee Plans to any current or former director, officer or employee of Company or any Company Subsidiary; will not enter into any collective bargaining agreement covering any employees, through negotiations or otherwise, or make any commitments or incur any liability to any labor organization with respect to any employees; will not renew, terminate, waive or amend, except as may be required by applicable law, any collective bargaining agreement; will not voluntarily recognize any union or other entity as the collective bargaining representative for any of the employees of Company or any Company Subsidiary;
(ixl) acquire or agree Maintain levels of inventory consistent with past practices and will continue to acquire by merging or consolidating make operating, promotional, marketing and capital expenditures in accordance with or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereofspending levels set forth in the budgets previously provided to Merger Partner;
(xm) adopt Operate the Stations in conformity in all material respects with the FCC Licenses and Communications Laws and will cause the FCC licenses to remain in full force and effect; will file in a plan timely manner all material reports, replies and submissions required to be filed with the FCC or any other governmental agency, department or body in respect of the Stations, and all such documents will be complete and correct in all material respects and copies of each such document filed between the date hereof and the Closing Date shall be furnished to Merger Partner's legal counsel promptly after its filing; will, within 20 days of the end of each calendar quarter between the date hereof and the Closing Date, furnish Merger Partner's legal counsel with a copy of all documents and reports that the Stations place or partial liquidation or resolutions providing are obligated to place in their files that are available for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganizationinspection by the public in accordance with FCC rules;
(xin) invest Maintain all material assets (or replacements thereof) of RISCORP or Company and any RISCORP Company Subsidiary in their present condition, ordinary wear and tear excepted, and will maintain the existing insurance policies (or comparable replacement policies) of Company and each Company Subsidiary;
(o) Broadcast the feature film and syndicated programming of the Stations in the usual manner consistent with past practices and no material change shall be made in the frequency or scheduling of such programming, except for immaterial changes made in the ordinary course of business consistent with past practices;
(p) Not cancel or compromise any security, instrument, material claim or other investment liability other than in the ordinary course of business at then prevailing market rates consistent with RISCORP's written investment policybusiness;
(xiiq) amend, terminate, modify, Not waive or accelerate release any rights having material contract or agreement value to which RISCORP is a partyCompany;
(xiiir) modifyMaintain Company's and each Company Subsidiary's books and records in accordance with past practices and will not revalue any of the Assets (whether tangible or intangible), amend or terminate RISCORP's written investment policychange any of its accounting records or practices, or change its depreciation or amortization policies or rates, as to all the foregoing, in any manner that could affect the Working Capital calculation called for by Section 1.5;
(xivs) modify Incur any additional indebtedness of any nature, including without limitation, any swaps, collars, caps, xxxxxx or accelerate other agreements relating to the provisions fixing of or terminate or amend interest rates on indebtedness, except for any contract with The Phoenix Management Companysuch incurrence in the ordinary course of business pursuant to the revolving credit facility under the Credit Agreement, Ltd. or Xxxxxxx Xxxxxxx as to which the Company shall give Merger Partner prompt notice of such borrowing and Company, P.A., provided that RISCORP such amounts shall be authorized repaid in full at Closing; will not guarantee any indebtedness of another Person; will not issue any additional Contingent Rights; will not make any loans, advances or capital contributions to, investments in, any other Person, other than to take Company or any action necessary to (A)(1) accelerate, effective as of the Closing, the vesting of the Class A Common Stock issued to The Phoenix Management Company, Ltd. pursuant to that certain Restricted Stock Award Agreement by and between The Phoenix Management Company, Ltd. and RISCORP and (2) amend the provisions of the Management Agreement of RISCORP, Inc. dated February 18, 1998 (the "Management Agreement") to reduce the fees paid to The Phoenix Management Company, Ltd. to such amount RISCORP deems appropriate after notice to Acquiror or (B) terminate the Management Agreement.Company Subsidiary;
(xvt) enter into Make any agreement to take any of the actions described in Section 5.2(b) material tax election or elsewhere in this Section 5.2(c).
(d) RISCORP shall keep Acquiror and Guarantor informed with respect to the status of any litigation to which RISCORP, any RISCORP Subsidiary, or any officer, director or employee of RISCORP or any RISCORP Subsidiary is a party (whether or not commenced prior to the date of this Agreement) and shall not settle or compromise any such litigation tax liability;
(u) Make payment of all license fees due and payable under film and programming agreements at or prior to the Adjustment Time;
(v) Continue to implement the plan referred to in which RISCORP Section 3.24 to address the Year 2000 Problem;
(w) Not to transfer record ownership of any Company Common Stock on the books of Company without prior written notice to Merger Partner;
(x) Not authorize any of, or commit or agree to take any of, the foregoing actions that Company has agreed not to take; and
(y) Notwithstanding anything in this Agreement to the contrary, if any amounts are received by Company or any RISCORP Company Subsidiary is a defendant without the consent of Acquiror; provided that RISCORP may enter into any settlement agreement for any litigation to which any RISCORP Subsidiary is a defendant in which a determination has been made by RISCORP that neither it nor at or any RISCORP Subsidiary has any reasonable basis to assert claims for, cross claims for, or similar rights to recovery if the amount paid for such settlement by RISCORP and the RISCORP Subsidiaries does not exceed $100,000 for any such individual litigation claim and does not exceed $250,000 in the aggregate for all such litigation claims. Further, RISCORP covenants and agrees that it will consult with representatives of Acquiror on an on-going basis with respect prior to the direction and material decisions affecting Effective Time in respect of the disposition Xxxxx Note or the cash surrender value of all litigation in which RISCORP or any RISCORP Subsidiary is either a plaintiff or asserting a cross or other similar form life insurance policies, such amounts shall be kept as cash on hand of claim the Company and shall not take be used or spent for any action to settle purposes, including, without limitation, paying any Company Indebtedness or compromise and/or resolve any such claim without first giving Acquiror's representatives adequate opportunity to consider the merits of any such settlementClosing Liabilities, compromise or resolution and an opportunity to advise RISCORP of Acquiror's views with respect to the merits of any such proposed settlementand, compromise and/or resolution.
(e) Except as provided by this Section 5.2(e) RISCORP shall not, nor shall it permit any RISCORP Subsidiary to, nor shall it authorize or permit any officer, director or employee of, or any investment banker, attorney or other advisor or representative or agent of, RISCORP or any RISCORP Subsidiary to, directly or indirectly, (i) solicit, initiate or encourage the submission of any bona fide proposal with respect to a merger, consolidation, share exchange or similar transaction involving RISCORP or any RISCORP Subsidiary, or any purchase of all or substantially all of the assets of RISCORP other than the transactions contemplated hereby (an "Acquisition Proposal"); (ii) furnish to any person any information with respect to, or take any other action to facilitate any inquiries or the making of any proposal that constitutes, or may reasonably be expected to lead to, any Acquisition Proposal; (iii) withdraw, qualify or modify, or propose publicly to withdraw, qualify or modify, in a manner adverse to Acquiror, the approval or recommendation of RISCORP's Board of Directors or any committee thereof of the Merger or this Agreement; (iv) approve or recommend, or propose publicly to approve or recommend, any transaction involving an Acquisition Proposal from a third party (an "Alternative Transaction"); or (v) cause RISCORP to enter into any letter of intent, agreement in principle, acquisition agreement or other similar agreement related to any Alternative Transaction (each an "Acquisition Agreement"). Notwithstanding the foregoing, nothing herein shall prevent RISCORP's Board of Directors from furnishing non-public information to or entering into discussions or negotiations with any person or entity in connection with an unsolicited bona fide Alternative Transaction or recommending such an unsolicited bona fide Alternative Transaction to the stockholders of RISCORP, if and only to the extent thatused or spent, RISCORP's Board such amounts shall not be included in the calculation of Directors determines in good faith (after receiving advice from outside counsel as to its fiduciary duties to RISCORP's stockholders under applicable law) that it has received a Superior Proposal (as hereinafter defined). If, in accordance with the immediately preceding sentence, RISCORP's Board of Directors believes it has received a Superior Proposal, it may inform RISCORP's stockholders that it no longer believes that the Merger is advisable and no longer recommends approval of the Merger (a "Subsequent Determination") and may enter into an Acquisition Agreement with respect to a Superior Proposal, but only at a time that is after the third business day following Acquiror's receipt of written notice advising Acquiror that RISCORP's Board of Directors has received a Superior Proposal. Such written notice shall specify the material terms and conditions of such Superior Proposal, identify the person making such Superior Proposal and state that RISCORP's Board of Directors intends to make a Subsequent Determination. During such three business day period, RISCORP shall provide an opportunity Current Assets" for Acquiror to propose such adjustments to the terms and conditions of this Agreement as would enable RISCORP to proceed with its recommendation to its stockholders without a Subsequent Determination; provided, however, that the acceptance of any such proposed adjustment shall be at the sole discretion of RISCORP's Board of Directors, exercised in good faith, and this Agreement shall be amended to reflect any such accepted adjustments; provided, further, however, that any such proposed adjustment, the sole effect of which is to (i) increasepurpose hereunder.
Appears in 1 contract
Samples: Merger Agreement (Media General Inc)
