Conduct of Business Pending the Closing. Prior to the Closing, (a) Sellers shall, and shall cause the Companies to (A) conduct the respective businesses of the Companies only in the ordinary course of business consistent with past practice, and (B) use commercially reasonable efforts to (1) preserve the present business operations, organization and goodwill of the Companies, and (2) preserve the present relationship with Persons having material business dealings with the Companies, and (C) make capital expenditures in accordance with its annual budget previously provided to Purchaser, provided that nothing in this Section 6.2(a) shall prevent the Companies from (x) paying dividends or other cash transfers or payments to or on behalf of any Seller or any of its Affiliates, or (y) repaying any Indebtedness. (b) Without limiting the generality of the foregoing except: (i) as set forth on Schedule 6.2 hereto, (ii) as expressly contemplated by the Seller Documents, (iii) as required by applicable Law, or (iv) with the prior written consent of Purchaser (not to be unreasonably withheld), Sellers shall not, and shall cause the Companies not to: (i) transfer, issue, sell or dispose of any shares of capital stock or other securities of any Company or grant options, warrants, calls or other rights to purchase or otherwise acquire shares of the capital stock or other securities of any Company; (ii) effect any recapitalization, reclassification, stock split or other change in the capitalization of any Company; (iii) enter into any new line of business, discontinue any line of business or amend the certificate of incorporation or by-laws (or comparable organizational documents) of any Company; (iv) except for (A) trade payables in the ordinary course of business, and (B) amounts that will be repaid at or prior to the Effective Time, incur or increase any Indebtedness (other than Indebtedness that will be paid off at or prior to Closing), or become the guarantor, surety, endorser or otherwise liable (whether directly, contingently or otherwise) for any debt, obligation or liability (contingent or otherwise) of any other Person (except for another Company); (v) subject any of the properties or assets (whether tangible or intangible) of any Company to any Lien (except for Permitted Exceptions) that will not be removed at or prior to Closing; (vi) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any properties, assets or equity interests in any Person, or sell, assign, transfer, convey, lease or otherwise dispose of any of the properties or assets (except for the purchase of raw materials or the sale of inventory for fair consideration in the ordinary course of business consistent with past practice) of any Company for which the aggregate consideration paid or payable is in excess of $1,000,000; (vii) (A) grant any material increase in the compensation of officers and directors of any Company, or make any general uniform increase in the compensation of Current Employees of the Companies, except as required by Contracts or pursuant to and consistent with existing plans or programs that have been disclosed to Purchaser, (B) grant any material bonus, benefit or other direct or indirect compensation to any employee, director or consultant of any Company, except as required by Contracts that have been disclosed to Purchaser, pursuant to and consistent with existing plans or programs, (C) enter into or amend any material Company Plan or any other severance, termination, retention, deferred compensation, bonus or other incentive compensation, profit sharing, stock option, stock appreciation right, restricted stock, stock equivalent, stock purchase, pension, retirement, medical, hospitalization, life or other insurance or other employee benefit plan for the benefit of the officers, directors, and/or employees of any Company, or (D) enter into any employment agreement with any person that provides for annual base salary in excess of $150,000; (viii) except for transfers of cash or borrowings pursuant to normal cash management practices, permit any Company to make any investments in or loans to, or pay any fees or expenses to, or enter into or modify any Contract with, any Seller or any Affiliate of any Seller; (ix) permit any Company to enter into or agree to enter into any merger or consolidation with any other Person or make any loans, advances or capital contributions to, or investments in, any other Person; (x) with respect to any Company, settle or compromise any Tax Claim, or waive or extend the statute of limitations in respect of any Taxes, unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) or is required by Law; (xi) make or rescind any express or deemed election relating to Taxes of any Company (except in accordance with past practice) unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) or would be required by applicable Law; (xii) except in the ordinary course of business, modify, amend, terminate or fail to renew (to the extent such contract can be unilaterally renewed by any Company) any Material Contract to which any Company is a party, or waiver, release or assign any material rights or claims thereunder or enter into any contract other than in the ordinary course of business consistent with past practice that would be material to the Businesses; (xiii) settle, pay or discharge any litigation, investigation, arbitration, proceeding or other claim, liability or obligation (whether absolute, accrued, asserted or unasserted, contingent or otherwise) arising from the conduct of business except in the ordinary course of business consistent with past practice and except that the matters disclosed on Schedule 4.18 may be settled without the Purchaser’s consent provided such settlement does not impose any costs or restrictions on the Businesses after Closing other that as provided herein; (xiv) make any change in the accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Business, except insofar as may have been required by a change in GAAP and after consulting with independent accounts; (xv) modify or change in any material respect, allow to expire or lapse or fail to renew any material permit or material insurance policy listed on Schedule 6.8; (xvi) authorize any material capital expenditures not budgeted for; or (xvii) agree or commit to take any action prohibited by this Section 6.2(b).
Appears in 1 contract
Conduct of Business Pending the Closing. Prior to Between the Closing,
(a) date of this Agreement and the Closing Date, the Sellers shall, and shall cause the Companies Business to (A) conduct the respective businesses of the Companies be conducted only in the ordinary course Ordinary Course of business Business, consistent with past practice, and (B) practice or as specifically permitted by this Agreement. The Sellers shall use commercially their reasonable efforts to (1) preserve intact the business organization of the Acquired Companies and to keep available the services of the Acquired Companies’ current officers, employees and consultants, and to preserve the Acquired Companies’ present relationships with customers, suppliers and other persons with which they have significant business operationsrelations. The Sellers shall also use their reasonable efforts to cause the Acquired Companies to maintain all their assets and properties (real and personal) in substantially the same condition as existed on the date of this Agreement, organization ordinary wear and goodwill of tear excepted. Notwithstanding the Companiesforegoing, and (2) preserve the present relationship with Persons having material business dealings with the Companies, and (C) make capital expenditures in accordance with its annual budget previously provided to Purchaser, provided that nothing in except as contemplated by this Section 6.2(a) shall prevent the Companies from (x) paying dividends or other cash transfers or payments to or on behalf of any Seller or any of its AffiliatesAgreement, or (y) repaying any Indebtedness.
(b) Without limiting the generality of the foregoing except: (i) as set forth on Schedule 6.2 hereto6.2, (ii) as expressly contemplated by the Seller DocumentsSellers shall not permit the Acquired Companies to, (iii) as required by applicable Lawbetween the date of this Agreement and the Closing Date, directly or (iv) with indirectly, do or propose or agree to do any of the following without the prior written consent of Purchaser the Buyer (not which consent may also be evidenced by Super Board Approval of such matter):
x. Xxxxx a security interest in or allow an Encumbrance to be unreasonably withheld), Sellers shall not, and shall cause placed upon the Companies not to:
(i) transfer, issue, sell or dispose of any shares of capital stock or other securities of any Company Membership Interest or grant options, warrants, calls or other rights sell any option to purchase or otherwise acquire shares of the capital stock or other securities of any CompanyMembership Interest;
(ii) effect any recapitalizationb. sell, reclassificationpledge, stock split dispose of, or other change in authorize the capitalization of any Company;
(iii) enter into any new line of businesssale, discontinue any line of business pledge, disposition or amend the certificate of incorporation or by-laws (or comparable organizational documents) of any Company;
(iv) except for (A) trade payables in the ordinary course of business, and (B) amounts that will be repaid at or prior to the Effective Time, incur or increase any Indebtedness Encumbrance (other than Indebtedness that will be paid off at Permitted Encumbrances) of, any asset or prior to Closing)property of the Acquired Companies, except sales of inventory or become non-material assets not necessary for the guarantorconduct of the Business, surety, endorser or otherwise liable (whether directly, contingently or otherwise) for any debt, obligation or liability (contingent or otherwise) each in the Ordinary Course of any other Person (except for another Company)Business;
(v) subject c. declare, set aside, make or pay any of distributions, other than distributions to the properties or assets (whether tangible or intangible) of any Company Sellers and the Buyer to any Lien (except for Permitted Exceptions) that will not be removed at or prior to Closingthe extent permitted by the Operating Agreement;
(vi) d. acquire (including, without limitation, for cash or shares of stock, by merger, consolidation, or acquisition of stock or assets or otherwiseassets) any properties, assets or equity interests interest in any Person, or sellmake any investment either by purchase of stock or securities or contribution of capital or property, assignor, transferexcept in the Ordinary Course of Business, conveypurchase any property or assets of any other Person;
e. incur any indebtedness for borrowed money or issue any debt securities or assume, lease guarantee or endorse or otherwise dispose as an accommodation become responsible for, the obligations of any of Person, in each case, other than pursuant to the properties or assets (except for the purchase of raw materials or the sale of inventory for fair consideration Credit Agreement and in the ordinary course Ordinary Course of business consistent with past practice) of any Company for which the aggregate consideration paid or payable is in excess of $1,000,000;
(vii) (A) grant any material increase in the compensation of officers and directors of any CompanyBusiness, or make any general uniform increase loans or advances to any Equity Owner or, except in the Ordinary Course of Business, to any other Person;
f. enter into, amend or terminate any Material Company Contract other than in the Ordinary Course of Business;
g. increase the compensation of Current Employees of the Companiespayable or to become payable to its officers or Equity Owners or, except as required by Contracts in the Ordinary Course of Business, employees, or pursuant to and consistent with existing plans or programs that have been disclosed to Purchaser, (B) grant any material bonusseverance or termination pay to, benefit or other direct enter into any employment or indirect compensation to severance agreement with, any employeeof its directors, director or consultant of any Companyofficers, Equity Owners or, except as required by Contracts that have been disclosed to Purchaserin the Ordinary Course of Business, pursuant to and consistent with existing plans other employees, or programsestablish, (C) adopt, enter into or amend or take any material Company Plan action to accelerate any rights or benefits under any other severancecollective bargaining, termination, retention, deferred compensation, bonus or other incentive compensationbonus, profit sharing, stock optiontrust, stock appreciation right, restricted stock, stock equivalent, stock purchasecompensation, pension, retirement, medicaldeferred compensation, hospitalizationemployment, life termination, severance or other insurance plan, agreement, trust, fund, policy or other employee benefit plan arrangement for the benefit of the any directors, officers, directorsEquity Owners or, and/or except in the Ordinary Course of Business, employees of any Company, or (D) enter into any employment agreement with any person that provides for annual base salary in excess of $150,000;
(viii) except for transfers of cash or borrowings pursuant to normal cash management practices, permit any Company to make any investments in or loans to, grant or pay any fees or expenses to, or enter into or modify bonuses to any Contract with, any Seller or any Affiliate of any SellerEquity Owner;
(ix) permit any Company to enter into h. pay, discharge or agree to enter into any merger or consolidation with any other Person or make any loans, advances or capital contributions to, or investments in, any other Person;
(x) with respect to any Company, settle or compromise any Tax Claim, or waive or extend the statute of limitations in respect of any Taxes, unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) or is required by Law;
(xi) make or rescind any express or deemed election relating to Taxes of any Company (except in accordance with past practice) unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) or would be required by applicable Law;
(xii) except in the ordinary course of business, modify, amend, terminate or fail to renew (to the extent such contract can be unilaterally renewed by any Company) any Material Contract to which any Company is a party, or waiver, release or assign satisfy any material rights claims, liabilities or claims thereunder or enter into any contract other than in the ordinary course of business consistent with past practice that would be material to the Businesses;
obligations (xiii) settle, pay or discharge any litigation, investigation, arbitration, proceeding or other claim, liability or obligation (whether absolute, accrued, asserted or unasserted, contingent or otherwise) arising from ), other than the conduct of business except payment, discharge or satisfaction in the ordinary course Ordinary Course of business consistent Business;
i. delay any budgeted or reasonably necessary capital expenditure or make or incur any unbudgeted capital expenditure in excess of $20,000.00 in the aggregate; provided, that the limitation in this Section 6.2(i) shall not apply to (1) capital expenses approved prior to the date of this Agreement and disclosed to the Buyer prior to the date of this Agreement, or (2) capital expenditures to repair or replace assets used in the Business reasonably necessary to continue or preserve the Business;
j. cancel any material indebtedness of any Person to the Acquired Companies (individually or in the aggregate) or waive any claims or rights of substantial value;
k. enter into any transaction with the Sellers, the Equity Owners or any Affiliates of the Sellers or Equity Owners, except transactions in the Ordinary Course of Business;
l. take any action to change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of accounts payable and collection of accounts receivable);
m. make any Tax election inconsistent with past practice and except that the matters disclosed on Schedule 4.18 may be settled without the Purchaser’s consent provided such settlement does not impose practice, revoke any costs or restrictions on the Businesses after Closing other that as provided herein;
(xiv) make any change in the accounting methodsTax election, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations agree to an extension of the Businessstatute of limitations, except insofar as may have been required by a change in GAAP and after consulting with independent accounts;
(xv) modify or change in settle or compromise any material respectfederal, allow to expire state, local or lapse or fail to renew any material permit or material insurance policy listed on Schedule 6.8;
(xvi) authorize any material capital expenditures not budgeted forforeign Tax liability; or
(xvii) agree n. agree, in writing or commit otherwise, to take or authorize any action prohibited by this Section 6.2(b)of the foregoing actions.
Appears in 1 contract
Conduct of Business Pending the Closing. Prior to SECTION 5.1 Conduct of Business by the Company Pending the Closing,. The Company and the Sellers covenant and agree that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement and the Closing, unless Buyer shall otherwise agree in writing, the Company shall, and the Sellers shall cause the Company to, conduct its business only in, and the Company shall not, and the Sellers shall cause the Company not to, take any action except in, the ordinary course of business and in a manner consistent with past practice; and the Company shall use all reasonable commercial efforts to preserve substantially intact the business organization of the Company, to keep available the services of the present officers, employees and consultants of the Company and to preserve the present relationships of the Company with customers, suppliers and other persons with which the Company has business relations. By way of amplification and not limitation, except as contemplated by this Agreement, the Company shall not, and the Sellers shall cause the Company not to, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Closing, directly or indirectly do, or propose to do, any of the following without the prior written consent of Buyer:
(a) Sellers shall, and shall cause amend or otherwise change the Companies to (A) conduct the respective businesses Articles of Organization or By-Laws of the Companies only Company;
(b) issue, sell, pledge, dispose of or voluntarily encumber, or authorize the issuance, sale, pledge, disposition or voluntary encumbrance of, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (including, without limitation, any phantom interest) in the Company;
(c) sell, pledge, dispose of or voluntarily encumber any assets (tangible or intangible) of the Company except for (i) dispositions of obsolete or worthless assets and (ii) sales of immaterial assets not in excess of $10,000 in the aggregate;
(i) declare, set aside, make or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any of its capital stock (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, any of its securities including without limitation, shares of Company Common Stock or any option, warrant or right, directly or indirectly, to acquire shares of Company Common Stock, or propose to do any of the foregoing; provided, however, that the Company may make a distribution to the Sellers on the day immediately preceding the Closing Date, as set forth in Sections 6.8 and 6.13 hereof;
(i) acquire (by merger, consolidation, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person or, except in the ordinary course of business consistent with past practice, and (B) use commercially reasonable efforts to (1) preserve the present business operations, organization and goodwill of the Companies, and (2) preserve the present relationship with Persons having material business dealings with the Companies, and (C) make capital expenditures in accordance with its annual budget previously provided to Purchaser, provided that nothing in this Section 6.2(a) shall prevent the Companies from (x) paying dividends any loans or other cash transfers or payments to or on behalf of any Seller or any of its Affiliates, or (y) repaying any Indebtedness.
(b) Without limiting the generality of the foregoing except: (i) as set forth on Schedule 6.2 hereto, (ii) as expressly contemplated by the Seller Documents, (iii) as required by applicable Law, or (iv) with the prior written consent of Purchaser (not to be unreasonably withheld), Sellers shall not, and shall cause the Companies not to:
(i) transfer, issue, sell or dispose of any shares of capital stock or other securities of any Company or grant options, warrants, calls or other rights to purchase or otherwise acquire shares of the capital stock or other securities of any Company;
(ii) effect any recapitalization, reclassification, stock split or other change in the capitalization of any Company;
advances; (iii) enter into any new line of business, discontinue any line of business or amend any material contract or agreement; (iv) authorize any capital expenditures or purchase of fixed assets which are, in the certificate aggregate, in excess of incorporation $25,000 for the Company; or by-laws (v) enter into or comparable organizational documents) amend any contract, agreement, commitment or arrangement to effect any of any Companythe matters prohibited by this Section 5.1(e);
(ivf) except for (A) trade payables increase the compensation payable or to become payable to its officers or employees other than in the ordinary course of business, and (B) amounts that will be repaid at or prior to the Effective Time, incur grant any severance or increase any Indebtedness (other than Indebtedness that will be paid off at or prior to Closing)termination pay to, or become the guarantorenter into any employment or severance agreement with any director, surety, endorser officer or otherwise liable (whether directly, contingently or otherwise) for any debt, obligation or liability (contingent or otherwise) of any other Person (except for another Company);
(v) subject any employee of the properties or assets (whether tangible or intangible) of any Company to any Lien (except for Permitted Exceptions) that will not be removed at or prior to Closing;
(vi) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any properties, assets or equity interests in any Person, or sell, assign, transfer, convey, lease or otherwise dispose of any of the properties or assets (except for the purchase of raw materials or the sale of inventory for fair consideration in the ordinary course of business consistent with past practice) of any Company for which the aggregate consideration paid or payable is in excess of $1,000,000;
(vii) (A) grant any material increase in the compensation of officers and directors of any Company, or make any general uniform increase in the compensation of Current Employees of the Companiesestablish, except as required by Contracts or pursuant to and consistent with existing plans or programs that have been disclosed to Purchaseradopt, (B) grant any material bonus, benefit or other direct or indirect compensation to any employee, director or consultant of any Company, except as required by Contracts that have been disclosed to Purchaser, pursuant to and consistent with existing plans or programs, (C) enter into or amend any material Company Plan or any other severancecollective bargaining, termination, retention, deferred compensation, bonus or other incentive compensationbonus, profit sharing, thrift, compensation, stock option, stock appreciation right, restricted stock, stock equivalent, stock purchase, pension, retirement, medicaldeferred compensation, hospitalizationemployment, life termination, severance or other insurance plan, agreement, trust, fund, policy or other employee benefit plan arrangement for the benefit of the officers, any current or former directors, and/or employees officers or employees, except, in each case, as may be required by law; provided, however, that the Company may provide for bonus payments to be made (x) to each of any CompanyXxxxxxx Xxxx, or Xxxxx Xxxxxxxx and Xxxxx Xxxxx (Dthe "Specified Employees") enter into any employment agreement in an amount not to exceed $400,000 in the aggregate, and (y) to the extent that the bonus payments made to the Specified Employees are, in the aggregate, less than $400,000, to Xxxxxx Xxxxx and Xxxxx Xxxxx in an aggregate amount which, together with any person that provides for annual base salary in excess of the bonuses paid to the Specified Employees pursuant to this proviso, equals $150,000400,000;
(viiig) except for transfers take any action to change accounting policies or procedures (including, without limitation, procedures with respect to revenue recognition, payments of cash or borrowings pursuant to normal cash management practices, permit any Company to make any investments in or loans to, or pay any fees or expenses to, or enter into or modify any Contract with, any Seller or any Affiliate accounts payable and collection of any Selleraccounts receivable);
(ixh) permit any Company to enter into or agree to enter into any merger or consolidation with any other Person or make any loans, advances material tax election inconsistent with past practice or capital contributions to, or investments in, any other Person;
(x) with respect to any Company, settle or compromise any Tax Claimmaterial federal, state, local or waive foreign tax liability or extend the agree to an extension of a statute of limitations in respect of any Taxes, unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) or is required by Lawlimitations;
(xii) make pay, discharge or rescind satisfy any express claims, liabilities or deemed election relating to Taxes of any Company obligations (except in accordance with past practice) unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) or would be required by applicable Law;
(xii) except in the ordinary course of business, modify, amend, terminate or fail to renew (to the extent such contract can be unilaterally renewed by any Company) any Material Contract to which any Company is a party, or waiver, release or assign any material rights or claims thereunder or enter into any contract other than in the ordinary course of business consistent with past practice that would be material to the Businesses;
(xiii) settle, pay or discharge any litigation, investigation, arbitration, proceeding or other claim, liability or obligation (whether absolute, accrued, asserted or unasserted, contingent or otherwise) arising from ), other than the conduct of business except payment, discharge or satisfaction in the ordinary course of business and consistent with past practice and except that the matters disclosed on Schedule 4.18 may be settled without the Purchaser’s consent provided such settlement does not impose any costs of liabilities reflected or restrictions on the Businesses after Closing other that as provided herein;
(xiv) make any change reserved against in the accounting methods, principles Financial Statements or practices materially affecting incurred in the reported consolidated assets, liabilities or results ordinary course of operations of the Business, except insofar as may have been required by a change in GAAP business and after consulting consistent with independent accounts;
(xv) modify or change in any material respect, allow to expire or lapse or fail to renew any material permit or material insurance policy listed on Schedule 6.8;
(xvi) authorize any material capital expenditures not budgeted forpast practice; or
(xviij) take, or agree in writing or commit otherwise to take take, any of the actions described in Sections 5.1 (a) through (i) above, or any action prohibited by which would make any of the representations or warranties of the Company contained in this Section 6.2(b)Agreement untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder.
Appears in 1 contract
Conduct of Business Pending the Closing. Prior The Company agrees that, between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement (including as allowed by any provision of this Section 6.1), as required by applicable Law or as consented to in writing by Parent (such consent not to be unreasonably withheld or delayed), the Closing,
(a) Sellers shallCompany will, and will cause each Company Subsidiary to, in all material respects (it being understood that in no event shall cause the Companies Company’s participation in the negotiation (including activities related to due diligence), execution, delivery or public announcement (Ain accordance with this Agreement) conduct or the pendency of this Agreement or the transactions contemplated hereby or any actions taken in compliance herewith or the consequences thereof on the respective businesses of the Companies only Company and the Company Subsidiaries, be considered a breach of any of the provisions of this Section 6.1), (i) carry on its business in the ordinary course consistent with past practice and (ii) use all reasonable efforts to preserve the relationship with its employees and consultants and to preserve intact its current relationships with such of its customers, suppliers and other Persons (including physicians) with which it has significant business relations. Without limiting the foregoing, and as an extension thereof, except as otherwise contemplated by this Agreement (including any provision of this Section 6.1), as required by applicable Law or as consented to in writing by Parent (such consent not to be unreasonably withheld or delayed), the Company shall not, and shall not permit any Company Subsidiary to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following:
(a) amend or otherwise change the Company Certificate, the Company Bylaws or equivalent organizational documents;
(b) except as permitted by Section 6.1(k) below, issue, deliver, sell, pledge or encumber, or authorize, propose or agree to the issuance, delivery, sale, pledge or encumbrance of, any shares of its capital stock or the capital stock of the Company Subsidiaries, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of any class or series of its capital stock (other than pursuant to the exercise of options, warrants, conversion rights, vesting of Company Restricted Stock Awards and other contractual rights existing on the date hereof) or the capital stock of the Company Subsidiaries;
(c) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock (other than dividends paid by a wholly-owned Company Subsidiary to the Company or to any other wholly-owned Company Subsidiary) or enter into any agreement with respect to the voting of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other Equity Interests, except pursuant to the exercise of options, warrants and Company Restricted Stock Awards (i) existing on the date hereof or (ii) issued or granted after the date hereof as permitted by Section 6.1(k);
(e) acquire (including by merger, consolidation, or acquisition of stock or assets), outside of the ordinary course of business, any interest in any Person or any division thereof or any assets, other than any other acquisitions for consideration that is individually not in excess of $2,500,000, or in the aggregate not in excess of $10,000,000;
(f) sell, lease, license, or otherwise dispose of any of its material assets, other than (i) sales of inventory in the ordinary course of business consistent with past practice, and (Bii) use commercially reasonable efforts to other dispositions in the ordinary course of business so long as the aggregate value of all assets so disposed of as described in this subclause (1ii) preserve the present business operations, organization and goodwill of the Companiesdoes not exceed $500,000, and (2) preserve the present relationship with Persons having material business dealings with the Companies, and (C) make capital expenditures in accordance with its annual budget previously provided to Purchaser, provided that nothing in this Section 6.2(a) shall prevent the Companies from (x) paying dividends or other cash transfers or payments to or on behalf of any Seller or any of its Affiliates, or (y) repaying any Indebtedness.
(b) Without limiting the generality of the foregoing except: (iiii) as set forth on Schedule 6.2 hereto6.1(f) of the Company Disclosure Schedule;
(g) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person (other than a wholly-owned Company Subsidiary) for borrowed money, except for (i) indebtedness for borrowed money incurred in the ordinary course of business under existing credit facilities, (ii) as expressly contemplated by indebtedness for borrowed money incurred in connection with an acquisition permitted under the Seller Documentspreceding clause (e), and (iii) as required indebtedness owing by applicable Lawany Company Subsidiary to the Company or any other wholly-owned Company Subsidiary;
(h) grant any Lien in any of its material assets to secure any indebtedness for borrowed money, or except in connection with such indebtedness permitted under the preceding clause (iv) with the prior written consent of Purchaser (not to be unreasonably withheldg), Sellers shall not, and shall cause the Companies not to:;
(i) transfer, issue, sell or dispose of any shares of capital stock or other securities of any Company or grant options, warrants, calls or other rights to purchase or otherwise acquire shares of the capital stock or other securities of any Company;
(ii) effect any recapitalization, reclassification, stock split or other change in the capitalization of any Company;
(iii) enter into any new line of business, discontinue any line business outside of its existing business or amend the certificate of incorporation or by-laws (or comparable organizational documents) of any Companysegments;
(ivj) make investments in Persons other than wholly-owned Subsidiaries of the Company, except for ordinary course investments in accordance with the Company’s existing investment policy;
(k) except as set forth on Schedule 6.1(k) of the Company Disclosure Schedule, adopt or amend any material Company Benefit Plan, increase in any material manner the compensation or fringe benefits of any director, officer or employee of the Company or pay any material benefit not provided for by any existing Company Benefit Plan, in each case except (i) as reasonably necessary to comply with applicable Law, (ii) in connection with entering into or extending in the ordinary course of business any employment or other compensatory agreements or arrangements (A) trade payables with individuals other than executive officers or directors of the Company, or (B) that are made available generally to all or substantially all employees of the Company and the Company Subsidiaries (which may include executive officers or directors of the Company), or (iii) general salary increases in the ordinary course of business;
(l) pay, and discharge, settle or satisfy any material claims, liabilities or obligations (B) amounts that will be repaid at or prior to the Effective Timeabsolute, incur or increase any Indebtedness (other than Indebtedness that will be paid off at or prior to Closing)accrued, or become the guarantor, surety, endorser or otherwise liable (whether directly, contingently or otherwise) for any debt, obligation or liability (contingent or otherwise), other than (i) of any other Person (except for another Company);
(v) subject any of the properties or assets (whether tangible or intangible) of any Company to any Lien (except for Permitted Exceptions) that will not be removed at or prior to Closing;
(vi) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any properties, assets or equity interests in any Person, or sell, assign, transfer, convey, lease or otherwise dispose of any of the properties or assets (except for the purchase of raw materials or the sale of inventory for fair consideration in the ordinary course of business consistent with past practice) of any Company for which the aggregate consideration paid or payable is in excess of $1,000,000;
(vii) (A) grant any material increase in the compensation of officers and directors of any Company, or make any general uniform increase in the compensation of Current Employees of the Companies, except as required by Contracts or pursuant to and consistent with existing plans or programs that have been disclosed to Purchaser, (Bii) grant any material bonus, benefit or other direct or indirect compensation to any employee, director or consultant the performance of any Company, except as required by Contracts that have been disclosed to Purchaser, pursuant to and consistent contractual obligations in accordance with existing plans or programs, (C) enter into or amend any material Company Plan or any other severance, termination, retention, deferred compensation, bonus or other incentive compensation, profit sharing, stock option, stock appreciation right, restricted stock, stock equivalent, stock purchase, pension, retirement, medical, hospitalization, life or other insurance or other employee benefit plan for the benefit of the officers, directors, and/or employees of any Companytheir terms, or (Diii) enter into any employment agreement the payment, discharge, settlement or satisfaction in accordance with any person that provides for annual base salary in excess of $150,000;
(viii) except for transfers of cash or borrowings pursuant to normal cash management practicestheir terms, permit any Company to make any investments in or loans to, or pay any fees or expenses to, or enter into or modify any Contract with, any Seller or any Affiliate of any Seller;
individual claim (ix) permit any Company to enter into including a claim for Taxes), liability or agree to enter into any merger or consolidation with any other Person or make any loans, advances or capital contributions to, or investments in, any other Person;
obligation that (x) with respect involves payments to or by the Company or any CompanyCompany Subsidiary of less than $500,000 in the aggregate (plus any additional amounts paid by insurance maintained by the Company or any Company Subsidiary), settle or compromise any Tax Claim, or waive or extend the statute of limitations in respect of any Taxes, unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companiesy) was or is required disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company SEC Filings filed prior to the date hereof, contemplated by Law;
(xi) make documents made available to Parent prior to the date hereof or rescind any express or deemed election relating to Taxes incurred since the date of any Company (except in accordance with past practice) unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) or would be required by applicable Law;
(xii) except financial statements in the ordinary course of business, modifyor (z) is listed on Schedule 6.1(l) of the Company Disclosure Schedule;
(m) other than as required by SEC guidelines or GAAP, amendrevalue any assets or make any changes with respect to accounting policies, terminate procedures and practices or change its fiscal year;
(n) make or change any election for Taxes, change any annual accounting period for Taxes, adopt or change any method of accounting for Taxes, amend any Tax Returns or file claims for material refunds for Taxes or surrender any right to claim a material refund, offset or other reduction in liability for Taxes, enter into any material closing agreement, settle any material Tax claim or assessment relating to the Company or any Company Subsidiary or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any Company Subsidiary;
(o) enter into, terminate, renew, amend or modify in any material respect or fail to renew (to the extent such contract can be unilaterally renewed by any Company) any Material Contract to which any Company is a party, or waiver, release or assign any material rights or claims thereunder or enter into any contract other than in the ordinary course of business consistent with past practice that would be material to the Businesses;
(xiii) settle, pay or discharge any litigation, investigation, arbitration, proceeding or other claim, liability or obligation (whether absolute, accrued, asserted or unasserted, contingent or otherwise) arising from the conduct of business except in the ordinary course of business consistent with past practice and except that the matters disclosed on Schedule 4.18 may be settled without the Purchaser’s consent provided such settlement does not impose any costs or restrictions on the Businesses after Closing other that as provided herein;
(xiv) make any change in the accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Business, except insofar as may have been required by a change in GAAP and after consulting with independent accounts;
(xv) modify or change enforce in any material respect, allow to expire or lapse or fail to renew respect any material permit or material insurance policy listed on Schedule 6.8;
(xvi) authorize any material capital expenditures not budgeted forCompany Material Contract; or
(xviip) agree or commit to take any action prohibited except as otherwise contemplated by this Section 6.2(bAgreement, including Sections 6.1(e) and 6.4, or as otherwise required by Law or any Governmental Entity, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary (other than the Merger).
Appears in 1 contract
Conduct of Business Pending the Closing. Prior Except as otherwise expressly contemplated by this Agreement and the Plan or any of the other Transaction Documents or as consented to by the Closing,
(a) Sellers Plan Investor in writing or as required by the Bankruptcy Code, during the period from the date of this Agreement through and including the Closing Date, the Company shall, and shall cause the Companies to each of its Subsidiaries to, (Aa) conduct the respective businesses of the Companies only its operations and business in the ordinary course Ordinary Course of business Business, including, without limitation, paying its vendors, trade creditors and other creditors, in a manner consistent with past practice, the Budget and the Business Plan; (Bb) use commercially reasonable efforts to preserve intact its business relationships with third parties; and (1c) preserve confer with the present business operationsPlan Investor on operational matters of a material nature. The Company shall give the Plan Investor prompt notice of any event, organization and goodwill condition or circumstance occurring from the date hereof through the Closing Date that would constitute a violation or breach of (i) any representation or warranty, whether made as of the Companies, and (2) preserve date hereof or as of the present relationship with Persons having material business dealings with Closing Date or any covenant of the Companies, and (C) make capital expenditures Company in accordance with its annual budget previously provided to Purchaser, provided that nothing either case contained in this Section 6.2(a) shall prevent the Companies from (x) paying dividends or other cash transfers or payments to or on behalf of any Seller or any of its Affiliates, or (y) repaying any Indebtedness.
(b) Agreement. Without limiting the generality of the foregoing except: (i) as set forth on Schedule 6.2 heretoforegoing, (ii) as expressly contemplated unless otherwise agreed to by the Seller DocumentsPlan Investor, (iii) as required by applicable Law, or (iv) with the prior written consent of Purchaser (not to be unreasonably withheld), Sellers Company shall not, and shall cause the Companies not permit any of its Subsidiaries to:
(ia) transferamend its charter, issue, sell or dispose of any shares of capital stock bylaws or other securities of any Company comparable organizational documents other than in accordance with this Agreement or grant options, warrants, calls or other rights to purchase or otherwise acquire shares of as contemplated by the capital stock or other securities of any CompanyPlan;
(iib) effect acquire any recapitalization"business", reclassification, stock split or other change as defined in the capitalization of any Company;
(iii) enter into any new line of business, discontinue any line of business or amend the certificate of incorporation or byRule 3-laws (or comparable organizational documents05(a)(2) of any Company;
(iv) except for (A) trade payables in the ordinary course of business, and (B) amounts that will be repaid at or prior to the Effective Time, incur or increase any Indebtedness (other than Indebtedness that will be paid off at or prior to Closing), or become the guarantor, surety, endorser or otherwise liable Regulation S-X (whether directly, contingently or otherwise) for any debt, obligation or liability (contingent or otherwise) of any other Person (except for another Company);
(v) subject any of the properties or assets (whether tangible or intangible) of any Company to any Lien (except for Permitted Exceptions) that will not be removed at or prior to Closing;
(vi) acquire (by merger, consolidation, acquisition purchase of stock or assets or otherwise) or acquire any, or increase any propertiesexisting, assets or equity interests interest in any PersonPerson not a Subsidiary (whether through a purchase of stock, establishment of a joint venture or otherwise);
(c) assume or reject any Material Contract or Assumed Contract;
(d) establish, modify or increase, in any material respect, the benefits under, or promise to establish, modify or increase in any material respect the benefits under, any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including without limitation, the granting of stock options, stock appreciation rights, performance awards, or restricted stock awards), stock purchase or other employee benefit plan or employment, consulting or severance agreement, or otherwise increase, in any material respect, the compensation payable to any directors, or officers, or employees, as a whole, of the Company, or establish, adopt or enter into any employment agreement, retention arrangement or collective bargaining agreement;
(e) other than the items set forth in Section 6.1(e) of the Company Disclosure Schedule (which Schedule shall be delivered within 30 days of the date hereof and shall be reasonably acceptable to the Plan Investor) and other than in connection with any Store Closing, (i) sell, assignexchange, transfer, convey, lease license or otherwise dispose of any of the its real properties or assets (other material assets, except for the purchase of raw materials or the sale sales of inventory for fair consideration and consignment goods in the ordinary course Ordinary Course of business consistent with past practice) of any Company for which the aggregate consideration paid or payable is in excess of $1,000,000;
(vii) (A) grant any material increase in the compensation of officers and directors of any Company, or make any general uniform increase in the compensation of Current Employees of the Companies, except as required by Contracts or pursuant to and consistent with existing plans or programs that have been disclosed to PurchaserBusiness, (B) grant any material bonus, benefit or other direct or indirect compensation to any employee, director or consultant of any Company, except as required by Contracts that have been disclosed to Purchaser, pursuant to and consistent with existing plans or programs, (C) enter into or amend any material Company Plan or any other severance, termination, retention, deferred compensation, bonus or other incentive compensation, profit sharing, stock option, stock appreciation right, restricted stock, stock equivalent, stock purchase, pension, retirement, medical, hospitalization, life or other insurance or other employee benefit plan for the benefit of the officers, directors, and/or employees of any Company, or (Dii) enter into any employment agreement with new joint ventures or similar projects, (iii) mortgage any person that provides of its real property or other assets except for annual base salary in excess Permitted Encumbrances or (iv) close any other stores of $150,000the Company or any of its Subsidiaries;
(viiif) (i) incur any additional indebtedness (including capital leases), indemnification obligations or other material liabilities, except for transfers of cash or borrowings pursuant to normal cash management practicesas permitted by the DIP Financing Facility, permit any Company to make any investments in or loans to, or pay any fees or expenses to, or enter into or modify any Contract with, any Seller or any Affiliate of any Seller;
(ixii) permit any Company to enter into or agree to enter into any merger or consolidation with any other Person or make any loans, advances advances, restricted payments or capital contributions to, or investments in, any Person (excluding any Subsidiary), except as permitted by the DIP Financing Facility; (iii) pay any pre-Petition Date liabilities except as may be permitted to be paid by a Bankruptcy Court order entered (or pursuant to a motion made, so long as the amount provided for in any pending motion is not materially in excess of the amounts reflected in the Budget) prior to the date of this Agreement; or (iv) pay any post-Petition Date costs or expenses, other Personthan those incurred in the Ordinary Course of Business or permitted to be paid pursuant to a Bankruptcy Court order, in each case so long as such amounts are not materially in excess of the amounts reflected in the Budget;
(xg) enter in any agreement or settlement with (i) the IRS or any other Governmental Entity, including the SEC or any Office of the Attorney General or (ii) Crescent Jewelers or on behalf of Crescent Jewelers or with respect to any Companythe Debtors' claims and/or interests in Crescent Jewelers, settle or compromise any Tax Claimin each case, or waive or extend without the statute consent of limitations in respect of any Taxesthe Plan Investor, unless doing so would which shall not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) or is required by Lawbe unreasonably withheld;
(xih) make enter into any new agreement or rescind amend any express existing agreement containing a non-competition, geographical restriction or deemed election relating similar covenant, in each case in a manner materially adverse to Taxes of any Company (except in accordance with past practice) unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) Plan Investor or would be required by applicable LawReorganized Friedman's;
(xii) except in the ordinary course of business, modify, amend, terminate or fail to renew (to the extent such contract can be unilaterally renewed by any Company) any Material Contract to which any Company is a party, or waiver, release or assign any material rights or claims thereunder or enter into any contract other than in the ordinary course of business consistent with past practice that would be material to the Businesses;
(xiii) settle, pay or discharge any litigation, investigation, arbitration, proceeding or other claim, liability or obligation (whether absolute, accrued, asserted or unasserted, contingent or otherwise) arising from the conduct of business except in the ordinary course of business consistent with past practice and except that the matters disclosed on Schedule 4.18 may be settled without the Purchaser’s consent provided such settlement does not impose any costs or restrictions on the Businesses after Closing other that as provided herein;
(xiv) make any change in the accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Business, except insofar as may have been required by a change in GAAP and after consulting with independent accounts;
(xv) modify or change in any material respect, allow to expire or lapse or fail to renew any material permit or material insurance policy listed on Schedule 6.8;
(xvi) authorize any material capital expenditures not budgeted for; or
(xviii) agree or commit to take any of the foregoing actxxxx; xx
(j) Intentionally and willfully take any action prohibited by to cause any of the Company's representations and warranties contained in this Section 6.2(b)Agreement to be breached.
Appears in 1 contract
Samples: Investment Agreement (Friedmans Inc)
Conduct of Business Pending the Closing. Prior The Company agrees that, between the date of this Agreement and the Effective Time, except as otherwise contemplated by this Agreement (including as allowed by any provision of this Section 6.1), as required by applicable Law or as consented to in writing by Parent (such consent not to be unreasonably withheld or delayed), the Closing,
(a) Sellers shallCompany will, and will cause each Company Subsidiary to, in all material respects (it being understood that in no event shall cause the Companies Company’s participation in the negotiation (including activities related to due diligence), execution, delivery or public announcement (Ain accordance with this Agreement) conduct or the pendency of this Agreement or the transactions contemplated hereby or any actions taken in compliance herewith or the consequences thereof on the respective businesses of the Companies only Company and the Company Subsidiaries, be considered a breach of any of the provisions of this Section 6.1), (i) carry on its business in the ordinary course consistent with past practice and (ii) use all reasonable efforts to preserve the relationship with its employees and consultants and to preserve intact its current relationships with such of its customers, suppliers and other Persons (including physicians) with which it has significant business relations. Without limiting the foregoing, and as an extension thereof, except as otherwise contemplated by this Agreement (including any provision of this Section 6.1), as required by applicable Law or as consented to in writing by Parent (such consent not to be unreasonably withheld or delayed), the Company shall not, and shall not permit any Company Subsidiary to, between the date of this Agreement and the Effective Time, directly or indirectly, do, or agree to do, any of the following:
(a) amend or otherwise change the Company Certificate, the Company Bylaws or equivalent organizational documents;
(b) except as permitted by Section 6.1(k) below, issue, deliver, sell, pledge or encumber, or authorize, propose or agree to the issuance, delivery, sale, pledge or encumbrance of, any shares of its capital stock or the capital stock of the Company Subsidiaries, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of any class or series of its capital stock (other than pursuant to the exercise of options, warrants, conversion rights, vesting of Company Restricted Stock Awards and other contractual rights existing on the date hereof) or the capital stock of the Company Subsidiaries;
(c) declare, set aside, make or pay any dividend or other distribution (whether payable in cash, stock, property or a combination thereof) with respect to any of its capital stock (other than dividends paid by a wholly-owned Company Subsidiary to the Company or to any other wholly-owned Company Subsidiary) or enter into any agreement with respect to the voting of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other Equity Interests, except pursuant to the exercise of options, warrants and Company Restricted Stock Awards
(i) existing on the date hereof or (ii) issued or granted after the date hereof as permitted by Section 6.1(k);
(e) acquire (including by merger, consolidation, or acquisition of stock or assets), outside of the ordinary course of business, any interest in any Person or any division thereof or any assets, other than any other acquisitions for consideration that is individually not in excess of $2,500,000, or in the aggregate not in excess of $10,000,000;
(f) sell, lease, license, or otherwise dispose of any of its material assets, other than (i) sales of inventory in the ordinary course of business consistent with past practice, and (Bii) use commercially reasonable efforts to other dispositions in the ordinary course of business so long as the aggregate value of all assets so disposed of as described in this subclause (1ii) preserve the present business operations, organization and goodwill of the Companiesdoes not exceed $500,000, and (2) preserve the present relationship with Persons having material business dealings with the Companies, and (C) make capital expenditures in accordance with its annual budget previously provided to Purchaser, provided that nothing in this Section 6.2(a) shall prevent the Companies from (x) paying dividends or other cash transfers or payments to or on behalf of any Seller or any of its Affiliates, or (y) repaying any Indebtedness.
(b) Without limiting the generality of the foregoing except: (iiii) as set forth on Schedule 6.2 hereto6.1(f) of the Company Disclosure Schedule;
(g) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any Person (other than a wholly-owned Company Subsidiary) for borrowed money, except for (i) indebtedness for borrowed money incurred in the ordinary course of business under existing credit facilities, (ii) as expressly contemplated by indebtedness for borrowed money incurred in connection with an acquisition permitted under the Seller Documentspreceding clause (e), and (iii) as required indebtedness owing by applicable Lawany Company Subsidiary to the Company or any other wholly-owned Company Subsidiary;
(h) grant any Lien in any of its material assets to secure any indebtedness for borrowed money, or except in connection with such indebtedness permitted under the preceding clause (iv) with the prior written consent of Purchaser (not to be unreasonably withheldg), Sellers shall not, and shall cause the Companies not to:;
(i) transfer, issue, sell or dispose of any shares of capital stock or other securities of any Company or grant options, warrants, calls or other rights to purchase or otherwise acquire shares of the capital stock or other securities of any Company;
(ii) effect any recapitalization, reclassification, stock split or other change in the capitalization of any Company;
(iii) enter into any new line of business, discontinue any line business outside of its existing business or amend the certificate of incorporation or by-laws (or comparable organizational documents) of any Companysegments;
(ivj) make investments in Persons other than wholly-owned Subsidiaries of the Company, except for ordinary course investments in accordance with the Company’s existing investment policy;
(k) except as set forth on Schedule 6.1(k) of the Company Disclosure Schedule, adopt or amend any material Company Benefit Plan, increase in any material manner the compensation or fringe benefits of any director, officer or employee of the Company or pay any material benefit not provided for by any existing Company Benefit Plan, in each case except (i) as reasonably necessary to comply with applicable Law, (ii) in connection with entering into or extending in the ordinary course of business any employment or other compensatory agreements or arrangements (A) trade payables with individuals other than executive officers or directors of the Company, or (B) that are made available generally to all or substantially all employees of the Company and the Company Subsidiaries (which may include executive officers or directors of the Company), or (iii) general salary increases in the ordinary course of business;
(l) pay, and discharge, settle or satisfy any material claims, liabilities or obligations (B) amounts that will be repaid at or prior to the Effective Timeabsolute, incur or increase any Indebtedness (other than Indebtedness that will be paid off at or prior to Closing)accrued, or become the guarantor, surety, endorser or otherwise liable (whether directly, contingently or otherwise) for any debt, obligation or liability (contingent or otherwise), other than (i) of any other Person (except for another Company);
(v) subject any of the properties or assets (whether tangible or intangible) of any Company to any Lien (except for Permitted Exceptions) that will not be removed at or prior to Closing;
(vi) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any properties, assets or equity interests in any Person, or sell, assign, transfer, convey, lease or otherwise dispose of any of the properties or assets (except for the purchase of raw materials or the sale of inventory for fair consideration in the ordinary course of business consistent with past practice) of any Company for which the aggregate consideration paid or payable is in excess of $1,000,000;
(vii) (A) grant any material increase in the compensation of officers and directors of any Company, or make any general uniform increase in the compensation of Current Employees of the Companies, except as required by Contracts or pursuant to and consistent with existing plans or programs that have been disclosed to Purchaser, (Bii) grant any material bonus, benefit or other direct or indirect compensation to any employee, director or consultant the performance of any Company, except as required by Contracts that have been disclosed to Purchaser, pursuant to and consistent contractual obligations in accordance with existing plans or programs, (C) enter into or amend any material Company Plan or any other severance, termination, retention, deferred compensation, bonus or other incentive compensation, profit sharing, stock option, stock appreciation right, restricted stock, stock equivalent, stock purchase, pension, retirement, medical, hospitalization, life or other insurance or other employee benefit plan for the benefit of the officers, directors, and/or employees of any Companytheir terms, or (Diii) enter into any employment agreement the payment, discharge, settlement or satisfaction in accordance with any person that provides for annual base salary in excess of $150,000;
(viii) except for transfers of cash or borrowings pursuant to normal cash management practicestheir terms, permit any Company to make any investments in or loans to, or pay any fees or expenses to, or enter into or modify any Contract with, any Seller or any Affiliate of any Seller;
individual claim (ix) permit any Company to enter into including a claim for Taxes), liability or agree to enter into any merger or consolidation with any other Person or make any loans, advances or capital contributions to, or investments in, any other Person;
obligation that (x) with respect involves payments to or by the Company or any CompanyCompany Subsidiary of less than $500,000 in the aggregate (plus any additional amounts paid by insurance maintained by the Company or any Company Subsidiary), settle or compromise any Tax Claim, or waive or extend the statute of limitations in respect of any Taxes, unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companiesy) was or is required disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company SEC Filings filed prior to the date hereof, contemplated by Law;
(xi) make documents made available to Parent prior to the date hereof or rescind any express or deemed election relating to Taxes incurred since the date of any Company (except in accordance with past practice) unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) or would be required by applicable Law;
(xii) except financial statements in the ordinary course of business, modifyor (z) is listed on Schedule 6.1(l) of the Company Disclosure Schedule;
(m) other than as required by SEC guidelines or GAAP, amendrevalue any assets or make any changes with respect to accounting policies, terminate procedures and practices or change its fiscal year;
(n) make or change any election for Taxes, change any annual accounting period for Taxes, adopt or change any method of accounting for Taxes, amend any Tax Returns or file claims for material refunds for Taxes or surrender any right to claim a material refund, offset or other reduction in liability for Taxes, enter into any material closing agreement, settle any material Tax claim or assessment relating to the Company or any Company Subsidiary or consent to any extension or waiver of the limitation period applicable to any material Tax claim or assessment relating to the Company or any Company Subsidiary;
(o) enter into, terminate, renew, amend or modify in any material respect or fail to renew (to the extent such contract can be unilaterally renewed by any Company) any Material Contract to which any Company is a party, or waiver, release or assign any material rights or claims thereunder or enter into any contract other than in the ordinary course of business consistent with past practice that would be material to the Businesses;
(xiii) settle, pay or discharge any litigation, investigation, arbitration, proceeding or other claim, liability or obligation (whether absolute, accrued, asserted or unasserted, contingent or otherwise) arising from the conduct of business except in the ordinary course of business consistent with past practice and except that the matters disclosed on Schedule 4.18 may be settled without the Purchaser’s consent provided such settlement does not impose any costs or restrictions on the Businesses after Closing other that as provided herein;
(xiv) make any change in the accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Business, except insofar as may have been required by a change in GAAP and after consulting with independent accounts;
(xv) modify or change enforce in any material respect, allow to expire or lapse or fail to renew respect any material permit or material insurance policy listed on Schedule 6.8;
(xvi) authorize any material capital expenditures not budgeted forCompany Material Contract; or
(xviip) agree or commit to take any action prohibited except as otherwise contemplated by this Section 6.2(bAgreement, including Sections 6.1(e) and 6.4, or as otherwise required by Law or any Governmental Entity, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiary (other than the Merger).
Appears in 1 contract
Conduct of Business Pending the Closing. Prior to the Closing,
(a) Sellers shall, and shall cause the Companies to (A) conduct the respective businesses of the Companies only in the ordinary course of business consistent with past practice, and (B) use commercially reasonable efforts to (1) preserve the present business operations, organization and goodwill of the Companies, and (2) preserve the present relationship with Persons having material business dealings with the Companies, and (C) make capital expenditures in accordance with its annual budget previously provided to Purchaser, provided that nothing in this Section 6.2(a) shall prevent the Companies from (x) paying dividends or other cash transfers or payments to or on behalf of any Seller or any of its Affiliates, or (y) repaying any Indebtedness.
(b) Without limiting the generality of the foregoing except: (i) as set forth on Schedule 6.2 hereto, (ii) as expressly contemplated by the Seller Documents, (iii) as required by applicable Law, or (iv) with the prior written consent of Purchaser (not to be unreasonably withheld), Sellers shall not, and shall cause the Companies not to:
(i) transfer, issue, sell or dispose of any shares of capital stock or other securities of any Company or grant options, warrants, calls or other rights to purchase or otherwise acquire shares of the capital stock or other securities of any Company;
(ii) effect any recapitalization, reclassification, stock split or other change in the capitalization of any Company;
(iii) enter into any new line of business, discontinue any line of business or amend the certificate of incorporation or by-laws (or comparable organizational documents) of any Company;
(iv) except for (A) trade payables in the ordinary course of business, and (B) amounts that will be repaid at or prior to the Effective Time, incur or increase any Indebtedness (other than Indebtedness that will be paid off at or prior to Closing), or become the guarantor, surety, endorser or otherwise liable (whether directly, contingently or otherwise) for any debt, obligation or liability (contingent or otherwise) of any other Person (except for another Company);
(v) subject any of the properties or assets (whether tangible or intangible) of any Company to any Lien (except for Permitted Exceptions) that will not be removed at or prior to Closing;
(vi) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any properties, assets or equity interests in any Person, or sell, assign, transfer, convey, lease or otherwise dispose of any of the properties or assets (except for the purchase of raw materials or the sale of inventory for fair consideration in the ordinary course of business consistent with past practice) of any Company for which the aggregate consideration paid or payable is in excess of $1,000,000;
(vii) (A) grant any material increase in the compensation of officers and directors of any Company, or make any general uniform increase in the compensation of Current Employees of the Companies, except as required by Contracts or pursuant to and consistent with existing plans or programs that have been disclosed to Purchaser, (B) grant any material bonus, benefit or other direct or indirect compensation to any employee, director or consultant of any Company, except as required by Contracts that have been disclosed to Purchaser, pursuant to and consistent with existing plans or programs, (C) enter into or amend any material Company Plan or any other severance, termination, retention, deferred compensation, bonus or other incentive compensation, profit sharing, stock option, stock appreciation right, restricted stock, stock equivalent, stock purchase, pension, retirement, medical, hospitalization, life or other insurance or other employee benefit plan for the benefit of the officers, directors, and/or employees of any Company, or (D) enter into any employment agreement with any person that provides for annual base salary in excess of $150,000;
(viii) except for transfers of cash or borrowings pursuant to normal cash management practices, permit any Company to make any investments in or loans to, or pay any fees or expenses to, or enter into or modify any Contract with, any Seller or any Affiliate of any Seller;
(ix) permit any Company to enter into or agree to enter into any merger or consolidation with any other Person or make any loans, advances or capital contributions to, or investments in, any other Person;
(x) with respect to any Company, settle or compromise any Tax Claim, or waive or extend the statute of limitations in respect of any Taxes, unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) or is required by Law;
(xi) make or rescind any express or deemed election relating to Taxes of any Company (except in accordance with past practice) unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) or would be required by applicable Law;
(xii) except in the ordinary course of business, modify, amend, terminate or fail to renew (to the extent such contract can be unilaterally renewed by any Company) any Material Contract to which any Company is a party, or waiver, release or assign any material rights or claims thereunder or enter into any contract other than in the ordinary course of business consistent with past practice that would be material to the Businesses;
(xiii) settle, pay or discharge any litigation, investigation, arbitration, proceeding or other claim, liability or obligation (whether absolute, accrued, asserted or unasserted, contingent or otherwise) arising from the conduct of business except in the ordinary course of business consistent with past practice and except that the matters disclosed on Schedule 4.18 may be settled without the Purchaser’s 's consent provided such settlement does not impose any costs or restrictions on the Businesses after Closing other that as provided herein;
(xiv) make any change in the accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Business, except insofar as may have been required by a change in GAAP and after consulting with independent accounts;
(xv) modify or change in any material respect, allow to expire or lapse or fail to renew any material permit or material insurance policy listed on Schedule 6.8;
(xvi) authorize any material capital expenditures not budgeted for; or
(xvii) agree or commit to take any action prohibited by this Section 6.2(b).
Appears in 1 contract
Conduct of Business Pending the Closing. Prior to the Closing,
(a) Sellers shall, and shall cause the Companies to (A) conduct the respective businesses of the Companies only in the ordinary course of business consistent with past practice, and (B) use commercially reasonable efforts to (1) preserve the present business operations, organization and goodwill of the Companies, and (2) preserve the present relationship with Persons having material business dealings with the Companies, and (C) make capital expenditures in accordance with its annual budget previously provided to Purchaser, provided that nothing in this Section 6.2(a) shall prevent the Companies from (x) paying dividends or other cash transfers or payments to or on behalf of any Seller or any of its Affiliates, or (y) repaying any Indebtedness.
(b) Without limiting the generality of the foregoing except: (i) as set forth on Schedule 6.2 hereto, (ii) as expressly contemplated by the Seller Documents, (iii) as required by applicable Law, or (iv) Except with the prior written consent of Purchaser the Offeror (which shall not to be unreasonably withheld), Sellers shall notconditioned or delayed) or as expressly contemplated by this Agreement, or as set forth in Section 5.4 of the Company Disclosure Schedule, or as mandated by Applicable Law, as between the Signing Date and the Closing Date:
(a) the Company undertakes to, and shall cause the Companies not to:
(i) transfer, issue, sell or dispose each of any shares of capital stock or other securities of any Company or grant options, warrants, calls or other rights to purchase or otherwise acquire shares of the capital stock or other securities of any Company;
(ii) effect any recapitalization, reclassification, stock split or other change in the capitalization of any Company;
(iii) enter into any new line of business, discontinue any line of business or amend the certificate of incorporation or by-laws (or comparable organizational documents) of any Company;
(iv) except for (A) trade payables in the ordinary course of business, and (B) amounts that will be repaid at or prior to the Effective Time, incur or increase any Indebtedness (other than Indebtedness that will be paid off at or prior to Closing), or become the guarantor, surety, endorser or otherwise liable (whether directly, contingently or otherwise) for any debt, obligation or liability (contingent or otherwise) of any other Person (except for another Company);
(v) subject any of the properties or assets (whether tangible or intangible) of any Company to any Lien (except for Permitted Exceptions) that will not be removed at or prior to Closing;
(vi) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any properties, assets or equity interests in any Person, or sell, assign, transfer, convey, lease or otherwise dispose of any of the properties or assets (except for the purchase of raw materials or the sale of inventory for fair consideration in the ordinary course of business consistent with past practice) of any Company for which the aggregate consideration paid or payable is in excess of $1,000,000;
(vii) (A) grant any material increase in the compensation of officers and directors of any Company, or make any general uniform increase in the compensation of Current Employees of the Companies, except as required by Contracts or pursuant to and consistent with existing plans or programs that have been disclosed to Purchaser, (B) grant any material bonus, benefit or other direct or indirect compensation to any employee, director or consultant of any Company, except as required by Contracts that have been disclosed to Purchaser, pursuant to and consistent with existing plans or programs, (C) enter into or amend any material Company Plan or any other severance, termination, retention, deferred compensation, bonus or other incentive compensation, profit sharing, stock option, stock appreciation right, restricted stock, stock equivalent, stock purchase, pension, retirement, medical, hospitalization, life or other insurance or other employee benefit plan for the benefit of the officers, directors, and/or employees of any Company, or (D) enter into any employment agreement with any person that provides for annual base salary in excess of $150,000;
(viii) except for transfers of cash or borrowings pursuant to normal cash management practices, permit any Company to make any investments in or loans its subsidiaries to, or pay any fees or expenses to, or enter into or modify any Contract with, any Seller or any Affiliate of any Seller;
(ix) permit any Company to enter into or agree to enter into any merger or consolidation with any other Person or make any loans, advances or capital contributions to, or investments in, any other Person;
(x) with respect to any Company, settle or compromise any Tax Claim, or waive or extend the statute of limitations in respect of any Taxes, unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) or is required by Law;
(xi) make or rescind any express or deemed election relating to Taxes of any Company (except in accordance with past practice) unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) or would be required by applicable Law;
(xii) except in the ordinary course of business, modify, amend, terminate or fail to renew (to the extent such contract can be unilaterally renewed by any Company) any Material Contract to which any Company is a party, or waiver, release or assign any material rights or claims thereunder or enter into any contract other than in the ordinary course of business consistent with past practice that would be material to the Businesses;
(xiii) settle, pay or discharge any litigation, investigation, arbitration, proceeding or other claim, liability or obligation (whether absolute, accrued, asserted or unasserted, contingent or otherwise) arising from the conduct of business except their respective businesses only in the ordinary course of business consistent with past practice and except that the matters disclosed in all cases based on Schedule 4.18 may be settled without the Purchaser’s consent provided such settlement does not impose any costs or restrictions on the Businesses after Closing other that as provided hereinprudent business judgment;
(xivb) the Company shall provide the Offeror with advance notice of all scheduled meetings, conferences, and discussions by the Company with regulatory authorities concerning any regulatory matters relating to the Covered Products not later than ten (10) days after the Company receives notice of the scheduling of such meeting, conference, or discussion, unless circumstances necessitate a shorter period. Upon the Offeror’s written request, the Company and the Offeror will coordinate to permit one (1) representative of the Offeror to accompany the Company in an observational role to any such scheduled meetings, subject to Applicable Law and only to the extent permitted by the applicable regulatory authority. The Company and the Offeror shall use reasonable efforts to agree in advance on the scheduling of such meetings, conferences and discussions with any regulatory authority and on the agenda and objectives to be accomplished at any such meetings, conferences and discussions. Each party shall provide all such assistance as is reasonably requested by the other in the preparation and conduct of any such scheduled meetings, conferences and discussions, including any inspections by regulatory authorities with respect to any Covered Product. Upon the Offeror’s request, the Company shall (a) provide the Offeror with a reasonable opportunity to review and provide comments with respect to (and the Company will consider in good faith any such comments), any material filing proposed to be made by or on behalf of any of the Company, and any material correspondence or other material communication proposed to be submitted or otherwise transmitted to a regulatory authority by or on behalf of any of the Company relating to a Covered Product, and (b) keep the Offeror promptly informed of any material communication (written or oral) with or from any regulatory authority; provided, however, that the Company shall make all decisions regarding these issues prior to the Closing Date. It being understood, however, that nothing contained in this Section 5.3(b) is intended to give the Offeror, directly or indirectly, the right to control or direct the operations of the Company or any of its subsidiaries prior to the Closing Date; and
(c) without limiting the generality of the foregoing, unless previously agreed by the Offeror in writing, the Company undertakes to, and shall cause each of its subsidiaries to undertake to, refrain from making or implementing:
(i) any material changes in its business (including without limitation termination by it of Key Employees, suppliers, resellers or other material business relationships) or corporate structure; and/or
(ii) any hiring of new employees other than with respect to employees having initial annual base compensation not exceeding $100,000 USD (or its equivalent); and/or
(iii) any material corporate transactions, investments, loans, incurrence of indebtedness for borrowed money, incurrence of liens or other encumbrances on material assets, acquisitions or divestments outside the ordinary course of business; and/or
(iv) any agreements or commitments that are not entered into on arms’ length terms or in the ordinary course of business; and/or
(v) any material amendments to, waivers under, or termination of any Material Contracts other than in the ordinary course of business, or any new agreement that contains (A) a change in control provision that would be unfavorably implicated by the transactions contemplated hereunder, (B) any provision that would restrict the Company or its subsidiaries or, following the Closing Date, its affiliates from competing in any line of business, developing any products or clinical candidates or hiring the employees of a competitor, (C) any license of material intellectual property, (D) any obligation to make contingent payments based, directly or indirectly, on future product sales, regulatory approvals or any material transaction or (E) otherwise relates to the exploitation of any material Intellectual Property owned by the Company or its subsidiaries; and/or
(vi) any change of their articles of association, by-laws or other constituting documents or any material change to their accounting principles or practices other than such arising out of or relating to any recent or proposed changes of EU, Finnish or U.S. laws and regulations; and/or
(vii) any commencement, settlement or compromise of any material legal proceedings or of claims against third parties; and/or
(viii) any act or omission that would reasonably be expected to result in the abandonment, encumbrance (including any grant or exercise of any option or other contingent right), assignment or other conveyance of title (in whole or in part) of, or an exclusive license or any other grant of any right or other license (including any covenant not to xxx) to, any material Company Intellectual Property, other than non-exclusive licenses granted in the ordinary course of business consistent with past practice for research and development purposes; and/or
(1) any distribution of dividends or other funds from the Company or its subsidiaries (other than distributions of dividends or other funds from wholly-owned subsidiaries of the Company to the Company or to other wholly-owned subsidiaries of the Company), (2) a change in the number of shares issued or outstanding, share capital or rights to acquire share capital of the Company or its subsidiaries, including without limitation by reclassification, recapitalisation, stock split, combination, repurchase, redemption or issuance of any shares or securities exercisable for, convertible into or exchangeable for shares in the Company or in its subsidiaries (other than upon the exercise or conversion of Outstanding Equity Instruments outstanding on the date hereof or issued after the date hereof in compliance with this Agreement), (3) any sale, pledge, transfer or other disposal or encumbrance of any shares in the Company or in any of its subsidiaries that are held or obtained by the Company or any of its subsidiaries (other than upon the exercise or conversion of Outstanding Equity Instruments outstanding on the date hereof or issued after the date hereof in compliance with this Agreement), and/or (4) any grant, allocation, sale, transfer or disposal of any option rights held by the Company or any of its subsidiaries or of any other shares or securities exercisable for, convertible into or exchangeable for shares in the Company or in any of its subsidiaries; and/or
(x) any change in the accounting methodscurrent or future agreements with, principles compensation of or practices materially affecting the reported consolidated assetsother benefits (including without limitation by way of synthetic options, liabilities bonus, insurance, retention, severance or results of operations pension arrangements) of the Business, except insofar as may have been required Board of Directors of the Company and/or each of the Persons employed by a change in GAAP and after consulting or serving the Company or its subsidiaries with independent accounts;annual base compensation exceeding $100,000 USD (or its equivalent); and/or
(xvxi) modify any action that would have the effect of increasing the liability for Taxes of the Company or change in any material respect, allow to expire or lapse or fail to renew of its subsidiaries for any material permit or material insurance policy listed on Schedule 6.8;period ending after the Closing Date; and/or
(xvixii) authorize any material capital expenditures not budgeted for; or
(xvii) agree agreement or commit commitment to take do any action prohibited by this Section 6.2(b)of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Closing. Prior Each Seller covenants and agrees that, between the date hereof and the Closing Date, except as expressly required or permitted by this Agreement or unless Purchaser shall otherwise agree in writing in advance, (i) Sellers shall cause each of the Target Companies to conduct and shall conduct the Businesses only in, and (ii) shall not permit any of the Target Companies to and shall not, take any action except in, the ordinary course of business and in a manner consistent with past practice and in compliance with applicable laws. Each Seller shall use its commercially reasonable efforts to preserve substantially intact the business organization and assets of each of the Target Companies and the Businesses (including the Transferred Assets), to keep available the services of the present officers, employees and consultants of each of the Target Companies and the Businesses, to maintain in effect the Material Agreements and to preserve the present material relationships of each of the Target Companies and the Businesses with customers, licensees, suppliers, subcontractors and other Persons with which each of the Target Companies or the Businesses have business relations. By way of amplification and not limitation, except to the Closing,extent expressly permitted or contemplated by this Agreement and except as disclosed on Section 4.1 of the Sellers Disclosure Schedule, none of the Target Companies nor, with respect to the Businesses, Sellers shall, between the date hereof and the Closing Date, directly or indirectly do, or propose to do, any of the following without the prior written consent of Purchaser:
(a) Sellers shall, and shall cause amend or otherwise change the Companies to (A) conduct the respective businesses Certificate of Incorporation or Bylaws or equivalent organizational document of any of the Target Companies only or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure of any of the Target Companies;
(b) issue, grant, sell, transfer, deliver, pledge, promise, dispose of or encumber, or authorize the issuance, grant, sale, transfer, deliverance, pledge, promise, disposition or encumbrance of, or alter or modify the terms of rights or obligations under any shares of capital stock of any class (common or preferred), or any options, warrants, convertible or exchangeable securities or other rights of any kind to acquire any shares of capital stock or any other ownership interest or stock-based rights of any of the Target Companies;
(c) declare, set aside for payment or pay any dividend or other distribution (whether in stock or property or any combination thereof), other than in cash, in respect of any of the Target Companies' capital stock; split, combine, subdivide or reclassify any of the Target Companies' capital stock, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, shares of the Target Companies' capital stock; or amend the terms of, repurchase, redeem or otherwise acquire, or permit any Subsidiary to repurchase, redeem or otherwise acquire, any of the Target Companies' securities;
(d) sell, transfer, deliver, lease, license, sublicense, mortgage, pledge, encumber or otherwise dispose of (in whole or in part), or create, incur, assume or subject any Encumbrance on any of the assets of any of the Target Companies or any of the Transferred Assets, except for dispositions of assets in the ordinary course of business and in a manner consistent with past practice, practice and (B) use commercially reasonable efforts to (1) preserve the present business operations, organization and goodwill of the Companies, and (2) preserve the present relationship with Persons having material business dealings with the Companies, and (C) make capital expenditures in accordance with its annual budget previously provided to Purchaser, provided that nothing in this Section 6.2(a) shall prevent the Companies from (x) paying dividends or other cash transfers or payments to or on behalf of any Seller or any of its Affiliates, or (y) repaying any Indebtedness.
(b) Without limiting the generality of the foregoing except: (i) as set forth on Schedule 6.2 hereto, (ii) as expressly contemplated by the Seller Documents, (iii) as required by applicable Law, or (iv) with the prior written consent of Purchaser (not to be unreasonably withheld), Sellers shall not, and shall cause the Companies not to:
(i) transfer, issue, sell or dispose of any shares of capital stock or other securities of any Company or grant options, warrants, calls or other rights to purchase or otherwise acquire shares of the capital stock or other securities of any Company;
(ii) effect any recapitalization, reclassification, stock split or other change in the capitalization of any Company;
(iii) enter into any new line of business, discontinue any line of business or amend the certificate of incorporation or by-laws (or comparable organizational documents) of any Company;
(iv) except for (A) trade payables licenses to use Company IP granted in the ordinary course of business, business and (B) amounts that will be repaid at or prior to the Effective Time, incur or increase any Indebtedness (other than Indebtedness that will be paid off at or prior to Closing), or become the guarantor, surety, endorser or otherwise liable (whether directly, contingently or otherwise) for any debt, obligation or liability (contingent or otherwise) of any other Person (except for another Company)consistent with past practice;
(v) subject any of the properties or assets (whether tangible or intangible) of any Company to any Lien (except for Permitted Exceptions) that will not be removed at or prior to Closing;
(vie) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) or organize any propertiescorporation, assets limited liability company, partnership, joint venture, trust or equity interests in other entity or any business organization or division thereof; cause any of the Target Companies to incur any indebtedness for borrowed money (other than under Parent's Credit Agreement which obligations will be released at the Closing with respect to the Target Companies and the Transferred Assets) or issue any debt securities or any warrants or rights to acquire any debt security or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any Person, or sellmake any loans, assignadvances, transfercapital contributions or enter into any financial commitments; or authorize or make any capital expenditures which are, conveyin the aggregate, lease or otherwise dispose in excess of $100,000 taken as a whole for any of the properties Target Companies and, with respect to the Businesses, any Seller;
(i) hire or assets terminate any Business Employee or Target Business Employee (except for the purchase of raw materials or the sale of inventory for fair consideration in the ordinary course of business and consistent with past practice), (ii) of any Company for which the aggregate consideration paid or payable is in excess of $1,000,000;
(vii) (A) grant any material increase in the compensation of officers and directors of or fringe benefits (including, without limitation, bonus) payable or to become payable to any CompanyBusiness Employee, Target Business Employee, or make any general uniform increase in the compensation of Current Employees current or former director, officer, or employee of the Companies, except as required by Contracts or pursuant to and consistent with existing plans or programs that have been disclosed to Purchaser, Businesses (B) grant any material bonus, benefit or other direct or indirect compensation to any employee, director or consultant of any Company, except as required by Contracts that have been disclosed to Purchaser, pursuant to and consistent with existing plans or programs, (C) enter into or amend any material Company Plan or any other severance, termination, retention, deferred compensation, bonus or other incentive compensation, profit sharing, stock option, stock appreciation right, restricted stock, stock equivalent, stock purchase, pension, retirement, medical, hospitalization, life or other insurance or other employee benefit plan for the benefit of the officers, directors, and/or employees of any Company, or (D) enter into any employment agreement with any person that provides for annual base salary in excess of $150,000;
(viii) except for transfers of cash increases in salary or borrowings pursuant to normal cash management practiceswages, permit any Company to make any investments in or loans to, or pay any fees or expenses to, or enter into or modify any Contract with, any Seller or any Affiliate of any Seller;
(ix) permit any Company to enter into or agree to enter into any merger or consolidation with any other Person or make any loans, advances or capital contributions to, or investments in, any other Person;
(x) with respect to any Company, settle or compromise any Tax Claim, or waive or extend the statute of limitations in respect of any Taxes, unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) or is required by Law;
(xi) make or rescind any express or deemed election relating to Taxes of any Company (except in accordance with past practice) unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) or would be required by applicable Law;
(xii) except in the ordinary course of business, modify, amend, terminate or fail to renew (to the extent such contract can be unilaterally renewed by any Company) any Material Contract to which any Company is a party, or waiver, release or assign any material rights or claims thereunder or enter into any contract other than in the ordinary course of business consistent with past practice or the payment of accrued or earned but unpaid bonuses), (iii) grant any severance or termination pay to any Business Employee, Target Business Employee, or present or former director, officer or employee of the Businesses, (iv) loan or advance any money or other asset or property to any Business Employee, Target Business Employee, or current or former director, officer or employee of the Businesses (other than business expense reimbursements in the ordinary course of business consistent with past practice pursuant to the expense reimbursement policy of either Seller or any Target Company), (v) establish, adopt, enter into, amend or terminate any Employee Plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Employee Plan if it were in existence as of the date of this Agreement, (vi) grant any equity or equity-based awards, other than those related to equity of Parent in the ordinary course consistent with past practice, or (vii) allow for the commencement of any new offering periods under any employee stock purchase plans;
(g) change any accounting policies or procedures (including procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable) unless required by a change in GAAP after the date hereof;
(i) other than in the ordinary course consistent with past practice, enter into any agreement that if entered into prior to the date hereof would be a Material Agreement set forth in Section 2.7 of the Sellers Disclosure Schedule; (ii) modify, amend in any material respect, transfer or terminate any Material Agreement or waive, release or assign any rights or claims thereto or thereunder; (iii) enter into or extend any lease with respect to Real Property with any third party; (iv) modify, amend or transfer in any material respect or terminate any license agreement, standstill or confidentiality agreement with any third party, or waive, release or assign any rights or claims thereto or thereunder; or (v) enter into, modify or amend any Contract to provide exclusive rights or obligations;
(i) make or change or cause the Target Companies to make or change any Tax election, file any amended Tax Return, or settle or compromise any federal, state, local or foreign income tax liability or agree to an extension of a statute of limitations;
(j) pay, discharge, satisfy or settle any Litigation or waive, assign or release any material rights or claims except, in the case of Litigation, any Litigation such actions would not: (A) impose any injunctive or similar Order on any of the Target Companies or with respect to the Businesses, any Seller, or restrict in any way any of the Target Companies, any of the Businesses or any of the Transferred Assets or (B) exceed $75,000 in cost or value to any of the Target Companies or, with respect to the Businesses, any Seller;
(xiiik) settlepay, pay discharge or discharge satisfy any litigation, investigation, arbitration, proceeding liabilities or other claim, liability or obligation obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), except (i) arising from the conduct of business except in the ordinary course of business consistent with past practice and except that in an amount or value not exceeding $100,000 in any instance or series of related instances or $200,000 in the matters disclosed on Schedule 4.18 may be settled without aggregate or (ii) in accordance with their terms as in effect as of the Purchaser’s consent provided such settlement does not impose any costs or restrictions on the Businesses after Closing other that as provided hereindate hereof;
(xivl) make engage in, enter into or amend any change in the accounting methodsContract, principles transaction, indebtedness or practices materially affecting the reported consolidated assetsother arrangement with, liabilities directly or results of operations indirectly, any of the Businessdirectors, officers, stockholders or other Affiliates of any of the Target Companies or, in connection with the Businesses, Sellers, or any of their respective Affiliates or family members including any Contract, transaction, Indebtedness or other arrangement with any Affiliate or any other person covered under Item 404 of Regulation S-K under the Securities Act of 1933, as amended, that would be required to be described under such Item 404, except insofar for (i) amounts due as may have been required by a change normal salaries, bonuses and benefits and in GAAP reimbursement of ordinary expenses and after consulting with independent accounts(ii) those items existing as of the date hereof and listed in Section 4.1(l) of the Sellers Disclosure Schedule;
(xvm) modify or change in any material respect, allow to expire or lapse or fail to renew any material permit or material maintain in full force and effect all self-insurance policy listed on Schedule 6.8and insurance, as the case may be, currently in effect;
(xvin) authorize authorize, recommend, propose or announce an intention to do any material capital expenditures not budgeted forof the foregoing, or agree or enter into or amend any Contract or arrangement to do any of the foregoing; or
(xviio) agree other than in the ordinary course of business, based upon reasonable business judgment, fail to protect, maintain, police or commit to take enforce any action prohibited by this Section 6.2(b)material Company IP.
Appears in 1 contract
Conduct of Business Pending the Closing. Prior From the date of this Agreement to the Closing,
(a) Sellers shall, and Seller shall cause operate the Companies to (A) conduct the respective businesses of the Companies Business only in the usual, regular and ordinary course of business and in a manner consistent with past practice, and (B) shall use all commercially reasonable efforts to (1i) preserve the intact its present business operationsorganization, organization and goodwill of the Companies, and (2ii) preserve the present relationship its goodwill and advantageous business relationships with customers, suppliers, employees and other Persons having material business dealings with the CompaniesBusiness, (iii) prevent any event that could result in Material Adverse Change, (iv) perform all of Seller's obligations under the Transferred Contracts, and (Cv) make capital expenditures not permit any action or omission that would cause any of their representations or warranties contained in this Agreement to become inaccurate or any of their covenants to be breached, all to the end that Business as a going concern shall be unimpaired and transferred to Purchaser at the Closing in accordance with its annual budget previously provided to Purchaser, provided that nothing in the terms of this Section 6.2(a) shall prevent the Companies from (x) paying dividends or other cash transfers or payments to or on behalf of any Seller or any of its Affiliates, or (y) repaying any Indebtedness.
(b) Agreement. Without limiting the generality of the foregoing except: (i) as set forth on Schedule 6.2 heretoforegoing, (ii) as expressly contemplated by the Seller Documentsshall not, (iii) as required by applicable Law, or (iv) with without the prior written consent of Purchaser (not to be unreasonably withheld), Sellers shall not, and shall cause the Companies not toPurchaser:
(ia) transfer, issue, sell or dispose of any shares of capital stock or other securities of any Company or grant options, warrants, calls or other rights to purchase or otherwise acquire shares of the capital stock or other securities of any Company;
(ii) effect any recapitalization, reclassification, stock split or other change in the capitalization of any Company;
(iii) enter into any new line of business, discontinue any line of business or amend the certificate of incorporation or by-laws (or comparable organizational documents) of any Company;
(iv) except for (A) trade payables in the ordinary course of business, and (B) amounts that will be repaid at or prior to the Effective Time, incur or increase any Indebtedness (other than Indebtedness that will be paid off at or prior to Closing), or become the guarantor, surety, endorser or otherwise liable (whether directly, contingently or otherwise) for any debt, obligation or liability (contingent or otherwise) of any other Person (except for another Company);
(v) subject any of the properties or assets (whether tangible or intangible) of any Company to any Lien (except for Permitted Exceptions) that will not be removed at or prior to Closing;
(vi) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any properties, assets or equity interests in any Person, or sell, assign, transfer, convey, lease assign or otherwise dispose of any of the properties or assets (except for the purchase of raw materials or the sale of inventory for fair consideration in the ordinary course of business consistent with past practice) of any Company for which the aggregate consideration paid or payable is in excess of $1,000,000Transferred Assets;
(viib) (A) grant any material increase in suffer or permit the compensation of officers and directors creation of any Company, or make Lien on any general uniform increase in the compensation of Current Employees of the CompaniesTransferred Assets;
(c) modify, except as required by Contracts amend or pursuant to and consistent with existing plans terminate any Transferred Contract;
(d) waive, release, cancel or programs that have been disclosed to Purchaser, assign any rights or claims under any Transferred Contract;
(B) grant any material bonus, benefit or other direct or indirect compensation to any employee, director or consultant of any Company, except as required by Contracts that have been disclosed to Purchaser, pursuant to and consistent with existing plans or programs, (Ce) enter into into, adopt, amend or amend terminate any material Company Plan or any other severance, termination, retention, deferred compensation, bonus or other incentive compensationbonus, profit sharing, compensation, termination stock option, stock appreciation right, restricted stock, stock equivalent, stock purchaseperformance unit, pension, retirement, medicaldeferred compensation, hospitalizationemployment, life or other insurance severance or other employee benefit plan agreement, trust, plan, fund or other arrangement for the benefit or welfare of any current or former director, officer, consultant or employees, or increase in any manner the compensation or fringe benefits of any current or former director, officer, consultant or employee or pay any benefit not required by any existing plan and arrangement or enter into any Contract or arrangement to do any of the officersforegoing;
(f) except for Contracts in respect to purchases of scaffold rental fleet in the ordinary and usual course of business and consistent with past practice, directorsincur any obligation or enter into any Contract or arrangement that (i) requires a payment by any Person in excess of, and/or employees or a series of payments that in the aggregate exceed, $10,000, or provides for the delivery of goods or performance of services, or any combination thereof, having a value in excess of $10,000, (ii) has a term, or requires the performance of any Companyobligations by Seller or the Shareholders over a period, in excess of one year, or (Diii) when taken together with all such Contracts, requires payments in excess of $50,000 in the aggregate, or provides for the delivery of goods or performance of services, or any combination thereof, having a value in excess of $50,000 in the aggregate;
(g) enter into any employment agreement with any person that provides for annual base salary Contract in respect to purchases of scaffold rental fleet in excess of $150,000100,000 or, when taken together with all such Contracts, $300,000;
(viiih) except for transfers enter into any Contract in respect to "re-renting" or otherwise renting additional equipment to the extent that, when taken together with all such Contracts, payments under such Contracts exceed $30,000 per month;
(i) enter into any Contract with a sales representative, manufacturer's representative, distributor, dealer, broker, sales agency, advertising agency or other Person engaged in sales, distributing or promotional activities, or any Contract to act as one of cash or borrowings pursuant to normal cash management practices, permit the foregoing on behalf of any Company to Person;
(j) make any investments distributions to its shareholders, other than distributions for federal and state income Taxes payable by such shareholders as a result of the activities of the Business;
(k) alter through merger, liquidation, reorganization, restructuring or in or loans to, or pay any fees or expenses to, or enter into or modify any Contract with, any Seller or any Affiliate other fashion the capital structure of any Seller;
(ixl) permit effect any Company to enter into change in Seller's methods, systems, policies, principles or agree to enter into any merger or consolidation with any other Person or make any loanspractices of accounting, advances or capital contributions to, or investments in, any other Personexcept as may be required under GAAP;
(xm) with respect fail to maintain the status of Seller as an S corporation for federal income Tax purposes, make, revoke or amend any CompanyTax election, change any method of Tax accounting or Tax procedure or practice or settle or compromise any claim relating to Taxes with respect to the Transferred Assets or income attributable therefrom if such action shall be binding on Purchaser after the Closing Date. Seller shall not (i) file or cause to be filed any material amended Tax ClaimReturn, (ii) file or cause to be filed a material claim for refund of Taxes previously paid, or (iii) waive or extend the statute of limitations with respect of any Taxes relating to the Transferred Assets or income attributable therefrom;
(n) change collection or payment terms, including offering discounts or other incentives for early payment, premiums for late payment or otherwise change the policies and practices of the Business in respect of any Taxes, unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) collection of receivables or is required by Law;
(xi) make or rescind any express or deemed election relating to Taxes payment of any Company (except in accordance with past practice) unless doing so would not have an adverse effect on such Company after the Closing Date (other than an adverse effect for which the Sellers agree in writing to indemnify Purchaser and its Affiliates, including the Companies) or would be required by applicable Law;
(xii) except in the ordinary course of business, modify, amend, terminate or fail to renew (to the extent such contract can be unilaterally renewed by any Company) any Material Contract to which any Company is a party, or waiver, release or assign any material rights or claims thereunder or enter into any contract other than in the ordinary course of business consistent with past practice that would be material to the Businesses;
(xiii) settle, pay or discharge any litigation, investigation, arbitration, proceeding or other claim, liability or obligation (whether absolute, accrued, asserted or unasserted, contingent or otherwise) arising from the conduct of business except in the ordinary course of business consistent with past practice and except that the matters disclosed on Schedule 4.18 may be settled without the Purchaser’s consent provided such settlement does not impose any costs or restrictions on the Businesses after Closing other that as provided herein;
(xiv) make any change in the accounting methods, principles or practices materially affecting the reported consolidated assets, liabilities or results of operations of the Business, except insofar as may have been required by a change in GAAP and after consulting with independent accounts;
(xv) modify or change in any material respect, allow to expire or lapse or fail to renew any material permit or material insurance policy listed on Schedule 6.8;
(xvi) authorize any material capital expenditures not budgeted forpayables; or
(xviio) authorize, commit or agree or commit to take do any action prohibited of the foregoing. Any Contract that is entered into by Seller without breaching this Section 6.2(b)5.01 shall be included in the Transferred Assets, and the Disclosure Memorandum shall be updated promptly by Seller to include any such Contract. Any Contract that is entered into by Seller in violation of this Section 5.01 shall be an Excluded Asset, shall constitute an Excluded Liability and shall not be deemed to be included on any schedule of the Disclosure Memorandum.
Appears in 1 contract
Samples: Asset Purchase Agreement (Brand Energy & Infrastructure Services, Inc)
