Conduct of Business Pending the Merger. 4.1 Conduct of Business of the Company Pending the Merger. (a) The Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by this Agreement or unless Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, keep available the services of their officers, employees and consultants and maintain in effect all Company Material Contracts. By way of amplification and not limitation, except as expressly permitted by this Agreement, neither the Company nor any of its Subsidiaries shall , during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent: (i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise; (ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Company or any of its Subsidiaries; (iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries; (iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice; (v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company); (vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests; (vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice; (viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof; (ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement; (x) authorize any capital expenditures in excess of $175,000 in the aggregate; (xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees; (xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger; (xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto; (xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights; (xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies; (xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code; (xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or (xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2. 4.2 Conduct of Business of Parent Pending the Merger. (a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company: (i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise; (ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement; (iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent; (iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets; (v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests; (vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests; (vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof; (viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments; (ix) authorize any capital expenditures; (x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees; (xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP; (xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets; (xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto; (xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto; (xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies; (xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code; (xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; (xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or (xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Connectiv Corp), Merger Agreement (Connectiv Corp)
Conduct of Business Pending the Merger. 4.1 SECTION 5.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, between . From the date hereof and of this Agreement until the earlier to occur of the Effective Time or such earlier time as and the valid termination of this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")VIII, except as expressly otherwise contemplated by this Agreement, as required under the Management Agreements and the Franchise Agreements, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Letter, as required by this Agreement applicable Laws, as required by or unless to the extent commercially reasonable in response to any COVID-19 Measures (so long as the Company keeps Parent reasonably informed of, and to the extent reasonably practicable, consults with Parent prior to the taking of any material action with respect to such COVID-19 Measures) or as Parent shall otherwise consent in writing, writing (which consent shall not be unreasonably withheld, each of conditioned or delayed), (a) the Company and its Subsidiaries:
(i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to conduct the business of the Company and its subsidiaries in the ordinary and usual course of business and maintain the status of the Company as a REIT and shall use its commercially reasonable efforts to preserve substantially intact its business organizationorganization and material business relationships with Governmental Entities, properties customers, suppliers, creditors, and assetslessors, keep available and (b) without limiting the services of their officersforegoing, employees and consultants and maintain in effect all Company Material Contracts. By way of amplification and not limitation, except as expressly permitted by this Agreement, neither the Company nor any shall not and shall cause each of its Subsidiaries shall , during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parentsubsidiaries not to:
(i) amend its Certificate of Incorporation, or otherwise change the Company Charter or Company Bylaws or other equivalent organizational documents, materially amend or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwisematerially change the applicable governing instruments of any subsidiary of the Company;
(ii) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any Person, corporation, partnership or other business organization or division thereof, in each case, except for (A) purchases of inventory and other assets (other than real property) in the ordinary course of business or pursuant to existing Contracts, (B) acquisitions or investments (other than real property) with a fair market value or purchase price not to exceed $5 million in the aggregate, or (C) any wholly owned subsidiaries of the Company;
(iii) grant, issue, sell, transferencumber, pledge, pledge or dispose of (or encumber authorize the grant, issuance, sale, encumbrance, pledge or disposition of), any shares of capital stock of any classstock, voting securities or other ownership interest, or any puts, calls, options, warrants, convertible securities or other rights or commitments of any kind to acquire or receive any shares of capital stock, any voting securities or any other ownership interest (including stock appreciation rights, phantom stock or similar instruments), of the Company or any of its Subsidiariessubsidiaries (except (a) for the issuance of Shares upon the vesting or settlement of Stock Units and PSUs outstanding on the date hereof pursuant to the terms of such Company Equity Awards as in effect on the date hereof, or (b) for any issuance, sale or disposition to the Company or a wholly owned subsidiary of the Company by any wholly owned subsidiary of the Company );
(iiiiv) reclassify, combine, split, subdivide, redeem, repurchase purchase or otherwise acquire, directly or indirectly, acquire any shares of capital stock of the Company (except to satisfy applicable tax withholding upon the vesting of Restricted Stock or interest settlement of any Stock Units and PSUs outstanding on the date hereof, in each case, pursuant to the terms of such Company Equity Awards as in effect on the date hereof), or securities reclassify, combine, split or subdivide any capital stock or other ownership interests of any of its Subsidiariesthe Company’s wholly owned subsidiaries;
(ivv) except under the Company’s Credit Facilities, create or incur any Lien, other than Permitted Liens, in excess of $75 million of notional debt in the aggregate on any material assets of the Company or its subsidiaries, except for Liens that are required by or automatically effected by Contracts in place as of the date hereof;
(vi) make any loans or advances to any Person (other than the Company or any of its wholly owned subsidiaries);
(vii) sell or otherwise dispose of (whether by merger, consolidation or disposition of stock or assets or otherwise) any Person, corporation, partnership or other business organization or division thereof or otherwise sell, transferassign, pledgeexclusively license, allow to expire, or dispose of any assets, rights or encumber any material propertiesproperties other than (A) sales, facilities, dispositions or licensing of equipment or and/or inventory and other assets, excluding real property, in the ordinary course of business or pursuant to existing Contracts, (B) assignments of leases or sub-leases, in each case, in the ordinary course of business in connection with dispositions of assets that are otherwise permitted hereunder, (C) sales of obsolete assets in the ordinary course of business, (D) sales among the Company and its wholly owned subsidiaries or among the Company’s wholly owned subsidiaries or (E) sales of the properties set forth on Section 5.1(vii) of the Company Disclosure Letter;
(viii) declare, set aside, make or pay, or set a record date for, any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except (A) the payment of dividends on Company Preferred Stock in accordance with their respective terms as set forth in the Company Charter, or the redemption of Company Preferred Stock in accordance with its terms as set forth in the Company Charter, (B) for any dividend or distribution by a wholly owned subsidiary of the Company to the Company or any wholly owned subsidiary of the Company, (C) dividends or distributions declared, set aside or paid by the Company or any of its wholly owned subsidiaries to any venture partners in any joint venture pursuant to existing Contracts made available to Parent, and (D) for the declaration and payment by the Company of dividends or distributions in accordance with Section 6.17);
(ix) make or authorize any payment of, or accrual or commitment for, capital expenditures, except any such expenditure (A) within the thresholds set forth in Section 5.1(b)(ix) of the Company Disclosure Letter or as required pursuant to the Management Agreements or the Franchise Agreements in effect as of the date of this Agreement, (B) expenditures not in excess of $15 million (net of insurance proceeds) in the aggregate that the Company reasonably determines are necessary to avoid a material business interruption, maintain the ability to operate in the ordinary course, or maintain the safety and integrity of any asset or property in response to any emergency, force majeure event or unanticipated and subsequently discovered events, occurrences or developments, (C) paid by any wholly owned subsidiary of the Company to the Company or to any other wholly owned subsidiary of the Company or (D) for the maintenance and repair at existing Company Real Property in the ordinary course of business consistent with past practice;
(vA) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business, enter into any Contract that would have been a Material Contract under clauses Section 3.8(a)(i), Section 3.8(a)(ii), Section 3.8(a)(iii), Section 3.8(a)(iv), Section 3.8(a)(v), Section 3.8(a)(viii), Section 3.8(a)(ix), Section 3.8(a)(x)(B) or Section 3.8(a)(xiii) of Section 3.8(a) had it been entered into prior to this Agreement, amend or modify, or terminate any Material Contract other than (i) expirations and renewals of any such Contract in the ordinary course of business consistent in accordance with past practicethe terms thereof, (ii) non-exclusive licenses, covenants not to xxx, releases, waivers or other non-exclusive rights under Intellectual Property owned by the Company and its subsidiaries, (iii) any agreement among the Company and its wholly owned subsidiaries or among the Company’s wholly owned subsidiaries or (iv) the termination of any Management Agreement or Franchise Agreement in connection with the sale of a property otherwise permitted hereunder or a default by a counterparty thereunder or (B) amend or modify, or grant any material consent under, any Material Contract relating to any joint venture;
(viiixi) acquire (by merger, consolidation, acquisition except for intercompany loans between the Company and any of stock its subsidiaries or assets or otherwise) between any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt subsidiaries of the Company's Subsidiaries Company and for insurance premium financings pursuant to insurance agreements in effect as of the date hereof or entered into in the ordinary course of business) , incur indebtedness for borrowed money or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any PersonPerson (other than a subsidiary of the Company), or make any loansin each case, advances or enter into any financial commitmentsin excess of $1 million in the aggregate, except other than (A) indebtedness for borrowed money incurred in the ordinary course of business under the Company’s revolving credit facilities and other lines of credit existing as otherwise permitted under of the date of this Agreement but in any loan or credit agreement event not to which exceed $2 million in the aggregate at any time outstanding, (B) guarantees by the Company or any subsidiary of the Company of indebtedness of the Company or any other subsidiary of the Company the incurrence of which is not otherwise prohibited by this Agreement, (C) indebtedness incurred in connection with a refinancing or replacement of existing indebtedness (but in all cases which refinancing or replacement shall not increase the aggregate amount of indebtedness permitted to be outstanding thereunder and in each case on customary commercial terms consistent in all material respects with or more beneficial than the indebtedness being refinanced or replaced), (D) indebtedness incurred pursuant to letters of credit, performance bonds or other similar arrangements in the ordinary course of business, (E) interest, exchange rate and commodity swaps, options, futures, forward contracts and similar derivatives or other hedging Contracts, which are (1) not entered for speculative purposes and (2) entered into in the ordinary course of business, or (F) indebtedness incurred among the Company and its wholly owned subsidiaries or among the Company’s wholly owned subsidiaries;
(xii) except pursuant to any Company Plan in accordance with its terms as in effect on the date of this Agreement, (A) increase the compensation or benefits of any of its Subsidiaries directors, officers or employees, (B) grant any retention, change in control, severance or termination pay to any Company Employee, (C) establish, adopt, enter into, amend or terminate any Company Plan, except for offers of employment in connection with a replacement hiring as expressly permitted by this Section 5.1(b)(xii), (D) grant any compensation award (including equity or equity-based award), (E) take any action to fund or in any other way secure the payment of compensation or benefits under any Company Plan, (F) accelerate the time of payment or vesting of any compensation, rights or benefits under any Company Plan, (G) terminate, hire or engage any employee, other than terminations for cause, or hiring or engaging employees in the ordinary course of business to replace departed employees, or (H) loan or advance any money or any other property to any present or former director, officer or employee of the Company or any subsidiary of the Company;
(xiii) make any material change in any financial accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto;
(xiv) except in each case to the extent the Company determines, after prior consultation with Parent, that such action is reasonably necessary to preserve the status of the Company as a REIT, (A) make any change to any material method of Tax accounting, (B) make, change or revoke any material Tax election, (C) surrender any claim for a refund of material Taxes, (D) enter into any closing agreement with respect to any material Taxes, (E) amend any material Tax Return, (F) surrender any right to claim any material Tax refund, (G) enter into any Tax Protection Agreement, (H) settle or compromise any material Tax liability, audit, claim, assessment or other proceeding, (I) seek any Tax ruling from any Tax authority or (J) consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment;
(xv) enter into or amend any collective bargaining agreement with any labor organization or other representative of any Company Employees;
(xvi) other than any Transaction Litigation or any litigation related to Taxes or Tax matters, settle or compromise any litigation, other than settlements or compromises of litigation (A) where the amount paid (net of insurance proceeds receivable) does not exceed $2.5 million in the aggregate (net of any insurance proceeds and indemnity, contribution or similar payments actually received by the Company or its subsidiaries in respect thereof), (B) where the amount is paid or reimbursed by an insurance carrier after any applicable deductible or a third party under an indemnity or similar obligation, or (C) does not impose any non-monetary relief or obligation on the Company and its subsidiaries (other than customary confidentiality obligations);
(xvii) merge or consolidate with any Person or adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of such entity or otherwise change the form of legal entity of such entity;
(xviii) enter into any new line of business outside its existing business as of the date of this Agreement;
(xxix) authorize vote to approve or otherwise consent to the taking of any capital expenditures in excess action, or fail to exercise any rights to veto or prevent, any action by any joint venture of $175,000 in the aggregatecompany or its subsidiaries that would be prohibited by this Section 5.1 if such joint venture was a subsidiary of the Company;
(xixx) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in which action or failure to act would reasonably be expected to cause the ordinary course Company to fail to qualify as a REIT or any of businessits subsidiaries to cease to be treated as a partnership or disregarded entity for U.S. federal income tax purposes or as a Qualified REIT Subsidiary, consistent with past practicea Taxable REIT Subsidiary or a REIT, as applicable; and or
(iiixxi) shall use its reasonable best efforts agree, authorize or commit to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(iforegoing actions described in Sections 5.1(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant Section 5.1(xx). Notwithstanding anything to the transactions contemplated by contrary set forth in this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of nothing in this Agreement shall prohibit the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely subsidiaries, in consultation with Parent, from taking any action, at any time or from time to prevent time, that in the Merger from qualifying as a reorganization within the meaning of Section 368(a) reasonable judgment of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could Board of Directors of the Company, upon advice of counsel, is reasonably be expected to result in either (A) necessary for any of the representations and warranties of the Parent Company or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in subsidiaries to maintain its qualification as a REIT under the Code for any material respect period or (B) any portion thereof ending on or prior to the Effective Time, including making dividend or other distribution payments to stockholders of the conditions to the Closing set forth Company (in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviiiaccordance Section 6.17) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingotherwise.
Appears in 2 contracts
Samples: Merger Agreement (CorePoint Lodging Inc.), Merger Agreement (CorePoint Lodging Inc.)
Conduct of Business Pending the Merger. 4.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, between during the period from the date hereof and until the earlier to occur of the Effective Time or such earlier time as and the date, if any, on which this Agreement is terminated in accordance with Article VII (such period being hereinafter referred pursuant to as the "Interim Period")Section 7.1, except as expressly contemplated by this Agreement, as set forth in Section 5.1(a) of the Company Disclosure Schedule or as required by this Agreement Law, or unless Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld, each the business of the Company and its Subsidiaries:
(i) Subsidiaries shall conduct its business only be conducted in the ordinary course Ordinary Course of businessthe Company’s Business, consistent and in compliance in all material respects with past practice; (ii) shall not take any action, or fail to take any action, except in applicable Law and the ordinary course of business, consistent with past practice; and (iii) Company shall use its reasonable best efforts to preserve intact its business organization, properties and assetsto preserve its present relationships with customers, keep available suppliers, employees, licensees, licensors, partners and other Persons with which it or any of its Subsidiaries has significant business relations.
(b) Without limiting the services generality of their officersthe foregoing, employees between the date of this Agreement and consultants the earlier of the Effective Time and maintain in effect all Company Material Contracts. By way of amplification and not limitationthe date, if any, on which this Agreement is terminated pursuant to Section 7.1, except as otherwise expressly permitted contemplated by this Agreement, as set forth in Section 5.1(b) to the Company Disclosure Schedule or as required by Law, neither the Company nor any of its Subsidiaries shall , during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent:
(i) amend its Certificate of Incorporation, or otherwise change the Company Charter or Company Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseany similar governing instruments;
(ii) issue, sell, transfer, pledge, redeem, accelerate rights under, dispose of or encumber encumber, or authorize the issuance, sale, transfer, pledge, redemption, acceleration of rights under, disposition or encumbrance of, any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interest (including any phantom interest) in the Company or any of its Subsidiaries, except for the issuance of Shares of Company Common Stock reserved for issuance on the date hereof pursuant to the exercise of Options outstanding on the date of this Agreement, and the acceleration of vesting of Options as contemplated by the Option Plans and the issuance of Company Common Stock pursuant to, and in accordance with, the ESPP;
(iii) sell, pledge, mortgage, dispose, lease, of or encumber any assets, tangible or intangible, of the Company or any of its Subsidiaries;
Subsidiaries or suffer to exist any Lien thereupon other than (iiiA) redeem, repurchase or otherwise acquire, directly or indirectly, any shares sales of capital stock assets not to exceed $50,000 in the aggregate and (B) sales of products in the Ordinary Course of the Company or interest in or securities of any of its SubsidiariesCompany’s Business;
(iv) sellwith respect to Intellectual Property owned by the Company or any of its Subsidiaries and with respect to any rights to Intellectual Property granted under any IP Contract, (A) transfer, pledgeassign or license to any Person any rights to Intellectual Property, (B) abandon, permit to lapse or otherwise dispose of any Intellectual Property, (C) grant any Lien on any Intellectual Property, or encumber (D) make any material properties, facilities, equipment change in any Intellectual Property that reasonably could be expected to impair such Intellectual Property or other assets, except in the ordinary course of business consistent Company’s or its Subsidiaries’ rights with past practicerespect thereto;
(v) (A) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests (stock, except that a direct or indirect wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
its parent, (viB) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock stock, or equity interests(C) purchase, repurchase, redeem or otherwise acquire, directly or indirectly, or permit any Subsidiary to purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its Subsidiaries, or any option, warrant or right, to acquire any such securities, or propose to do any of the foregoing;
(viivi) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiiA) (1) acquire (by merger, consolidation, consolidation or acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereof;
thereof or any equity interest therein, in each case, with a value in excess of $10,000, (ix2) incur enter into any indebtedness for borrowed money or issue any debt securities or assumenew line of business, guarantee (other than guarantees development, testing or marketing of bank debt new products in the Ordinary Course of the Company's Subsidiaries entered into in the ordinary course of business’s Business, (3) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances capital contribution or enter into investment in any financial commitmentsjoint venture, except as required pursuant to terms of a Material Contract in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party effect as of the date of this Agreement;
, or (x4) authorize create any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practiceSubsidiaries; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for (whether directly, contingently or otherwise), the material obligations of any PersonPerson (other than a wholly-owned Subsidiary), except in the Ordinary Course of the Company’s Business; (C) enter into, renew, fail to renew, amend or make terminate any loans, advances material lease relating to real property (including any existing Material Real Property Leases); (D) adopt or enter into implement any financial commitments;
new stockholder rights plan; (ixE) authorize any capital expendituresexpenditures or purchase of fixed assets which are in excess of $50,000, for the Company and its Subsidiaries taken as a whole, except as previously budgeted and set forth in Section 5.1(b) of the Company Disclosure Schedule, and taking into consideration all future plans regarding the Company’s property, plant and equipment; or (F) enter into or amend any Contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 5.1(b)(vi);
(xvii) take or permit to be taken any action to: (A) increase the compensation payable or to become payable to its current or former directors, officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant hire or promote any additional severance person as or termination pay toto (as the case may be) an executive officer or appoint any director of the Company, or enter into any employment or severance agreements with, its officers; (C) hire or promote any employee below officer except to fill a vacancy in the Ordinary Course of the Company’s Business, (D) make or forgive any loan or advance to employees or directors (other than loans or advances of reasonable relocation and travel expenses in the Ordinary Course of the Company’s Business), (E) except as may be required by Law or existing written agreements, grant any severance or termination pay to, or enter into any employment modify, amend, terminate or severance agreement withadopt, or promise to modify, amend, terminate or adopt, any employee except in accordance with agreements entered into before the date of this Agreement; Plan, or any Contract, agreement or arrangement that would be a Plan, (D) enter into any collective bargaining agreement; or (EF) establish, adopt, enter into or amend in any material respect any bonuscollective bargaining agreement, profit sharingcompensation plan, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance program or other plan, agreement, trust, fund, policy or arrangement for the benefit of any of its current or former directors, officers or employeesemployees of the Company, any of its Subsidiaries, except as may be necessary to maintain proper qualification under the Code or other Law, (G) pay any discretionary bonuses to any officer of the Company, (H) make any awards of equity in the Company or any of its Subsidiaries or any rights to receive equity in the Company or any of its Subsidiaries, (I) amend any existing stock option or other equity-based compensation or enter into any agreement under which any stock option or other equity-based compensation would be required to be issued, except as permitted by Section 2.4, (J) except as set forth in writing by Parent for the express purpose of communications with employees of the Company or any of its Subsidiaries, make any representation or commitment to, or enter into any formal or informal understanding with any employee of the Company or any of its Subsidiaries with respect to compensation, benefits, or terms of employment to be provided by Parent, Purchaser, or any of their Subsidiaries at or subsequent to the Closing, or (K) materially change any actuarial assumption or other assumption used to calculate funding obligations with respect to any pension or retirement plan, or change the manner in which contributions to any such plan are made or the basis on which such contributions are determined, except, in each case, as may be required by Law;
(xiviii) take any action to change any accounting policies or procedures (including, without limitation, including procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless change any material assumption underlying, or method of calculating, any bad debt contingency or other reserve, except in each case as required to conform to GAAP or applicable Law;
(ix) make, change or revoke any material Tax election or, except as required by statutory applicable Law, change any method of Tax accounting, (B) enter into any settlement or compromise of any material Tax liability, (C) file any amended Tax Return with respect to any material Tax, (D) change any annual Tax accounting principles period, (E) enter into any closing agreement relating to any material Tax, (F) claim or GAAPsurrender any right to claim a material Tax refund or (G) become a party to a transaction that constitutes a “reportable transaction” for purposes of Section 6011 of the Code and applicable Treasury regulations thereunder (or a similar provision of state Law);
(x) fail to pay material accounts payable and other material obligations in the Ordinary Course of the Company’s Business other than those disputed in good faith;
(xi) materially accelerate the collection of accounts receivable, modify the payment terms of any accounts receivable other than in the Ordinary Course of the Company’s Business, or sell, securitize, factor or otherwise transfer any accounts receivable;
(xii) createadopt a plan of complete or partial liquidation, incurdissolution, suffer to exist merger, consolidation, restructuring, recapitalization or assume any Lien on other reorganization of the Company or any of its properties, facilities Subsidiaries (other than the Merger or other assetsas expressly provided in this Agreement);
(xiii) make (A) at any Tax election time within the 90-day period before the Effective Time, without complying fully with the notice and other requirements of the WARN Act or settle any comparable foreign, state or compromise local Law, effectuate (1) a “plant closing” (as defined in the WARN Act or any comparable state or local law) affecting any single site of employment or one or more facilities or operating units within any single site of employment of the Company or any of its Subsidiaries; or (2) a “mass layoff” (as defined in the WARN Act or any comparable state or local law) at any single site of employment or one or more facilities or operating units within any single site of employment of the Company or any of its Subsidiaries, nor (B) otherwise terminate or lay off employees in such numbers as to give rise to material federalliability under any applicable laws respecting the payment of severance pay, stateseparation pay, local or foreign Tax liabilitytermination pay, pay in lieu of notice of termination, redundancy pay, or agree to an extension the payment of a statute any other compensation, premium, or penalty upon termination of limitations with respect theretoemployment, reduction of hours, or temporary or permanent layoffs;
(xiv) pay(A) authorize, dischargeenter into, satisfy renew, extend, terminate or settle any litigation amend, or waive, release or assign or release any material rights or claims with respect theretoto (x) any Contract or arrangement with revenues or payments in excess of $75,000 in any Contract year other than in the Ordinary Course of the Company’s Business, unless such Contract or arrangement is terminable without payment or penalty upon the Company or its Subsidiaries giving no more than thirty (30) days’ notice, (y) any joint venture, partnership or other similar arrangement, or (z) any Material Contract other than in the Ordinary Course of the Company’s Business, or (B) engage in any transaction or series of transactions with any Affiliate which would constitute a related party transaction under the rules and regulations of the SEC or the Company’s policy governing such transactions;
(xv) fail agree to maintain or otherwise settle, compromise or otherwise resolve in full force and effect all insurance policies currently whole or in effectpart any litigation, actions, suits, actual, potential or threatened claims, investigations or proceedings, whether pending on the date hereof or hereafter made or brought, which settlement or compromise would, individually or in the aggregate, result in (A) amounts payable to or by the Company or its Subsidiaries in excess of $30,000 or (B) any other administrative action brought by, or permit civil settlements with, any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policiesGovernmental Entity;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could would reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing Offer set forth in Article VI of this Agreement Annex I not being satisfied in satisfied;
(xvii) make any material respect as change to timing or size of orders of product shipped to customers, trade, or distributors other than in the Ordinary Course of the Closing Date;Company’s Business; or
(xviii) waive, release authorize or assign make any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Monterey Gourmet Foods), Merger Agreement (Pulmuone Cornerstone Corp)
Conduct of Business Pending the Merger. 4.1 Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, between Between the date hereof of this Agreement and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Time, except as expressly otherwise contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule, as required by this Agreement law or unless Parent shall otherwise consent in writing, writing (which consent shall not be unreasonably withheld, each delayed or conditioned), (A) the business of the Company and its Subsidiaries:
(i) subsidiaries shall conduct be conducted in its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in business and the ordinary course of business, consistent with past practice; and (iii) Company shall use its reasonable best efforts to preserve substantially intact its business organization, properties and assetsmaterial business relationships, keep available (B) the services of their officers, employees and consultants and maintain in effect all Company Material Contracts. By way of amplification and not limitation, except as expressly permitted by shall perform its obligations under this Agreement, and (C) without limiting the foregoing, neither the Company nor any of its Subsidiaries shall , during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parentsubsidiaries shall:
(i) amend or otherwise change its Certificate of Incorporation, Bylaws Incorporation or other equivalent organizational documents, By-Laws or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseany similar governing instruments;
(ii) issue, deliver, sell, transfer, pledge, dispose of or encumber any shares of capital stock of any classstock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interest interests or any voting securities (including but not limited to stock appreciation rights, phantom stock or similar instruments), of the Company or any of its Subsidiariessubsidiaries (except for (A) the issuance of Common Shares upon the exercise of Options or in connection with other stock-based awards outstanding as of the date of this Agreement, in each case, in accordance with the terms of any Company Stock Option Plan, or (B) issuances in accordance with the Rights Plan);
(iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except for any dividend or distribution by a subsidiary of the Company to the Company or another wholly owned subsidiary of the Company);
(iv) reclassify, combine, split, subdivide, redeem, repurchase purchase or otherwise acquire, directly or indirectly, acquire any shares of capital stock of the Company (except for the acquisition of Common Shares tendered by optionees in connection with a cashless exercise of Options or interest in order to pay taxes in connection with the exercise of Options or securities the lapse of restrictions in respect of Restricted Shares pursuant to the terms of a Company Stock Option Plan), or reclassify, combine, split or subdivide any capital stock or other ownership interests of any of its Subsidiariesthe Company’s subsidiaries;
(ivv) sellmake any acquisition of (whether by merger, transferconsolidation or acquisition of stock or substantially all of the assets), pledgeor make any investment in any interest in, any corporation, partnership or other business organization or division thereof;
(vi) sell or otherwise dispose of (whether by merger, consolidation or encumber disposition of stock or assets or otherwise) any material propertiescorporation, facilities, equipment partnership or other business organization or division thereof or otherwise sell or dispose of any assets, except other than sales or dispositions in the ordinary course of business or pursuant to existing Contracts;
(vii) other than in the ordinary course of business consistent with past practice, enter into or amend in any material respect any Contract;
(vviii) declareauthorize any material new capital expenditures which are, in the aggregate, in excess of the Company’s capital expenditure budget set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary forth on Section 3.8 of the Company may declare and pay a cash dividend to the Company)Disclosure Schedule;
(viix) splitexcept for borrowings under the Company’s existing credit facilities, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend incur or modify in any material respect in an manner adverse to the Company the terms of any existing agreements indebtedness for borrowed money, or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to any other person (other than a subsidiary of the Company), in each case, other than in the ordinary course of business consistent with past practice, pursuant to letters of credit or otherwise;
(x) except to the extent required under any Employee Benefit Plan or as required by applicable law, (A) increase the compensation or fringe benefits of any of its directors, officers or employees (except in the ordinary course of business with respect to employees who are not directors or officers), (B) grant any severance or termination pay not provided for under any Employee Benefit Plan, (C) enter into any employment, consulting or severance agreement or arrangement with any of its present or former directors, officers or other employees, except for offers of employment in the ordinary course of business and consistent with past practice with employees who are not directors or officers, (D) establish, adopt, enter into or amend in any material respect or terminate any Employee Benefit Plan or (E) pay or become obligated to pay any bonus, severance or other amounts to any officer or employee other than as set forth in Section 3.24 of the Company Disclosure Schedule;
(xi) make any change in any accounting principles, except as may be appropriate to conform to changes in statutory or regulatory accounting rules or generally accepted accounting principles or regulatory requirements with respect thereto;
(xii) other than in the ordinary course of business or as required by applicable law, (A) make any Tax election or change any method of accounting, (B) enter into any settlement or compromise of any Tax liability, (C) file any amended Tax Return with respect to any Tax, (D) change any annual Tax accounting period, (E) enter into any closing agreement relating to any material Tax or (F) surrender any right to claim a Tax refund;
(xiii) settle or compromise any litigation, other than settlements or compromises of litigation where the amount paid does not exceed $250,000 or, if greater, the total incurred cash reserve amount for such matter, as of the date of this Agreement, maintained by the Company Intellectual Property on the Company Balance Sheet at March 31, 2008;
(xiv) waive any right of value material to the Company or any subsidiary of the Company;
(xv) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or other reorganization of the Company or any subsidiary of the Company other than the dissolution of any inactive subsidiary of the Company mutually agreed to by the Company and the Parent;
(xvi) except as may be required by generally accepted accounting principles, revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of any assets or any write-off of notes or accounts receivable, other than in the ordinary course of business consistent with past practice;
(viiixvii) acquire (by merger, consolidation, acquisition materially change any of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other its business organization or division thereofpolicies;
(ixxviii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment lease (as lessor or severance agreements withlessee); sell, its officers; (C) grant abandon or make any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit disposition of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organizationassets, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws businesses; grant or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its propertiesassets, facilities properties or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real propertybusinesses; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement agree to do take any of the foregoingactions described in Section 5.1(a)(i) through Section 5.1(a)(xviii).
(b) Between the date of this Agreement and the Effective Time, the Company will timely file all reports required to be filed under all United States securities laws and regulations and by the American Stock Exchange.
(c) Between the date of this Agreement and the Effective Time, the Company shall not, and shall cause each of is subsidiaries not to, directly or indirectly, take any action (i) to cause its representations and warranties set forth in ARTICLE III to be untrue in any material respect; or (ii) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement.
Appears in 2 contracts
Samples: Merger Agreement (Wilshire Enterprises Inc), Merger Agreement (Jekogian Iii Nickolas W)
Conduct of Business Pending the Merger. 4.1 Section 6.1 Conduct of Business of by the Company Pending the Merger.
(a) The Company covenants and agrees that, between the date hereof and the earlier . Prior to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Date, except as expressly required by this Agreement or unless Parent shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries:
(i) the Company shall, and shall conduct cause its business only subsidiaries to, carry on their respective businesses in the usual, regular and ordinary course of businessin substantially the same manner as heretofore conducted, consistent with past practice; (ii) and shall, and shall not take any actioncause its subsidiaries to, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best their diligent efforts to preserve intact its their present business organization, properties and assetsorganizations, keep available the services of their officers, present officers and employees and consultants preserve their relationships with customers, suppliers and others having business dealings with them to the end that their goodwill and ongoing businesses shall be unimpaired at the Effective Date. The Company shall, and shall cause its subsidiaries to, (A) maintain insurance coverages and its books, accounts and records in effect the usual manner consistent with prior practices; (B) comply in all material respects with all laws, ordinances and regulations of Governmental Entities applicable to the Company and its subsidiaries; (C) maintain and keep its properties and equipment in good repair, working order and condition, ordinary wear and tear excepted; and (D) perform in all material respects its obligations under all contracts and commitments to which it is a party or by which it is bound, in each case other than where the failure to so maintain, comply or perform, either individually or in the aggregate, would not result in a Company Material Contracts. By way of amplification and not limitation, except as expressly permitted by this Agreement, neither the Company nor any of its Subsidiaries shall , during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseAdverse Effect;
(ii) issueexcept as required by this Merger Agreement or as permitted pursuant to Section 7.10 hereof, sell, transfer, pledge, dispose of the Company shall not and shall not propose to (A) sell or encumber pledge or agree to sell or pledge 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 of the Company or owned by it in any of its Subsidiaries;
subsidiaries, (iiiB) redeemamend its Restated Certificate of Incorporation or Bylaws, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(viC) split, combine or reclassify any shares of its outstanding capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of capital stock of the Company, or declare, set aside or pay any dividend or other distribution payable in cash, stock or property (other than Regular Company Dividends), or (D) directly or indirectly redeem, purchase or otherwise acquire or agree to redeem, purchase or otherwise acquire any shares of Company capital stock;
(iii) the Company shall not, nor shall it permit any of its subsidiaries to, (A) except as required by this Merger Agreement, issue, deliver or sell or agree to issue, deliver or sell any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class, any Indebtedness or equity interests;
any option, rights or warrants to acquire, or securities convertible into, shares of capital stock other than issuances of Company Common Stock pursuant to the exercise of employee stock options outstanding on the date hereof or the conversion of Company Series C Preferred Stock, Company Series B Preferred Stock or Indebtedness of the Company; (viiB) sellacquire, transferlease or dispose or agree to acquire, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant lease or otherwise dispose of any Company Intellectual Propertycapital assets or any other assets other than in the ordinary course of business, (C) incur additional Indebtedness or encumber or grant a security interest in any asset or enter into any other material transaction other than in each case in the ordinary course of business; (D) acquire or agree to acquire by merging or consolidating with, or amend by purchasing a substantial equity interest in, or modify by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, in each case in this Clause (D) which are material, individually or in the aggregate, to the Company and its subsidiaries taken as a whole, except that the Company may create new wholly owned subsidiaries in the ordinary course of business; or (E) enter into any material respect any existing agreements contract, agreement, commitment or arrangement with respect to any of the foregoing;
(iv) except as set forth in the Company Intellectual Property Disclosure Schedule, the Company shall not, nor shall it permit, any of its subsidiaries to, except as required to comply with applicable law and except as provided in Section 7.5 hereof, (A) adopt, enter into, terminate or amend any bonus, profit sharing, compensation, severance, termination, stock option, pension, retirement, deferred compensation, employment or other Company Benefit Plan, agreement, trust, fund or other arrangement for the benefit or welfare of any director, officer or current or former employee, (B) increase in any manner the compensation or fringe benefit of any director, officer or employee (except for normal increases in the ordinary course of business that are consistent with past practice and that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Company and its subsidiaries relative to the level in effect prior to such amendment), (C) pay any benefit not provided under any existing plan or arrangement, (D) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Company Benefit Plan (including, without limitation, the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any benefit plans or agreements or awards made thereunder), (E) take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or arrangement or Company Benefit Plan other than in the ordinary course of business consistent with past practice, or (F) adopt, enter into, amend or terminate any contract, agreement, commitment or arrangement to do any of the foregoing;
(viiiv) acquire (by mergerthe Company shall not, consolidationnor shall it permit any of its subsidiaries to, acquisition of stock or assets or otherwise) make any corporationinvestments in non-investment grade securities provided, limited liability companyhowever, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of that the Company's Subsidiaries entered into Company will be permitted to create new wholly owned subsidiaries in the ordinary course of business; and
(vi) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or shall not, nor shall it permit any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) subsidiaries to, take or permit cause to be taken any action to: (A) increase action, whether before or after the compensation payable to its officers or employeesEffective Date, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent would disqualify the Merger from qualifying as a reorganization "pooling of interests" for accounting purposes or as a "reorganization" within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Section 6.2 Conduct of Business of by Parent and Sub Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Corporate Advisors Lp), Merger Agreement (Tyco Toys Inc)
Conduct of Business Pending the Merger. 4.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except Except as expressly required permitted by this Agreement or unless Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries:
clauses (i) through (xix) of this Section 4.1, during the period from the date of this Agreement through the Effective Time, the Company shall, and shall conduct cause each of its Subsidiaries to, in all material respects carry on its business only in the ordinary course of businessits business as currently conducted and, to the extent consistent with past practice; (ii) shall not take any actiontherewith, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its current business organization, properties and assets, keep available the services of their officers, its current officers and employees and consultants preserve its relationships with customers, suppliers and maintain in effect all Company Material Contractsothers having business dealings with it to the end that its goodwill and ongoing business shall be unimpaired at the Effective Time. By way Without limiting the generality of amplification the foregoing, and not limitation, except as otherwise expressly permitted contemplated by this Agreement, neither Agreement or as set forth in Section 4.1 of the Company nor Letter (with specific reference to the applicable subsection below), the Company shall not, and shall not permit any of its Subsidiaries shall to, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(vA) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or propertydividends on, or make any combination thereof) other actual, constructive or deemed distributions in respect of of, any of its capital stock stock, or otherwise make any payments to its stockholders in their capacity as such other equity interests (except that a than dividends or distributions from wholly owned Subsidiary Subsidiaries of the Company may declare and pay a cash dividend to the Company);
, (viB) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, or issue authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or equity interestsany Subsidiary or any other securities thereof or any rights, warrants or options to acquire, any such shares or other securities or (D) amend the Company Rights Agreement;
(viiii) issue, deliver, sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant of or otherwise dispose encumber any shares of its capital stock, any Company Intellectual Propertyother voting securities or equity equivalent or any securities convertible into, or amend any rights, warrants or modify in options to acquire, any material respect any existing agreements with respect to any Company Intellectual Property such shares, voting securities, equity equivalent or convertible securities, other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement and pursuant to the Company Stock Purchase Plan, in each case, in accordance with their current terms;
(iii) amend its certificate of incorporation or bylaws or other comparable organizational documents;
(iv) acquire or agree to acquire by merging or consolidating with, by purchasing a substantial portion of the assets of or equity in or by any other manner, any business or any corporation, limited liability company, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets, other than assets acquired in the ordinary course of business consistent with past practicepractice and not material to the Company and its Subsidiaries, taken as a whole;
(viiiv) acquire sell, transfer, lease, license (by merger, consolidation, acquisition as licensor of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt Intellectual Property Rights of the Company's Subsidiaries entered into in the ordinary course of business) or endorse ), mortgage, pledge, encumber or otherwise as an accommodation become responsible for the obligations dispose of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as properties or assets, other than sales, leases or licenses of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take products or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise services in the ordinary course of business consistent with past practice; practice and not material to the Company and its Subsidiaries, taken as a whole;
(Bvi) grant incur any additional severance indebtedness for borrowed money, guarantee any such indebtedness or termination pay make any loans, advances or capital contributions to, or other investments in, any other Person, other than indebtedness, loans, advances, capital contributions and investments between the Company and any of its wholly owned Subsidiaries or between any of such wholly owned Subsidiaries;
(vii) alter (through merger, liquidation, reorganization, restructuring or in any other fashion) the corporate structure or ownership of the Company or any Subsidiary;
(viii) enter into into, adopt or amend any severance plan or material Contract, Company Plan or employment or severance agreements withconsulting Contract, except as required by applicable law, including the Company Stock Option Plans;
(ix) increase the compensation payable or to become payable to its officers; directors, officers or employees (Cexcept for increases in the ordinary course of business consistent with past practice in salaries or wages of employees of the Company or any of its Subsidiaries who are not officers of the Company or any of its Subsidiaries) or grant any severance or termination pay to, or enter into or amend any employment or severance agreement Contract with, any employee except in accordance with agreements entered into before current or former director or officer of the date Company or any of this Agreement its Subsidiaries, or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or, except as may be required to comply with applicable law, amend or amend in take action to enhance or accelerate any material respect rights or benefits under, any labor, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other planContract, trust, fund, policy or arrangement for the benefit of any of its directorscurrent or former director, officers officer or employeesemployee;
(x) knowingly violate or knowingly fail to perform any obligation or duty imposed upon it or any Subsidiary by any applicable material federal, state or local law, rule, regulation, guideline or ordinance;
(xi) make or adopt any change any to its accounting methods, practices or policies or procedures (including, without limitation, procedures with respect other than actions required to reserves, revenue recognition, payments of accounts payable and collection of accounts receivablebe taken by GAAP), unless required by statutory accounting principles or GAAP;
(xii) createprepare or file any Tax Return inconsistent with past practice or, incur, suffer to exist or assume any Lien on any of its propertiessuch Tax Return, facilities take any position, make any election or other assetsadopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax Returns in prior periods;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax income tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) payenter into, dischargeamend or terminate any Company Contract, satisfy other than entering into or settle any litigation amending customer contracts in the ordinary course of business so long as (A) the amount involved does not exceed $150,000, and (B) such customer contract or waive, assign or release any rights or claims with respect theretoamendment thereto does not provide for rates which are more than 20% below the average billing rate for the then most recently completed fiscal quarter;
(xv) fail enter into any Contract (A) that would, after the Effective Time, restrict Parent and its Subsidiaries with respect to maintain engaging in full force and effect all insurance policies currently any line of business or in effectany geographical area; or (B) that contains exclusivity, most favored nation pricing or permit non-solicitation provisions with respect to any customer or supplier that would, after the Effective Time, apply to Parent or any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policiesits Subsidiaries;
(xvi) take make or agree to make any action that (without regard to any action takennew capital expenditure or expenditures which, or agreed to be takenindividually, by Company or any is in excess of its affiliates) could be considered reasonably likely to prevent $10,000 or, in the Merger from qualifying as a reorganization within the meaning aggregate, are in excess of Section 368(a) of the Code$50,000;
(xvii) take any action waive or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in release any material respect right or claim or pay, discharge or satisfy any material claims, liabilities or obligations (B) any absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in the conditions most recent Company SEC Documents filed prior to the Closing set forth date hereof, or incurred in Article VI the ordinary course of this Agreement not being satisfied in any material respect as of the Closing Datebusiness consistent with past practice;
(xviii) waive, release initiate any litigation or assign arbitration proceeding or settle or compromise any rights material litigation or claims under arbitration proceeding or any Parent Material Contract or enter into or extend any lease with respect to real claim involving intellectual property; or
(xix) authorize, recommend, propose, propose or announce an intention to do any of the foregoing or enter into any agreement, contract, commitment or arrangement Contract to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Technology Solutions Company), Merger Agreement (Zamba Corp)
Conduct of Business Pending the Merger. 4.1 Section 5.01 Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between from the date hereof and until the earlier to occur of the Effective Time or such earlier time as and termination of this Agreement is terminated in accordance with pursuant to Article VII (such period being hereinafter referred to as the "Interim Period")VIII, except as expressly (x) required by applicable Law, (y) set forth in Section 5.01 of the Company Disclosure Schedule or (z) expressly contemplated or permitted by this Agreement or Agreement, unless Parent shall otherwise consent in writing, writing (which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries:
conditioned or delayed), (i) the businesses of the Group Companies shall conduct its business only be conducted in the ordinary course of business, business and in a manner consistent with past practice; , (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) Company shall use its commercially reasonable best efforts to preserve intact its the assets and business organizationorganization of the Group Companies in all material respects, properties and assets, to keep available the services of their officers, the current officers and key employees of the Group Companies and consultants and to maintain in effect all material respects the current relationships of the Group Companies with existing customers, suppliers and other persons with which any Group Companies has material business relations as of the date hereof and (iii) the Company Material Contractsshall as promptly as practicable after the date hereof make the registrations set forth in Section 5.01(iii) of the Company Disclosure Schedule with respect to SAFE Rules and Regulations (or any successor law, rule or regulation). By way Without limiting the generality of amplification the foregoing paragraph, from the date hereof until the earlier of the Effective Time and not limitationtermination of this Agreement pursuant to Article VIII, except as (x) required by applicable Law, (y) set forth in Section 5.01 of the Company Disclosure Schedule or (z) expressly contemplated or permitted by this Agreement, neither the Company nor shall not and shall not permit any of its Subsidiaries shall , during the Interim Periodother Group Company to, directly or indirectly, do or propose to do any of the following without the prior written consent of Parent:Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(ia) amend or otherwise change its Certificate memorandum and articles of Incorporation, Bylaws association or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(iib) issue, sell, transfer, lease, sublease, license, pledge, dispose of of, grant or encumber encumber, or authorize the issuance, sale, transfer, lease, sublease, license, pledge, disposition, grant or encumbrance of, (i) any shares of capital stock any class of any classGroup Company (other than in connection with (A) the exercise of any Company Options or Company RSs in accordance with the Share Incentive Plan, (B) the withholding of Company securities to satisfy Tax obligations with respect to Company Options or Company RSs, (C) the acquisition by the Company of its securities in connection with the forfeiture of Company Options or Company RSs or (D) the acquisition by the Company of its securities in connection with the net exercise of Company Options in accordance with the terms thereof, or any options, warrants, securities convertible securities into any share capital or other rights of any kind to acquire any shares of capital stockshares, or any other ownership interest (including any phantom interest), of any Group Company) or (ii) any property or assets (whether real, personal or mixed, and including leasehold interests and intangible property) of any Group Company with a value or purchase price (including the value of assumed liabilities) in excess of $30,000,000, except in the ordinary course of business;
(c) declare, set aside, make or pay any dividend or other distribution, payable in cash, shares, property or otherwise, with respect to any of its shares (other than dividends or other distributions from any Subsidiary of the Company to the Company or any of its other Subsidiaries);
(iiid) reclassify, combine, split, subdivide or redeem, repurchase or purchase or otherwise acquire, directly or indirectly, any shares of its share capital or securities or other rights exchangeable into or convertible or exercisable for any of its share capital (other than the purchase of Shares to satisfy obligations under the Share Incentive Plan, including the withholding of Shares in connection with the exercise of Company Options or Company RSs in accordance with the terms and conditions of such Company Options or Company RSs (as applicable));
(e) effect or commence any liquidation, dissolution, scheme of arrangement, merger, consolidation, amalgamation, restructuring, reorganization or similar transaction involving any Group Company, or create any new Subsidiary (other than creating any new Subsidiary in the PRC by a Group Company that (i) is incorporated in the PRC and (ii) does not require any capital injection (directly or indirectly) from outside the PRC after the date hereof), other than as contemplated by this Agreement;
(f) acquire, whether by purchase, merger, consolidation, scheme of arrangement, amalgamation or acquisition of stock or assets or otherwise, any assets, securities or properties, in aggregate, with a value or purchase price (including the value of assumed liabilities) in excess of $30,000,000 in any transaction or related series of transactions;
(g) incur or guarantee any indebtedness for borrowed money of any person except for, the incurrence or guarantee of indebtedness (i) under any Group Company’s existing credit facilities as in effect on the date hereof in an aggregate amount not to exceed the maximum amount authorized under the Contracts evidencing such Indebtedness (including any renewal, extension, refinancing or replacement of such Contracts on substantially the same or similar terms) or (ii) not in an aggregate amount in excess of $10,000,000;
(h) other than expenditures necessary to maintain assets in good repair consistent with the past practice, authorize, or make any commitment with respect to, any single capital expenditure that is in excess of $15,000,000 or capital expenditures that are, in the aggregate, in excess of $30,000,000 for the Group Companies taken as a whole;
(i) except as required pursuant to any Company Employee Plan or this Agreement, (i) enter into any new employment or compensatory agreements (including the renewal of any such agreements), or terminate any such agreements, with any director, officer, employee or consultant of any Group Company other than the hiring or termination of employees or consultants below the vice president level or its equivalent (e.g. the head of business unit) or with an annual compensation of less than $150,000, (ii) grant or provide any severance or termination payments or benefits to any director or officer of any Group Company except as required by applicable Law, (iii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to any director or officer of any Group Company except such increases or payments, in the aggregate, do not cause an increase in the labor costs of the Group Companies, taken as a whole, by more than 5%, (iv) make any new equity awards to any director, officer or employee of any Group Company, (v) establish, adopt, amend or terminate any Company Employee Plan or materially amend the terms of any outstanding Company Options, (vi) take any action to voluntarily accelerate the vesting of Company Options to the extent not already required in the Share Incentive Plan or contemplated by this Agreement or (vii) forgive any loans to directors, officers or employees of any Group Company;
(j) issue or grant any Company Option or Company RSs to any person under the Share Incentive Plan;
(k) make any changes with respect to financial accounting policies or procedures, including changes affecting the reported consolidated assets, liabilities or results of operations of the Group Companies, except as required by changes in statutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto;
(l) enter into, amend, modify, consent to the termination of, or waive any material rights under, any Material Contract (or any Contract that would be a Material Contract if such Contract had been entered into prior to the date hereof) that calls for annual aggregate payments of $30,000,000 or more that cannot be terminated without material surviving obligations or material penalty upon notice of 90 days or less;
(m) enter into, amend, modify, consent to the termination of, or waive any material rights under, any Control Agreements (or any Contract that would be a Control Agreement if such Contract had been entered into prior to the date hereof), except as contemplated by Section 6.16 of the Company Disclosure Schedule or interest in as necessary to satisfy the Reorganization Condition Actions (and not otherwise inconsistent with Section 6.16 of the Company Disclosure Schedule);
(n) enter into any Contract between the Company or securities of any of its Subsidiaries;
(iv) sell, transferon the one hand, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of and any of its capital stock their directors or executive officers, on the other equity interests hand, in each case required to be disclosed pursuant to Item 7B or Item 19 of Form 20-F under the Exchange Act (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Companyas permitted under Section 5.01(i));
(vio) splitterminate or cancel, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Propertylet lapse, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property respect, other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into renewals in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations , any material insurance policies maintained by it that is not promptly replaced by a comparable amount of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreementinsurance coverage;
(xp) authorize commence any capital expenditures Action for a claim of more than US$30,000,000 (excluding any Action seeking for an injunctive relief or other similar equitable remedies) or settle any Action other than any settlement involving the payment of monetary damages not in excess of $175,000 in the aggregate30,000,000;
(xiq) take permit any Intellectual Property owned by any Group Company to lapse or permit to be taken any action to: (A) increase the compensation payable to its officers or employeesabandoned, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay todedicated, or enter into disclaimed, fail to perform or make any employment applicable filings, recordings or severance agreements with, its officers; (C) grant any severance other similar actions or termination pay tofilings, or enter into fail to pay all required fees and Taxes required or advisable to maintain and protect its interest in each and every item of Intellectual Property owned by any employment Group Company;
(r) fail to make in a timely manner any filings or severance agreement with, any employee except in accordance registrations with agreements entered into before the date of this Agreement SEC required under the Securities Act or otherwise in the ordinary course of business consistent with past practice; Exchange Act or the rules and regulations promulgated thereunder;
(Ds) enter into any collective bargaining agreement; Contract involving the acquisition from another person or disposition to another person, directly or indirectly (by merger, license or otherwise), of assets or capital stock or other equity interests of another person that contains (i) a put, call or similar right pursuant to which any Group Company could be required to purchase or sell, as applicable, any equity interests of any person or assets that have a fair market value or purchase price of more than $30,000,000 or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (Aii) any criminal wrongdoing earn-out or (B) similar payment payable by any Group Company with a maximum potential earn-out or similar payment that, as reasonably estimated by the invalidity or unenforceability ofCompany, or any infringement with respect toindividually, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) payments by any Group Company of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorizemore than $30,000,000, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct Third Party (in the case of Business each of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: clauses (i) shall conduct its business only and (ii), other than Contracts in respect of acquisitions or dispositions of inventory, properties and other assets in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise);
(iit) issue, sell, transfer, pledge, dispose of or encumber any shares of capital stock engage in the conduct of any class, or any options, warrants, convertible securities or other rights new line of any kind business material to acquire any shares of capital stock, or any other ownership interest of the Parent; or any of Company and its Subsidiaries, other than pursuant to the transactions contemplated by this Agreementtaken as a whole;
(iiiu) redeemmake or change any material Tax election, repurchase materially amend any Tax return (except as required by applicable Law), enter into any material closing agreement with respect to Taxes, surrender any right to claim a material refund of Taxes, settle or otherwise acquire, directly finally resolve any material controversy with respect to Taxes or indirectly, materially change any shares method of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;Tax accounting; or
(v) declareannounce an intention, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take formal or permit to be taken any action to: (A) increase the compensation payable to its officers informal agreement or employeesotherwise make a commitment, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Baring Asia Private Equity Fund v Co-Investment L.P.), Merger Agreement (Shi Yuzhu)
Conduct of Business Pending the Merger. 4.1 SECTION 4.01. Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between during the period from the date hereof of this Agreement and continuing until the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by termination of this Agreement or the Effective Time, unless Parent shall otherwise consent agree in writing, writing (which consent shall not be unreasonably withheld, each delayed or conditioned), and except as set forth in Section 4.01 of the Company Disclosure Schedule, the Company shall conduct its business and shall cause the businesses of its subsidiaries to be conducted only the ordinary course of business; and the Company shall use reasonable commercial efforts to preserve substantially intact in all material respects the business organization of the Company and its Subsidiaries:
(i) shall conduct its business only in the ordinary course of businesssubsidiaries, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, keep available the services of their the present key officers, employees and consultants of the Company and maintain in effect all its subsidiaries and to preserve the present relationships of the Company Material Contractsand its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, neither the Company nor any of its Subsidiaries shall subsidiaries shall, during the Interim Periodperiod from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, and except as set forth in Section 4.01 of the Company Disclosure Schedule, directly or indirectlyindirectly do, do or propose to do, any of the following without the prior written consent of Parent, which in the case of clauses (c), (e), (g), (h) and (i), which will not be unreasonably withheld, delayed or conditioned:
(ia) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring change the Company's Charter Documents or otherwisethe Subsidiary Documents except as contemplated by this Agreement;
(iib) issue, sell, transfer, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of its capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest of (including, without limitation, any phantom interest) in the Company or Company, any of its Subsidiariessubsidiaries (except for (A) the issuance of shares of Company Common Stock issuable pursuant to Company Stock Options outstanding on the date hereof, (B) the issuance of shares of Company Common Stock pursuant to any employer stock fund under any Company Benefit Plan or the Company's Employee Stock Purchase Plan in accordance with their respective terms as in effect on the date hereof, (C) the issuance of Company Stock Options in the ordinary course and consistent with past practice and (D) the granting of Company Stock Options pursuant to written offers of employment that were extended prior to the date hereof);
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(ivc) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment assets of the Company or other assets, any of its subsidiaries (except for (i) sales of assets in the ordinary course of business, (ii) dispositions of obsolete assets or assets no longer useful to the Company in its business consistent with past practiceand (iii) sales of assets which are not, individually or in the aggregate, material to the Company and its subsidiaries, taken as a whole);
(vi) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests (stock, except that a wholly owned Subsidiary subsidiary of the Company may declare and pay a cash dividend to its parent that is not a cross-border dividend (except as provided in clause (ii) below), (ii) declare or allow any subsidiary of the Company);
Company to declare cross-border dividends, or make or allow any subsidiary of the Company to make cross-border capital contributions, in an amount that exceed $250,000 individually or $500,000 in the aggregate; (viiii) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock stock; (iv) except as required by the terms of any security as in effect on the date hereof, and except to the extent necessary to effect any right of a grantee to have shares of Company Common Stock withheld to meet minimum tax withholding obligations in connection with any equity award under any Company Employee Plan that is outstanding and in effect on the date of this Agreement, amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary to amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, shares of Company Common Stock, or any option, warrant or right, directly or indirectly, to acquire any such securities; or (v) settle, pay or discharge any claim, suit or other action brought or threatened against the Company with respect to or arising out of a stockholder's equity interestsinterest in the Company;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiii) acquire (by merger, consolidation, or acquisition of stock or assets or otherwiseassets) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereof;
, or any equity interest therein, other than those listed on Section 4.01 of the Company Disclosure Schedule; (ixii) incur any indebtedness for borrowed money money, except for borrowings and reborrowings under the Company's or any of its subsidiaries' existing credit facilities listed on Section 2.05 of the Company Disclosure Schedule and other borrowings not in excess of $500,000 in the aggregate, or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries subsidiaries entered into in the ordinary course of business) or endorse endorse, or otherwise as an accommodation become responsible for for, the obligations of any Personperson, or make any loans, advances loans or enter into any financial commitmentsadvances, except in any such case in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
business; (xiii) authorize any capital expenditures or purchases of fixed assets other than pursuant to the Company's existing capital expenditures budget, a copy of which has been delivered to Parent, except for capital expenditures or purchases which are, in the aggregate, not in excess of $175,000 in 1,000,000, and except for the aggregaterepair or replacement of damaged assets from the proceeds of insurance with respect thereto; or (iv) enter into or materially amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.01(e);
(xi) take or permit to be taken any action to: (Ai) increase the compensation or severance payable or to become payable to its directors, officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to of employees of the date of this Agreement Company or otherwise its subsidiaries in the ordinary course of business consistent with past practicebusiness; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (Cii) grant any severance or termination pay toto any director, officer or employee of the Company or any of its subsidiaries (except to make payments required to be made under obligations existing on the date hereof in accordance with the terms of such obligations); (iii) enter into any employment or severance agreement with, with respect to which the total annual compensation or the aggregated severance payments exceed $150,000 with any prospective officer or employee except in accordance with agreements entered into before of the date Company or any of this Agreement or otherwise in the ordinary course of business consistent with past practiceits subsidiaries; (Div) enter into or modify any collective bargaining agreementagreement with any director of the Company or any of its subsidiaries; or (Ev) establish, adopt, enter into or amend in any material respect any bonuscollective bargaining agreement, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other planCompany Employee Plan, trust, fund, policy or arrangement for the benefit of any of its current or former directors, officers or employeesemployees or any of their beneficiaries, except, in each case of this clause, (x) as may be required by law or (y) as would not result in a material increase in the cost of maintaining such collective bargaining agreement, Company Employee Plan, trust, fund, policy or arrangement and would not otherwise impose any material restraint on the business or operations of the Company or any of its subsidiaries;
(xiig) take any action to change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless except in the ordinary course of business or as required by statutory accounting principles law or GAAP or in connection with the MergerGAAP;
(xiiih) make any Tax tax election or settle or compromise any material United States federal, state, local or foreign Tax liability, or agree non-United States tax liability if the effect thereof would be adverse in any material respect to an extension of a statute of limitations with respect theretothe Company;
(xivi) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, dischargedischarge or satisfy any claims, satisfy liabilities or settle any material litigation obligations (absolute, accrued, asserted or waiveunasserted, assign contingent or release any rights otherwise), except for the payment, discharge or claims with respect thereto, other than settlements satisfaction in the ordinary course of business that involve only of liabilities reflected or reserved against in the financial statements contained in the Company SEC Reports filed prior to the date of this Agreement or incurred in the ordinary course of business and except for any other payment, discharge or satisfaction in an amount not to exceed $75,000 in the aggregate, which settlement, discharge or satisfaction, in either such case, provides for a complete release for the Company and its subsidiaries and which imposes no obligation on the Company and its subsidiaries other than the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rightsmoney as aforesaid;
(xvj) fail make any loan to maintain in full force and effect all material insurance policies currently in effectany director, officer, employee or permit any independent contractor of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent Company or any of its affiliates) could be considered reasonably likely subsidiaries, with the exception of loans made in order to prevent effect a cashless exercise of any Stock Option in accordance with its terms or the Merger from qualifying as a reorganization within the meaning of Section 368(a) terms of the Code;
(xvii) take any action plan under which it was granted or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only advances for expenses in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xixk) authorizetake, recommendor agree in writing or otherwise to take, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingactions described in Sections 4.01(a) through (j) above.
Appears in 2 contracts
Samples: Merger Agreement (Scientific Games Holdings Corp), Merger Agreement (Autotote Corp)
Conduct of Business Pending the Merger. 4.1 Section 5.01 Conduct of Business of by the Company Pending the Merger.
(a) The Company covenants and agrees that, between . From the date hereof and until the earlier to occur of the Effective Time or such earlier time as and the termination of this Agreement is terminated pursuant to ARTICLE VIII, except as set forth in accordance Section 5.01 of the Company Disclosure Schedule, as required by applicable Law, or as provided in or contemplated by this Agreement, (A) the Company shall use commercially reasonable efforts to conduct the business of Group Companies in the ordinary course in all material respects and use its commercially reasonable efforts, consistent with Article VII past practice, to preserve intact its business organizations and relationships with third parties and to keep available the services of its present officers and employees, and (such period being hereinafter referred to as B) without limiting the "Interim Period"generality of clause (A), except as expressly required by this Agreement or unless with the prior written consent of Parent shall otherwise consent in writing, (which consent shall not be unreasonably withheld, each conditioned or delayed), the Company shall not, nor shall it permit any of the Company and its SubsidiariesGroup Companies to:
(ia) shall conduct amend its business only in the ordinary course memorandum and articles of business, consistent with past practice; association or equivalent organizational documents;
(iib) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, keep available the services of their officers, employees and consultants and maintain in effect all Company Material Contracts. By way of amplification and not limitation, except as expressly permitted by this Agreement, neither the Company nor any of its Subsidiaries shall , during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent:
(i) amend split, combine or reclassify any shares in its Certificate of Incorporationshare capital, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of its share capital, except for dividends by any of its direct or indirect wholly-owned Subsidiaries or (iii) redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any share capital stock or other equity interests (except that a wholly owned Subsidiary registered capital of the Company may declare and pay a cash dividend to or any other Group Company, other than the Company);
(vi) split, combine or reclassify any shares acquisition by the Company of its capital stock or other securities or equity interests, or issue any other securities in respect ofconnection with the forfeiture of Company Options or repurchase of unvested Company Restricted Shares, in lieu of or in substitution for shares the acquisition by the Company of its capital stock or equity interests;
(vii) sellsecurities in connection with the net exercise of Company Options in accordance with the terms thereof, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose the forfeiture of any Company Intellectual Property, or amend or modify in any material respect any existing agreements shares to satisfy tax withholding with respect to any Company Intellectual Property Equity Awards or the transfer or other than in disposition of securities between or among the ordinary course of business consistent with past practiceCompany and its direct or indirect wholly owned Subsidiaries;
(viiic) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of any share capital or registered capital of the Company or any other Group Company (including any Company Equity Award), other than the issuance of any share capital or registered capital of the Company pursuant to the Company Equity Awards outstanding as of the date hereof, the transfer or other disposition of securities between or among the Company and its direct or indirect wholly owned Subsidiaries, or pursuant to existing contracts or commitments;
(d) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any assets, securities, properties, interests or businesses with a value in excess of US$500,000 in any single transaction or series of related transactions, other than (i) any corporation, limited liability company, partnership, joint venture pursuant to existing contracts or other business organization commitments or division thereof(ii) in the ordinary course of business;
(ixe) sell, lease or otherwise transfer any of its assets, securities, properties, interests or businesses with a value in excess of US$500,000 in any single transaction or series of related transactions, other than (i) pursuant to existing contracts or commitments or (ii) in the ordinary course of business;
(f) make any material loans, advances or capital contributions to, or investments in, any other person, other than in the ordinary course of business or in an amount not in excess of US$500,000 in any single transaction or series of related transactions or between the Group Companies;
(g) incur any indebtedness for borrowed money or issue guarantees thereof with an amount in excess of US$500,000 in any debt securities single transaction or assumeseries of related transactions, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business(i) any indebtedness or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except guarantee incurred in the ordinary course of business or (ii) incurred between the Company and any of its direct or indirect wholly owned Subsidiaries or between any of such direct or indirect wholly owned Subsidiaries;
(h) other than expenditures necessary to maintain existing assets in good repair, authorize or make any commitment with respect to, any capital expenditures which are in excess of US$500,000;
(i) make any material change to the Company’s methods of accounting, except as otherwise permitted under required to conform to changes in statutory or regulatory accounting rules or GAAP or regulatory requirements related thereto;
(j) settle, or offer or propose to settle, (i) any loan material litigation, investigation, arbitration, proceeding or credit other claim involving or against the Company or any of its Subsidiaries, (ii) any shareholder litigation or dispute against the Company or any of its officers or directors or (iii) any litigation, arbitration, proceeding or dispute that relates to the Transactions, in each case other than any settlement (A) in the ordinary course of business or pursuant to existing contracts or commitments, (B) requiring the Company and its Subsidiaries to pay monetary damages not exceeding US$500,000, and (C) not involving the admission of any material wrongdoing by the Company or any of its Subsidiaries;
(k) make or change any material Tax election, amend any material Tax return (except as required by applicable Law), enter into any closing agreement with respect to which a material amount of Tax, surrender any right to claim a material refund of Taxes, settle or finally resolve any controversy with respect to a material amount of Tax, or change any Tax accounting period for purposes of a material Tax or material method of Tax accounting or Tax accounting period, or take any action outside the ordinary course of business that could reasonably be expected to result in the Company or any of its Subsidiaries is being required to include a party as material item of income in, or exclude a material deduction from, a Tax return for a period beginning after the date of this AgreementClosing Date;
(xl) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice, enter into, amend or modify, in any material respect, or terminate, or waive any material rights under, any Material Contract (or Contract that would be a Material Contract if such Contract had been entered into prior to the date hereof);
(m) engage in the conduct of any new line of business material to the Company and its Subsidiaries, taken as a whole;
(n) fail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(o) (A) transfer, sell, assign, mortgage, surrender, encumber, grant any security interest in, divest, cancel, disclaim, abandon, allow to lapse or expire (including by failure to pay required fees but except in the ordinary course of prosecution before Governmental Authority), dedicate to the public, or otherwise dispose of, any Company Owned Intellectual Property, other than cancellation, abandonment, allowing to lapse or expire such Company Owned Intellectual Property that is no longer used or useful in any of the Company’s or its Subsidiaries’ respective businesses or pursuant to Contracts in effect prior to the date hereof; (B) grant any additional severance licenses or termination pay toother Contracts, in each case, that are material to the business of any Group Company, to any third party except non-exclusive licenses in the ordinary course of business or enter into any employment or severance agreements with, its officerspursuant to Contracts in effect prior to the date hereof; (C) disclose to or allow to be disclosed to or discovered by any Person any trade secrets material to the business of any Group Company except pursuant to valid and appropriate non-disclosure or license agreements or pursuant to obligations to maintain the security and confidentiality thereof arising by operation of law; or (D) fail to continue to follow and practice the intellectual property, information security, and privacy measures, policies and procedures of the Company or its Subsidiaries in substantially the same manner, consistent with past practice;
(p) except as required by any Share Incentive Plan, Company Employee Plan, or Company Employee Agreement in effect on the date hereof, as required by applicable Law, (A) increase the compensation, bonus, pension, welfare or other benefits of any of its Company Personnel, except in the ordinary course consistent with past practice which increases, payment or awards, in the aggregate, do not cause an increase in the labor costs of the Group Companies, taken as a whole, by more than 5%; (B) grant any severance or termination pay topay, or any retention pay; (C) enter into or amend any employment employment, consulting or severance agreement withor arrangement with any of its present directors, any employee except in accordance with agreements entered into before the date of this Agreement officers, or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreementkey employees; or (E) establish, adopt, enter into or amend in or terminate any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing DateShare Incentive Plan; or
(xviiiq) authorizeagree, recommend, propose, announce resolve or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement commit to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Wang Benson Haibing), Merger Agreement (Taomee Holdings LTD)
Conduct of Business Pending the Merger. 4.1 Conduct of Business of the Company Pending the Merger.
(a) SECTION 6.01. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The Company covenants and agrees that, between the date hereof of this Agreement and the earlier to occur of the Effective Time Time, unless Parent shall otherwise agree in writing, or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required contemplated by this Agreement or unless Parent shall otherwise consent described in writingSection 6.01 of the Disclosure Schedule, which consent shall not be unreasonably withheld, each the businesses of the Company and its Subsidiaries:
(i) the Subsidiaries of the Company shall conduct its business be conducted only in in, and the Company and the Subsidiaries of the Company shall not take any action except in, the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except business and in the ordinary course of business, a manner consistent with past practice; and (iii) the Company shall use its commercially reasonable best efforts consistent with its obligations under this Agreement to preserve substantially intact its the business organizationorganization of the Company and the Subsidiaries of the Company, properties and assets, to keep available the services of their the current officers, employees and consultants of the Company and maintain the Subsidiaries of the Company and to preserve the current relationships of the Company and the Subsidiaries of the Company with customers, suppliers and other persons with which the Company or any Subsidiary of the Company has significant business relations; PROVIDED THAT nothing in effect all this Section 6.01 shall require the Company Material Contractsor the Subsidiaries of the Company to make any payments to any officer, employee, consultant or other person who is not otherwise entitled to receive such payments solely in order to keep available the services of, or preserve any current relationship with, any such person, unless such payments would be in the ordinary course of business consistent with past practice. By way of amplification and not limitation, except as expressly permitted contemplated by this AgreementAgreement and Section 6.01 of the Disclosure Schedule, neither the Company nor any Subsidiary of its Subsidiaries shall the Company shall, during between the Interim Perioddate of this Agreement and the Effective Time, directly or indirectly, do do, or propose to do, any of the following without the prior written consent of Parent:
(ia) amend or otherwise change its Restated Certificate of Incorporation, Bylaws Incorporation or other By-laws or equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(iib) issue, sell, transferpledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, dispose of disposition, grant or encumber encumbrance of, (i) any shares of any class of capital stock of the Company or any classSubsidiary of the Company, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary of its Subsidiariesthe Company (except for the securities issuable pursuant to the Warrants or Company Stock Options, in each case as set forth on Section 4.03 of the Disclosure Schedule) or (ii) any assets of the Company or any Subsidiary of the Company, except, in the case of (ii) in the ordinary course of business and in a manner consistent with past practice;
(iiic) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for dividends by any direct or indirect wholly owned Subsidiary of the Company to the Company or any other Subsidiary of the Company;
(d) reclassify, combine, split, subdivide or redeem, repurchase or purchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiariescapital stock;
(ive) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiii) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets or otherwiseany other business combination) any corporation, limited liability company, partnership, joint venture or other business organization or any division thereof;
thereof or any significant amount of assets; (ixii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans or advances, or grant any security interest in any of its assets; (iii) enter into any contract or agreement that would be a Material Contract, (iv) enter into any distribution or manufacturing contract or agreement, other than guarantees of bank debt of the Company's Subsidiaries contracts or agreements (including intellectual property contracts) entered into in the ordinary course of businessbusiness and consistent with past practice; (v) or endorse or otherwise as an accommodation become responsible for the obligations of any Personauthorize, or make any loanscommitment with respect to, advances any capital expenditure in any manner not reflected in the capital budget of the Company attached as Section 6.01(e)(v) of the Disclosure Schedule; or (vi) enter into or amend any financial commitmentscontract, except agreement, commitment or binding arrangement with respect to any matter set forth in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this AgreementSection 6.01(e);
(xf) authorize take any capital expenditures action that would have the effect, directly or indirectly, of paying or discharging any of the Company Expenses for an amount in excess of $175,000 2,340,000 in the aggregate;
(xig) take except as specifically contemplated or permit to be taken any action to: (A) provided for in this Agreement, increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business and consistent with past practice; (B) grant practice in salaries, wages, bonuses or incentives of employees of the Company or any additional severance Subsidiary of the Company who are not directors or termination pay toofficers of the Company, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee except in accordance with agreements entered into before of the date Company or of this Agreement any Subsidiary of the Company, or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any collective bargaining, bonus, profit profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directorsdirector, officers officer or employeesemployee;
(xih) change any of the accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), methods used by it unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiiii) make any Tax tax election other than immaterial tax elections in the ordinary course consistent with past practice or settle or compromise any material United States federal, state, local or foreign Tax non-United States material income tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xivj) pay, dischargedischarge or satisfy any material claim, satisfy liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such liabilities in the ordinary course of business and consistent with past practice;
(k) amend, modify or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of the Company's or its Subsidiary's material rights thereunder, other than in the ordinary course of business and consistent with past practice;
(l) commence or settle any litigation or waive, assign or release any rights or claims with respect theretoAction;
(xvm) fail to maintain pay, discharge or satisfy any claim, liability or obligation in full force and effect all insurance policies currently in effect, or permit any accordance with the ordinary course of business of the coverage thereunder to lapseCompany, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease consistent with respect to real propertypast practice; or
(xixn) authorizeannounce an intention, recommend, propose, announce or enter into any agreementformal or informal agreement or otherwise make a commitment, contract, commitment or arrangement to do any of the foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Bei Medical Systems Co Inc /De/), Merger Agreement (Bei Medical Systems Co Inc /De/)
Conduct of Business Pending the Merger. SECTION 4.1 Conduct of Business of by the Company Pending the Merger.
(a) The . Each of the Company and the Stockholder covenants and agrees that, between during the period from the date hereof of this Agreement and continuing until the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by termination of this Agreement or the Effective Time, unless Parent shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, each of the Company shall, and its Subsidiaries:
(i) the Stockholder shall cause the Company to, conduct its business only and shall cause the businesses of its subsidiaries to be conducted in all material respects in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) the Company shall, and the Stockholder shall cause the Company to, use its all reasonable best commercial efforts to preserve substantially intact the business organization of the Company and its business organizationsubsidiaries taken as a whole, properties and assets, to keep available the services of their the present key officers, employees and consultants of the Company and maintain in effect all its subsidiaries taken as a whole and to preserve the present relationships of the Company Material Contractsand its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, neither the Company nor any of its Subsidiaries subsidiaries shall, and the Stockholder shall cause the Company not to, during the Interim Periodperiod from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectlyindirectly do, do or propose to do, any of the following without the prior written consent of Parent:
(ia) amend its or otherwise change the Certificate of Incorporation, Bylaws Incorporation or other equivalent organizational documents, By- Laws of the Company or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseany of its subsidiaries;
(iib) issueissue (except for the issuance of shares upon the exercise of any outstanding stock options), sell, transfer, pledge, dispose of or encumber encumber, or authorize the issuance (except for the issuance of shares upon the exercise of any outstanding stock options), sale, pledge, disposition or 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 of (including, without limitation, any phantom interest) in the Company or any of its Subsidiaries;subsidiaries.
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(ivc) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment assets of the Company or other assets, any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practicepractice and (ii) dispositions of obsolete or worthless assets);
(vi) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests (stock, except that a wholly owned Subsidiary subsidiary of the Company may declare and pay a cash dividend to the Company);
its parent, (viii) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock stock, or equity interests(iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary to purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, shares of Company Common Stock or any option, warrant or right, directly or indirectly, to acquire shares of Company Common Stock, including the Stock Options, except with respect to Stock Options, to the extent the Company may be otherwise contractually required, or enter into any agreement to do any of the foregoing;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiii) acquire (by merger, consolidation, or acquisition of stock or assets assets) any business or otherwise) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practicedivision; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for for, the obligations of any Personperson, except in each case in the ordinary course of business consistent with past practice, or make any loans, advances loans or advances; (iii) enter into or amend any financial commitments;
contract or agreement other than in the ordinary course of business; (ixiv) authorize any capital expendituresexpenditures or purchase of fixed assets which are, in the aggregate, in excess of $100,000 for the Company and its subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(e);
(x) take or permit to be taken any action to: (Ai) increase the compensation payable or to become payable to its officers executive officers, directors or employees, employees except for increases in salary or wages in accordance the ordinary course of business consistent with agreements entered into prior to the date of this Agreementpast practice; (Bii) grant any additional severance or termination pay to, or enter into any new employment or severance agreements with, any director, executive officer or current employee of the Company or its officerssubsidiaries; (Ciii) grant any severance or termination pay to, or enter into any employment or severance agreement with, with any employee new employees of the Company or its subsidiaries except in accordance the ordinary course of business consistent with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreementpast practice; or (Eiv) establish, adopt, enter into or amend in any material respect any bonuscollective bargaining, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, compensation or severance or other plan, trust, fund, fund or policy or arrangement for the benefit of any of its current or former directors, officers or employeesemployees of the Company or any of its subsidiaries, except, in each case, as may be required by law;
(xig) except as required under generally accepted accounting principles, take any action to change in any material respect the accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable) of the Company or any subsidiary (except in the case of subsidiaries to conform to the Company's policies and procedures), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiiih) make any Tax tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability, tax liability or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapselimitations, in each case without simultaneously securing replacement insurance policies which will would be in full force material to the Company and effect and provide coverage substantially similar to or greater than under the prior insurance policiesits subsidiaries taken as a whole;
(xvii) take pay, discharge or satisfy any action that claims, liabilities or obligations (without regard absolute, accrued, asserted or unasserted, contingent or otherwise) material to any action taken, or agreed to be taken, by the Company or any of and its affiliates) could be considered reasonably likely to prevent the Merger from qualifying subsidiaries taken as a reorganization within whole, other than the meaning payment, discharge or satisfaction in the ordinary course of Section 368(a) business and consistent with past practice of liabilities reflected or reserved against in the Code;
(xvii) take any action or fail financial statements contained in the Company SEC Reports filed prior to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III date of this Agreement becoming untrue or incurred in any material respect or (B) any the ordinary course of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease business and consistent with respect to real propertypast practice; or
(xixj) authorizetake, recommendor agree in writing or otherwise to take, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingactions described in Sections 4.1 (a) through (i) above.
Appears in 1 contract
Samples: Merger Agreement (Hunter Terry L)
Conduct of Business Pending the Merger. 4.1 Conduct of Business of the Company Pending the Merger.
(ai) The Company covenants and agrees that, between the date hereof of this Agreement and the earlier to occur of the Effective Time or such earlier time as termination of this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Agreement, except as expressly required by this Agreement set forth on SCHEDULE 5.1(a) or unless Parent the Purchaser shall otherwise consent in writing:
(a) the business of the Company and its Subsidiaries shall be conducted only in, which consent and the Company shall not be unreasonably withheldand shall cause its Subsidiaries not to take any action except in, each the ordinary course of business and in a manner consistent with past practice and in compliance in all material respects with all applicable Laws; and the Company will use its commercially reasonable efforts to preserve substantially intact the business organization of the Company and its Subsidiaries:
(i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, keep available the services of their the present officers, employees and consultants of the Company and maintain in effect all its Subsidiaries and to preserve the present relationships of the Company Material Contracts. By way and its Subsidiaries with their respective customers, suppliers and other Persons with which the Company or any of amplification and not limitation, except as expressly permitted by this Agreement, its Subsidiaries has significant business relations.
(b) neither the Company nor any of its Subsidiaries shall will amend their respective Certificate of Incorporation or By-Laws (or comparable organizational documents);
(c) the Company will not declare, during set aside or pay any dividend or other distribution payable in cash, securities or property with respect to its capital stock, other than the Interim Period, directly or indirectly, do payment of quarterly cash dividends on the Shares not in excess of $0.07 per Share with usual record and payment dates in accordance with past dividend practice; and neither the Company nor any of the following without the prior written consent of Parent:
its Subsidiaries will (i) amend split, combine or reclassify any of its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
capital stock (ii) issue, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class, class of the Company or any of its Subsidiaries, other than issuances of Shares pursuant to securities, options, warrants, convertible securities calls, commitments or rights existing at the date hereof and previously disclosed to the Purchaser in writing (including as disclosed in the SEC Reports); (iii) incur any long-term indebtedness (whether evidenced by a note or other rights of any kind instrument, pursuant to acquire any shares of capital stocka financing lease, sale-leaseback transaction, or otherwise) or incur short-term indebtedness other than, in each case, under lines of credit existing on the date hereof, or in connection with the capital expenditures permitted by SECTION 5.1(h) below; (iv) redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or other ownership interest securities except as required by and in accordance with Restricted Stock Award Agreements existing on the date hereof; or (v) enter into, amend, terminate, renew or fail to use reasonable efforts to renew in any material respect any (x) Material Contract or (y) Identified Contract except, in each case, in the ordinary course of business consistent with past practice; provided, that the limitations set forth in SECTION 5.1(c) shall not apply to any transaction between the Company and its Subsidiaries.
(d) neither the Company nor any of its Subsidiaries will, except for normal increases in the ordinary course of business consistent with past practice or pursuant to employment contracts in effect on the date hereof: (i) grant any increase in the compensation or benefits payable or to become payable by the Company or any of its Subsidiaries to any employee; (ii) adopt, enter into, amend or otherwise increase, or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under any bonus, incentive compensation, deferred compensation, severance, termination, change in control, retention, hospitalization or other medical, life, disability, insurance or other welfare, profit sharing, stock option, stock appreciation right, restricted stock or other equity based, pension, retirement or other employee compensation or benefit plan, program, agreement or arrangement; or (iii) enter into or amend in any material respect any employment or collective bargaining agreement or, except in accordance with the existing written policies of the Company or existing contracts or agreements and as disclosed on SCHEDULE 5.1(d) of the Disclosure Schedule, grant any severance or termination pay to any officer, director or employee of the Company or any of its Subsidiaries;
(e) neither the Company nor its Subsidiaries will change in any material manner the accounting principles used by it unless required by GAAP (or, if applicable with respect to Subsidiaries, foreign generally accepted accounting principles);
(f) neither the Company nor any of its Subsidiaries shall acquire by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire any assets of any other Person (other than (i) as permitted by SECTION 5.1(h) or (ii) the purchase of assets from suppliers or vendors in the ordinary course of business consistent with past practice);
(g) neither the Company nor any of its Subsidiaries shall sell, lease, license, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any of its assets except (i) the assets set forth on SCHEDULE 5.1(g) of the Disclosure Schedule, (ii) immaterial assets in the ordinary course of business consistent with past practice; or (iii) redeeminventory in the ordinary course of business consistent with past practice;
(h) neither the Company nor any of its Subsidiaries will enter into commitments for capital expenditures involving more than $1,000,000 in the aggregate or as may be necessary for the maintenance of existing facilities, repurchase machinery and equipment in good operating condition and repair in the ordinary course of business, or otherwise acquire, directly or indirectly, any shares of as reflected in the capital stock plan of the Company or interest in or securities of previously provided to the Purchaser;
(i) neither the Company nor any of its SubsidiariesSubsidiaries shall release any third party from its obligations (i) under any existing standstill agreement or arrangement relating to a proposed Acquisition Proposal (as defined in SECTION 5.2(a)), unless the Board of Directors of the Company determines in good faith after consultation with its outside counsel (who may be its regularly engaged outside counsel), that the failure to do so would result in a breach of its the fiduciary duties under applicable Law, or (ii) otherwise under any confidentiality or other similar agreement, except for modifications of any such obligations under existing commercial arrangements in the ordinary course of business consistent with past practice;
(ivj) sell, transferthe Company and its Subsidiaries shall not mortgage, pledge, dispose hypothecate, grant any security interest in, or otherwise subject to any other lien on any of its properties or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(vk) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of neither the Company may declare and pay a cash dividend to the Company);
(vi) splitnor its Subsidiaries shall compromise, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumbersettle, grant any waiver or release relating to or otherwise dispose of adjust any Company Intellectual Propertyclaims, liabilities or amend obligations (absolute, accrued, asserted or modify in unasserted, contingent or otherwise), including any material respect litigation, except for any existing agreements with respect to any Company Intellectual Property other than such compromise, settlement, waiver, release or adjustment (x) in the ordinary course of business consistent with past practice, (y) involving a payment by the Company or any of its Subsidiaries not in excess of $250,000 in the aggregate, or (z) set forth on SCHEDULE 5.1(k) of the Disclosure Schedule, following prior notice to and consultation with the Purchaser;
(viiil) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which consistent with past practice, neither the Company or nor any of its Subsidiaries is a party as will make or rescind any express or deemed election or settle or compromise any material claim or material action relating to U.S. federal, state or local Taxes, or change any of the date its material methods of this Agreementaccounting or of reporting income or deductions for U.S. federal income tax purposes;
(xm) authorize neither the Company nor any of its Subsidiaries will make any loans, advances or capital expenditures in excess of $175,000 in the aggregate;
(xi) take contributions to, or permit to be taken investments in, any action to: (A) increase the compensation payable to its officers or employeesother Person, except for increases in salary or wages pursuant to and in accordance with agreements entered into prior to existing on the date hereof that are described on SCHEDULE 5.1(m) 33 38 of this Agreement the Disclosure Schedule and for loans, advances, capital contributions or otherwise investments between any wholly owned Subsidiary of the Company and the Company or another wholly owned Subsidiary of the Company and except for employee advances for expenses in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviiin) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless neither the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or nor any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or will enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any an agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 Section 6.1. Conduct of Business of by the Company Pending the Merger.. Prior to the Effective Time, unless Parent shall otherwise agree in writing, or as set forth on Schedule 6.1 or as otherwise expressly contemplated by this Agreement:
(a) The Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by this Agreement or unless Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld, each of the Company shall, and shall cause its Subsidiaries:
(i) shall Subsidiaries to, conduct its business their respective businesses only in the ordinary and usual course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its their reasonable best efforts to preserve intact its their present business organization, properties and assets, keep available the services of their officerspresent officers and key employees, employees and consultants and maintain in effect all Company Material Contracts. By way preserve the goodwill of amplification and not limitation, except as expressly permitted by this Agreement, neither those having business relationships with them; the Company nor shall not, and shall not permit any of its Subsidiaries shall Subsidiary to, during hire any person to any position as an employee or as a consultant to the Interim Period, directly Company or indirectly, do any a Subsidiary of the following without Company where the prior written consent of Parent:total annual compensation payable to such person, whether in cash or otherwise, would exceed $100,000;
(b) the Company shall not, and shall not permit any Subsidiary to, (i) amend its Certificate of Incorporationtheir respective charters, Bylaws By-laws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issuesplit, sell, transfer, pledge, dispose of combine or encumber reclassify 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 their outstanding capital stock, or any other ownership interest of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether payable in cash, stock or other securities or property, or (iv) directly or indirectly redeem or otherwise acquire any combination thereof) in respect shares of any of its their capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company)stock;
(vic) splitthe Company shall not, combine and shall not permit any Subsidiary to, (i) authorize for issuance, issue or reclassify sell or agree to issue or sell any shares of, or rights or securities of its any kind to acquire, rights or securities convertible into any shares of, their respective capital stock (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement, (ii) merge or consolidate with another entity, (iii) acquire or purchase an equity interest in or a substantial portion of the assets of another corporation, partnership or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant business organization or otherwise dispose of any Company Intellectual Property, or amend or modify in acquire any material respect any existing agreements with respect to any Company Intellectual Property other than in assets outside the ordinary and usual course of business and consistent with past practice or otherwise enter into any material contract, commitment or transaction outside the ordinary and usual course of business consistent with past practice;
, (viiiiv) acquire (by mergerexcept as noted on Schedule 6.1(c)(iv), consolidationsell, acquisition lease, license, waive, release, transfer, encumber or otherwise dispose of stock or any of its material assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in outside the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary and usual course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant , including any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in shares the Company Disclosure Schedulesholds of HealxxXxxx.xxx, payXxc., discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declareincur, set aside assume or pay prepay any dividend or other distribution (whether in cash, stock or other securities or property, material indebtedness or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.other
Appears in 1 contract
Samples: Merger Agreement (Uici)
Conduct of Business Pending the Merger. 4.1 SECTION 5.01. Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between the date hereof of this Agreement and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Time, except as expressly required contemplated by any other provision of this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule, unless Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld, each :
(a) the businesses of the Company and its Subsidiaries:
(i) Subsidiaries shall conduct be conducted only in, and the Company and its business only in Subsidiaries shall not take any action except in, the ordinary course of business, business and in a manner consistent with past practice; and
(iib) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) Company shall use its commercially reasonable best efforts to preserve substantially intact its the business organizationorganization of the Company and the Subsidiaries, properties and assets, to keep available the services of their the current officers, employees and consultants of the Company and maintain in effect all the Subsidiaries and to preserve the current relationships of the Company Material Contractsand the Subsidiaries with customers, suppliers and other Persons with which the Company or any Subsidiary has significant business relations. By way of amplification and not limitation, except Except as expressly permitted contemplated by any other provision of this AgreementAgreement or as set forth in Section 5.01 of the Company Disclosure Schedule, neither the Company nor any Subsidiary shall, between the date of its Subsidiaries shall , during this Agreement and the Interim PeriodEffective Time, directly or indirectly, do do, or propose to do, any of the following without the prior written consent of Parent:
(ia) amend or otherwise change its Certificate of Incorporation, Bylaws Incorporation or other By-laws or equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(iib) issue, sell, transferpledge, dispose of, grant or encumber, or authorize such issuance, sale, pledge, dispose of disposition, grant, or encumber encumbrance of:
(i) any shares of any class of capital stock of the Company or any classSubsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except for the issuance of its SubsidiariesShares issuable pursuant to employee stock options outstanding on the date of this Agreement and granted under Company Stock Option Plans in effect on the date of this Agreement); or
(ii) any assets of the Company or any Subsidiary, except in the ordinary course of business and in a manner consistent with past practice;
(iiic) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, repurchase or purchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiariescapital stock;
(ivi) sellacquire (including, transferwithout limitation, pledgeby merger, dispose consolidation, or acquisition of stock or encumber assets or any material propertiesother business combination) any corporation, facilitiespartnership, equipment other business organization or any division thereof or any significant amount of assets;
(ii) issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any Person, or make any loans or advances; or
(iii) enter into or amend any contract or agreement with respect to any matter set forth in this Section 5.01(e), other assets, except than in the ordinary course of business and consistent with past practice;
(vi) declarehire any additional employees other than in the ordinary course of business, set aside except (A) to fill vacancies arising after the date of this Agreement; (B) to hire non-executive employees for the Company's Beijing office; or pay (C) to meet increased production demand.
(ii) make any dividend offers to any employee of an employment position other than the employment position he or other distribution (whether she currently holds, except for offers of an employment position made in cash, stock the ordinary course of business and consistent with past practice in connection with the promotion or other securities demotion of any employee of the Company or property, or any combination thereof) in respect of any of its capital stock Subsidiaries who is not a director or other equity interests officer of the Company;
(iii) increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except that a wholly owned Subsidiary for increases in the ordinary course of business and consistent with past practice in salaries or wages of employees of the Company may declare and pay a cash dividend to or any of its Subsidiaries who are not directors or officers of the Company);
(iv) except as set forth in Section 5.01 of the Company Disclosure Schedule, grant any loan, advance, extensions of credit to current or former employees or forgiveness or deferral of any loans due from any employee, other than any loan, advance or extension of credit to a current employee in circumstances and in amounts consistent with past practice, in any event not to exceed $10,000 for any one employee and $25,000 in the aggregate;
(v) establish, adopt, enter into, terminate or amend any Plan or establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement for the benefit of any director, officer or employee except as required by this Agreement or the Transactions contemplated hereby, or as required by ERISA, the Code or to otherwise comply with applicable Law;
(vi) split, combine or reclassify grant any shares of its capital stock or other securities equity or equity interests, based awards (provided that equity awards may be transferred in accordance with the applicable plan document or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interestsagreement);
(viig) sellenter into, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect respect, or consent to the termination of, any existing agreements with respect Material Contract, or amend, waive or modify in any material respect, or consent to the termination of, the Company's or any Company Intellectual Property Subsidiary's rights thereunder other than in the ordinary course of business consistent with past practice;
(viiih) acquire fail to make in a timely manner any material filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(i) change any Tax election, annual tax accounting period, or method of tax accounting, file amended Tax Returns or claims for Tax refunds by the Company or its Subsidiaries, enter into a closing agreement relating to Taxes or any settlement of any Tax claim, audit or assessment;
(j) make any changes in its accounting methods, principles or practices currently in effect, except as required by changes in GAAP or by Regulation S-X under the Exchange Act, in each case as concurred in by its independent public accountants;
(k) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, acquisition of stock or assets or otherwise) any corporationrestructuring, limited liability company, partnership, joint venture recapitalization or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees reorganization of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of (other than the date of this AgreementTransactions);
(xl) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take except as required by applicable Law or permit to be taken any action to: (A) increase the compensation payable to its officers or employeesGAAP, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend revalue in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directorsassets, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments including writing down the value of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue inventory in any material respect manner, or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied writing-off notices or accounts receivable in any material respect as of the Closing Datemanner; or
(xviiim) authorize, recommend, propose, announce agree or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement commit to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Pure World Inc)
Conduct of Business Pending the Merger. 4.1 SECTION 5.01 Conduct of Business of by the Company Pending the Merger.
(a) Merger The Company covenants and agrees that, between the date hereof of this Agreement and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Time, except as expressly required contemplated by any other provision of this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule, unless Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld, each :
(i) the businesses of the Company and its Subsidiaries:
(i) Subsidiaries shall conduct be conducted only in, and the Company and its business only in Subsidiaries shall not take any action except in, the ordinary course of business, business and in a manner consistent with past practice; and
(ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) Company shall use its all reasonable best efforts to preserve substantially intact its the business organizationorganization of the Company and the Subsidiaries, properties and assets, to keep available the services of their the current officers, employees and consultants of the Company and maintain in effect all the Subsidiaries and to preserve the current relationships of the Company Material Contractsand the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way From the date of amplification this Agreement until the earlier of (i) the Effective Time and not limitation, except as expressly permitted by this (ii) the termination of the Agreement, neither the Company nor any of its Subsidiaries shall , during the Interim PeriodSubsidiary shall, directly or indirectly, do do, or propose to do, any of the following without the prior written consent of ParentParent and except as otherwise expressly contemplated herein:
(ia) amend or otherwise change its Certificate of Incorporation, Bylaws Incorporation or other By-laws or equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(iib) issue, sell, transferpledge, dispose of, grant or encumber, or otherwise subject to any Lien, or authorize such issuance, sale, pledge, dispose of disposition, grant or encumber encumbrance of, or subjection to, any such Lien, (i) any shares of any class of capital stock of the Company or any classSubsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except for the issuance of its SubsidiariesShares issuable pursuant to employee stock options outstanding on the date of this Agreement and granted under Company Stock Option Plans in effect on the date of this Agreement) or (ii) any assets of the Company or any Subsidiary, except in the ordinary course of business and in a manner consistent with past practice and except for Liens in favor of Parent or Purchaser;
(iiic) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for the declaration and payment of dividends by a wholly owned Subsidiary solely to its parent corporation;
(d) reclassify, combine, split, subdivide or redeem, repurchase or purchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiariescapital stock;
(ivi) sellacquire (including, transferwithout limitation, pledgeby merger, dispose consolidation, or acquisition of stock or encumber assets or any material propertiesother business combination) any corporation, facilitiespartnership, equipment other business organization or any division thereof or any significant amount of assets; (ii) incur any indebtedness, whether secured or unsecured and whether under a new or existing credit facility (except borrowings from Parent or Purchaser) or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into any contract or agreement other assets, except than in the ordinary course of business and consistent with past practice; (iv) authorize, or make any commitment with respect to, any capital expenditure which is not specifically referred to in the capital expenditure budget attached hereto as Section 5.01(e) of the Company Disclosure Schedule (the "Company Capital Budget") or, to the extent not included in the Company Capital Budget, any single capital expenditure in excess of $10,000 or capital expenditures in the aggregate in excess of $100,000; or (v) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 5.01(e);
(i) hire any additional employees except to fill current vacancies or vacancies arising after the date of this Agreement, (ii) make any offers to any employee of an employment position other than the employment position he or she currently holds, except for offers of an employment position made in the ordinary course of business and consistent with past practice in connection with the promotion or demotion of any employee of the Company or any of its Subsidiaries who is not a director or officer of the Company, (iii) increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases in the ordinary course of business and consistent with past practice in salaries or wages of employees of the Company or any of its Subsidiaries who are not directors or officers of the Company, (iv) grant any new or additional retention, severance or termination pay to, or enter into any new or additional employment, bonus, change of control or severance agreement with, any director, officer or other employee of the Company or of any of its Subsidiaries, (v) establish, adopt, enter into, terminate or amend any Plan or establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement for the benefit of any director, officer or employee except as required by this Agreement or the Transactions contemplated hereby, or as required by ERISA, the Code or to otherwise comply with applicable Law, (vi) loan or advance money or other property to any current or former director, officer or employee of the Company or any of its Subsidiaries, (vii) grant any equity or equity based awards (provided that equity awards may be transferred in accordance with the applicable plan document or agreement) or (viii) hire or engage any consultant to perform services for a rate of compensation which would be in excess of $25,000 on an annual basis or which is not terminable upon notice of 30 days or less;
(g) effectuate a "plant closing" or "mass layoff," as those terms are defined in WARN (determined without regard to terminations of employment occurring on or after the Effective Time);
(h) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice and other than actions required to be taken in response to changes in GAAP or in Law, with respect to accounting policies or procedures;
(i) make, revoke or change any material Tax election or material method of Tax accounting, file any amended Tax Return (unless required by Law), enter into any closing agreement relating to a material amount of Taxes, settle or compromise any material liability with respect to Taxes or consent to any material claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment; provided, that in the case of the filing of any amended Tax Return, the Company or the relevant Subsidiary shall deliver a copy of such amended Tax Return to Parent at least 30 days prior to filing for Parent's review and consent;
(j) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than in the ordinary course of business and consistent with past practice, unless such payment, discharge or satisfaction is made in accordance with the terms of such claim, liability or obligation as such terms exist on the date of this Agreement;
(k) pay accounts payable, utilize cash, draw down on lines of credit, delay or accelerate capital expenditures, incur expenditures on research and development, other than in the ordinary course of business and consistent with past practice;
(vl) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect respect, or consent to the termination of, any existing agreements Material Contract, or amend, waive or modify in any material respect, or consent to the termination of, the Company's or any Subsidiary's rights thereunder;
(m) commence or settle any Action, other than the settlement of Actions involving payments by the Company or its Subsidiaries not to exceed $100,000 with respect to any Company individual Action or $250,000 in aggregate settlements;
(i) abandon, sell, assign, or grant any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or IP Agreements, (ii) grant to any third party any license, sublicense or covenant not to sue with respect to any Owned Intellectual Proxxxty or Licensed Intellectual Property, other than in the ordinary course of business consistent with past practice, (iii) develop, create or invent any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress as of the date hereof), (iv) disclose, or allow to be disclosed, any confidential Owned Intellectual Property, unless such Owned Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof, or (v) fail to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in each and every item of the Owned Intellectual Property and the Licensed Intellectual Property;
(viiio) acquire (by merger, consolidation, acquisition of stock fail to make in a timely manner any filings with the SEC required under the Securities Act or assets the Exchange Act or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereofthe rules and regulations promulgated thereunder;
(ixp) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course contract or agreement with any director or officer of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent Subsidiary or any of its affiliatestheir respective affiliates (including any immediate family member of such person) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take or any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties other affiliate of the Company set forth in Article II of this Agreement becoming untrue in or any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing DateSubsidiary; or
(xviiiq) authorizeannounce an intention, recommend, propose, announce or enter into any agreement, contract, commitment formal or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, informal agreement or otherwise alter their corporate structure through mergermake a commitment, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Baycorp Holdings LTD)
Conduct of Business Pending the Merger. 4.1 SECTION 6.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, between . From the date hereof and of this Agreement until the earlier to occur of the Effective Time or such earlier time as and the termination of this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")IX, except as otherwise expressly permitted or required by this Agreement Agreement, as set forth in Section 6.1 of the Company Disclosure Schedule, as required by applicable Laws or unless Parent shall otherwise consent in writing, writing (which consent shall not be unreasonably withheld, each conditioned or delayed), (a) (i) the business of the Company and its Subsidiaries:
(i) subsidiaries shall conduct its business only be conducted in the ordinary course of business, business consistent with past practice; practice and good utility practice and (ii) the Company and its subsidiaries shall not take any actionuse their respective commercially reasonable efforts to (x) preserve substantially intact the business organization of the Company and its Significant Subsidiaries, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iiiy) shall use its reasonable best efforts to preserve intact its maintain their respective relationships with Governmental Entities, customers, suppliers, contractors, distributors, creditors, lessors and other third parties that have material business organization, properties and assets, keep available the services of their officers, employees and consultants and maintain in effect all Company Material Contracts. By way of amplification and not limitation, except as expressly permitted by this Agreement, neither dealings with the Company nor any or such subsidiary of the Company and its key employees, (b) the Company shall not, and it shall cause each of its Subsidiaries shall , during the Interim PeriodAffiliates not to, directly or indirectly, do take any action (including any action with respect to a third-party) that would, or would reasonably be expected to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the Merger or the other transactions contemplated by this Agreement or their respective ability to satisfy their obligations hereunder, (c) the Company shall, and shall cause each subsidiary of the Company to, subject to circumstances beyond the Company’s reasonable control, make the capital expenditures as and when required to be made based on any approved allocation to the Company or any of its subsidiaries by the following Regional Transmission Organizations, as part of the transmission planning process, (d) without limiting the prior written consent foregoing, the Company shall not, and shall cause each subsidiary of Parentthe Company not to:
(i) amend its Certificate or otherwise change the Company Articles of Incorporation, Incorporation or the Company Bylaws or other the equivalent organizational documentsdocuments of any Significant Subsidiary, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwisein each case in any material respect;
(ii) issuemake any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any Person, corporation, partnership or other business organization or division thereof or any assets, in each case, except for (A) purchases of equipment, inventory and other assets or pursuant to construction, operation and/or maintenance contracts, in each case in the ordinary course of business and good utility practice or pursuant to existing Contracts or (B) acquisitions or investments that do not exceed $100,000,000 in the aggregate;
(iii) issue or authorize the issuance, pledge, transfer, subject to any Lien, sell, transferor dispose of, pledge, dispose of or encumber any shares of capital stock of any classstock, ownership interests or voting securities, or any options, warrants, convertible securities or other rights of any kind to acquire or receive any shares of capital stock, or any other ownership interest interests or any voting securities (including stock appreciation rights, phantom stock or similar instruments), of the Company or any of its Subsidiariessubsidiaries (except (A) for the issuance of shares of Company Common Stock upon the exercise, vesting or settlement of Options, Restricted Stock, Performance Shares or Equivalent Performance Shares outstanding as of the Capitalization Date or pursuant to the ESPPs, (B) for any issuance, sale or disposition to the Company or a wholly owned subsidiary of the Company by any subsidiary of the Company, (C) for the grant of Restricted Stock on terms and conditions consistent with Section 6.1(d)(iii)(C) of the Company Disclosure Schedule, (D) for the issuance into notional accounts of additional Equivalent Performance Shares in accordance with the terms of the grant agreements relating to Performance Shares outstanding as of the Capitalization Date, or (E) for pledges or Liens relating to any indebtedness incurred in compliance with Section 6.1(d)(x);
(iiiiv) reclassify, combine, split, subdivide or amend the terms of, redeem, repurchase purchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
Significant Subsidiaries (ivexcept (A) sellfor the acquisition of shares of Company Common Stock tendered by directors or employees in connection with a cashless or net settled exercise of Options or in order to pay the exercise price or Taxes in connection with the exercise, transfervesting or settlement of Options, pledge, dispose Restricted Stock or Performance Shares or (B) in connection with a share repurchase program in effect as of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practicedate hereof);
(v) declareother than Permitted Liens or Liens relating to any indebtedness incurred in compliance with Section 6.1(d)(x), set aside create or pay incur any dividend or other distribution (whether Lien in cash, stock or other securities or property, or excess of $50,000,000 in the aggregate of notional debt on any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary material assets of the Company may declare and pay a cash dividend to or its subsidiaries (other than subsidiaries acquired following the Companydate hereof);
(vi) split, combine make any loans or reclassify advances to any shares Person (other than the Company or any of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(viiwholly-owned subsidiaries) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practiceor not in excess of $25,000,000 in the aggregate;
(viiivii) acquire sell or otherwise dispose of (whether by merger, consolidation, acquisition consolidation or disposition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereof;
(ix) incur thereof or otherwise sell, assign, exclusively license, allow to expire, or dispose of any indebtedness for borrowed money material assets, rights or issue any debt securities or assume, guarantee (properties other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers sales, dispositions or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date licensing of this Agreement or otherwise equipment and/or inventory and other assets in the ordinary course of business consistent with past practice; practice or pursuant to Company Material Contracts in effect on the date hereof or (B) grant other sales, assignments, exclusive licenses, expirations or dispositions of assets, rights or properties to the Company or of assets, rights or properties with a value of less than $100,000,000 in the aggregate;
(viii) declare, set aside, make or pay any additional severance dividend or termination pay toother distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (except (A) the Company may continue the declaration and payment of regular quarterly cash dividends on Company Common Stock, not to exceed the amount set forth on Section 6.1(d)(viii) of the Company Disclosure Schedule, with usual record and payment dates for such dividends in accordance with past dividend practice and (B) for any dividend or distribution by a subsidiary of the Company to the Company or wholly owned subsidiary of the Company);
(ix) other than in the ordinary course of business or as required by Law, enter into, terminate, modify or amend in any material respect any Company Material Contract;
(x) except for borrowings in the ordinary course of business under the Company’s and its subsidiaries’ Credit Facilities, except for issuances under the Company’s Commercial Paper Program and except for intercompany loans between the Company and any of its wholly owned subsidiaries or between any wholly owned subsidiaries, incur or repay indebtedness for borrowed money, or enter into modify in any employment material respect in a manner adverse to the Company or severance agreements withUltimate Parent or any of its subsidiaries the terms of any such indebtedness for borrowed money, its officers; or assume, guarantee or endorse the obligations of any Person (other than a wholly owned subsidiary of the Company), other than (A) indebtedness incurred in the ordinary course of business not to exceed $50,000,000 in the aggregate, (B) pursuant to letters of credit in the ordinary course of business, (C) (a) to finance the activities of the Company and its subsidiaries, or (b) in replacement or refinancing of existing indebtedness for borrowed money, which with respect to the Company’s existing indebtedness matures within ninety (90) days of such replacement or refinancing, in each case as disclosed in the 2016 Financing Plan in Annex 6.1(i) of the Company Disclosure Schedule; provided, that (1) the terms (including covenants and default terms, but excluding interest rate, original issue discount, call protection and other financial terms) of such indebtedness are, in the reasonable determination of the Company, consistent with then current market terms or, solely with respect to the replacement or refinancing of existing indebtedness, no more restrictive, when taken as a whole, to the Company or its applicable subsidiary than the terms of the existing indebtedness that is being replaced or refinanced and, with respect to both subsections (C)(a) and (C)(b) above, shall not include any prohibition or restriction or condition restricting the ability of the Company or any of its subsidiaries, as applicable, to pay dividends or other distributions or to make or repay loans or advances to the Ultimate Parent other than (x) restrictions applicable only during the continuance of a default or event of default under the relevant agreement and (y) the restriction set forth in the Term Loan Credit Agreement of the Company, dated as of December 20, 2013, which permits the payment of dividends or other distributions if, after giving effect thereto, the rating of the debt of the Company or any of its subsidiaries, as applicable, shall be BBB— or higher, and any restriction on change of ownership or control shall include an exception for the Merger and (2) any financing of the activities of the Company and its subsidiaries so incurred under subsection (C)(a) may not exceed the aggregate principal amount set forth in the 2016 Financing Plan in Annex 6.1(i) of the Company Disclosure Schedule, and any replacement or refinancing indebtedness so incurred must not exceed the aggregate principal amount of the indebtedness being replaced or refinanced, plus any accrued and unpaid interest on and premiums, fees, costs and expenses paid in connection with such repayment or refinancing, (D) guarantees by the Company or its subsidiaries of indebtedness of its subsidiaries, or (E) any commodity, currency, sale or hedging agreements in the ordinary course, consistent with past practice and good utility practice which can be terminated on ninety (90) days or less notice; provided, that any indebtedness incurred in accordance with this Section 6.1(d)(x) shall not reasonably be expected to adversely affect Ultimate Parent’s, Parent’s or Merger Sub’s ability to consummate the Financing;
(1) except as required by the existing terms of a Company Plan or as set forth on Section 6.1(d)(xi) of the Company Disclosure Schedule, (A) increase the compensation or benefits of any of its officers (except in the ordinary course of business, including pursuant to the Company’s regular merit review process), (B) grant any severance or termination pay to, or enter into to any employment or severance agreement with, any employee of its officers (except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent business), (C) enter into, amend, change or revise any employment, change in control, consulting or severance agreement or arrangement with past practice; the chief executive officer of the Company or any of his direct reports or terminate the chief executive officer of the Company or any of his direct reports other than for cause (as defined under the applicable employment agreement), (D) enter into change any collective bargaining agreement; actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable Laws, (E) take any action to amend, waive or accelerate the vesting criteria or vesting requirements of payment of any compensation or benefit under any Company Plan or remove any existing restrictions in any Company Plans or awards made thereunder or (EF) take any action to accelerate the payment, or to fund or in any other way secure the payment, of compensation or benefits under any Company Plan, to the extent not already provided in any such Company Plan or (2) establish, adopt, enter into or amend in any material respect or terminate any bonusCompany Plan, profit sharingenter into, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance amend or terminate any collective bargaining agreement or other planagreement with a labor union, trust, fund, policy works council or arrangement for the benefit of any of its directors, officers or employeessimilar organization;
(xii) make any material change in any accounting policies principles, except as may be appropriate to conform to statutory or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory regulatory accounting principles rules or GAAP or in connection regulatory requirements with the Mergerrespect thereto;
(xiii) other than in the ordinary course of business or as required by applicable Law or GAAP, (A) make or change any material Tax election or election, (B) surrender any material claim for a refund of Taxes, (C) enter into any agreement materially affecting Taxes due for any taxable period ending after the Closing Date, (D) settle or compromise any material federal, state, local or foreign Tax liabilityliability for Taxes, or agree to an extension of (E) amend in a statute of limitations with material respect theretoany Tax Return;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adoptapplicable Law, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of collective bargaining agreement with any of its directors, officers or employees;
(xi) change labor organization representing any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect theretoCompany Employees;
(xv) fail waive, release, assign, discharge, settle, satisfy or compromise any material litigation, other than the waiver, release, assignment, discharge, settlement, satisfaction or compromises of litigation where the amount paid does not exceed $25,000,000 in the aggregate or, if greater, does not materially exceed the total incurred case reserve amount for such matter maintained by the Company and/or its subsidiaries as in effect prior to maintain in full force and effect all insurance policies currently in effect, or permit any the date of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policiesthis Agreement;
(xvi) take any action that (without regard to any action taken, merge or agreed to be taken, by consolidate the Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as subsidiaries with any Person or adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restricting, recapitalization or other reorganization within the meaning of Section 368(a) of the CodeCompany or any of its subsidiaries;
(xvii) take make or commit any action capital expenditures, in the period from the date hereof until December 31, 2016, or fail in the twelve (12) month period ending December 31, 2017, that in the aggregate exceed the Company’s capital expenditures budget as disclosed in Section 6.1(d)(xvii) of the Company Disclosure Schedule for such period; provided, however, that notwithstanding the foregoing, the Company and its subsidiaries shall be permitted to take make emergency capital expenditures in any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either amount (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect required by a Governmental Entity or (B) that the Company determines is incurred in connection with the repair or replacement of facilities destroyed or damaged due to casualty or accident or natural disaster or other force majeure event necessary to maintain or restore safe, adequate and reliable electric transmission service; provided, further, that the Company shall use commercially reasonable efforts to consult with Parent prior to making or agreeing to make any of the conditions to the Closing set forth such expenditure described in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;clauses (A) or (B) above; or
(xviii) waiveagree, release authorize or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement commit to do any of the foregoing.foregoing actions described in Section 6.1(d)(i) through Section 6.1(d)(xvii); and
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, between Section 5.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. From the date hereof and the earlier of this Agreement to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Time, except as expressly required by this Agreement or unless Parent shall otherwise consent agree in writing, writing (which consent agreement shall not be unreasonably withheldwithheld or delayed), each or as set forth in Section 5.1 of the Company Disclosure Schedule or as expressly contemplated by this Agreement, the Company shall conduct, and shall cause each of its Subsidiaries:
(i) shall conduct Subsidiaries to conduct, its business only in the ordinary and usual course of business, consistent with past practice; (ii) , and the Company shall not take any actionuse, or fail and shall cause each of its Subsidiaries to take any actionuse, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its the present business organization, properties and assets, keep available the services of their officersits present officers and key employees, employees and consultants preserve its existing relationships with customers, suppliers, licensors, licensees, distributors and maintain other having business dealings with them. In addition, without limiting the generality of the foregoing, unless Parent shall otherwise agree in effect all writing (which agreement shall not be unreasonably withheld or delayed), as set forth in Section 5.1 of the Company Material Contracts. By way of amplification and not limitation, except Disclosure Schedule or as expressly permitted otherwise contemplated by this Agreement, neither from the date of this Agreement to the Effective Time the Company shall not, nor shall it permit any of its Subsidiaries shall , during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parentto:
(a) (i) amend its Certificate of IncorporationOrganizational Documents, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its outstanding capital stock or other securities issue or equity interests, or issue authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 outstanding capital stock, or any other ownership interest of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether payable in cash, stock or other securities or property, or property on any combination thereof) in respect of any class of its capital stock stock, or other equity interests;
(viiv) split, combine directly or reclassify indirectly redeem or otherwise acquire (except for deemed acquisitions upon cashless exercises of Options) any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for including without limitation the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.Series B Preferred
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII X (such period being hereinafter referred to as the "“Interim Period"“), except as expressly required by this Agreement or unless Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld, each of conditioned or delayed, the Company and its Subsidiaries:
Company: (i) shall conduct its business only in the ordinary course of business, consistent with past practicepractice and according to the plans and budgets previously delivered to Parent; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, keep available the services of their its officers, employees and consultants and consultants, maintain in effect all Company Material ContractsContracts and preserve its relationships, customers, licensees, suppliers and other Persons with which it has business relations. By way of amplification and not limitation, except as expressly permitted by this Agreement, neither the Company nor any of its Subsidiaries shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their its corporate structure through merger, liquidation, reorganization, restructuring reorganization or otherwise;
(ii) issue, sell, transfer, pledge, dispose of pledge or encumber 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 of the Company, except pursuant to the exercise of Company Options or any Company Warrants outstanding on the date of its SubsidiariesSigning;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities (except for the repurchase of any of its SubsidiariesCompany Common Stock pursuant to the Company Option Plan);
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant encumber or otherwise dispose of incur or assume any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber Lien on any properties, facilities, equipment or other tangible or intangible assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereofPerson;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except as otherwise permitted under any loan or credit agreement to which the Company is a party as of the date of this Agreement;
(ix) authorize any capital expendituresexpenditure in excess of $25,000 individually or $50,000 in the aggregate;
(x) take or permit to be taken any action to: (A) increase the employee compensation payable to its officers or employeesgrant any severance or termination compensation, except for increases in salary or wages in accordance with agreements entered into prior to the date of this AgreementAgreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; (C) hire or terminate any employees, independent contractors or consultants, having a total salary or severance package that is individually in excess of $100,000, or that collectively is in excess of $100,000; or (ED) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy policy, agreement or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company Parent or any of its affiliatesAffiliates) could would be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section section 368(a) of the Code;
(xviixiii) fail to make any expenditures that are necessary and sufficient to maintain or, to the extent budgeted or consistent with the past practice of the Company, improve the conditions of the properties, facilities and equipment of the Company, including, without limitation, budgeted expenditures relating to maintenance, repair and replacement;
(xiv) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to would result in either either: (A) any of the representations and warranties of the Parent or any of its Subsidiaries Company set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement VII not being satisfied in any material respect as of the Closing Datesatisfied;
(xviiixv) waive, release or assign expend more than $425,000 of cash in excess of receipts in any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real propertycalendar month; or
(xixxvi) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Merger. SECTION 4.1 Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between during the period from the date hereof of this Agreement and continuing until the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by termination of this Agreement or the Effective Time, unless Parent shall otherwise consent agree in writingwriting or as otherwise contemplated by this Agreement, which consent shall not be unreasonably withheld, each of the Company shall, and its Subsidiaries:
(i) the Stockholder shall cause the Company to, conduct its business only in in, and the ordinary course of businessCompany shall not, consistent with past practice; (ii) and the Stockholder shall cause the Company not to, take any action, or fail to take any action, action except in the ordinary course of business, business and in a manner consistent with past practicepractice other than actions taken by the Company in contemplation of the Merger; and (iii) the Company shall, and the Stockholder shall cause the Company to, use its all reasonable best commercial efforts to preserve substantially intact its the business organizationorganization of the Company, properties and assets, to keep available the services of their the present officers, employees and consultants of the Company and maintain in effect all to preserve the present relationships of the Company Material Contractswith customers, suppliers and other persons with which the Company has business relations. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, neither the Company nor any of its Subsidiaries shall not, and the Stockholders shall cause the Company not to, during the Interim Periodperiod from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectlyindirectly do, do or propose to do, any of the following without the prior written consent of Parent:
(ia) amend its the Certificate of Incorporation, Bylaws Incorporation or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseBy-Laws of the Company except pursuant to the Merger Agreement;
(iib) issue, sell, transfer, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or 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 of (including, without limitation, any phantom interest) in the Company or any of its SubsidiariesCompany;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(ivc) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment assets (tangible or other intangible) of the Company except for (i) dispositions of obsolete or worthless assets, except (ii) sales of assets not in excess of $25,000 in the aggregate and (iii) sales of assets in the ordinary course of business and in a manner consistent with past practice;
(vd) (i) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests stock, (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(viii) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests(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;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiii) acquire (by merger, consolidation, or acquisition of stock or assets or otherwiseassets) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereof;
; (ixii) except in the ordinary course of business and only under the Company's revolving line of credit, incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for for, the obligations of any Person, or make any loans, advances or enter into any financial commitmentsperson or, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice, make any loans or advances; (Biii) grant enter into or amend any additional severance material contract or termination pay toagreement; (iv) authorize any capital expenditures or purchases of fixed assets which are, in the aggregate, in excess of $50,000 for the Company and its subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(e);
(f) increase the compensation payable or to become payable to its officers, increase compensation payable or to become payable to its employees other in the ordinary course of business, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement withwith any director, any officer or other employee except in accordance with agreements entered into before of the date of this Agreement Company or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; its subsidiaries, or (E) establish, adopt, enter into or amend in any material respect any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any of its current or former directors, officers or employees, except, in each case, as may be required by law;
(xiig) except as required under a new pronouncement that constitutes generally accepted accounting principles, take any action to change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiiih) make any Tax material tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability, tax liability or agree to an extension of a statute of limitations with respect theretolimitations;
(xivi) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, dischargedischarge or satisfy any claims, satisfy liabilities or settle any material litigation obligations (absolute, accrued, asserted or waiveunasserted, assign contingent or release any rights or claims with respect theretootherwise), other than settlements the payment, discharge or satisfaction in the ordinary course of business that involve only and consistent with past practice of liabilities reflected or reserved against in the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing Financial Statements or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only incurred in the ordinary course of business, business and consistent with past practice; or
(iij) shall not take any actiontake, or fail agree in writing or otherwise to take any actiontake, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
actions described in Sections 4.1 (a) through (i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber any shares of capital stock of any classabove, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) 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 action which would make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and or warranties of the Parent or any of its Subsidiaries set forth Company contained in Article III of this Agreement becoming untrue in any material respect or (B) any of incorrect or prevent the conditions Company from performing or cause the Company not to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingperform its covenants hereunder.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 Section 5.1 Conduct of Business of the Company by Meer Pending the Merger.. Prior to the Effective Time, unless Parent shall otherwise agree in writing, or as otherwise expressly contemplated by this Agreement or described on Schedule 5.1 hereto:
(a) The Company covenants and agrees thatMeer shall conduct, between the date hereof and the earlier Stockholders shall cause Meer to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")conduct, except as expressly required by this Agreement or unless Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries:
(i) shall conduct its business only in the ordinary and usual course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) Meer shall use its reasonable best efforts to preserve intact its the present business organization, properties and assets, keep available the services of their officersits present officers and key employees, employees and consultants preserve its business relationships with customers, suppliers and maintain in effect all Company Material Contracts. By way of amplification other third parties;
(b) Meer shall not, and the Stockholders shall not limitation, except as expressly permitted by this Agreement, neither the Company nor any of its Subsidiaries shall , during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent:
permit Meer to (i) amend its Certificate articles of Incorporationincorporation or by-laws, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issuesplit, sell, transfer, pledge, dispose of combine or encumber reclassify 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 its outstanding capital stock, or any other ownership interest of the Company or any of its Subsidiaries;
(iii) redeemexcept as provided in Section 6.8, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether payable in cash, stock or other securities or property, or any combination thereof(iv) in respect of any of its capital stock directly or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine indirectly redeem or reclassify otherwise acquire any shares of its capital stock stock;
(c) Meer shall not, and the Stockholders shall not permit Meer to (i) authorize for issuance, issue or other securities sell or equity interestsagree to issue or sell any shares of, or issue Rights to acquire or convertible into any other securities in respect shares of, in lieu of or in substitution for shares of its capital stock (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), (ii) merge or consolidate with another entity, (iii) acquire or purchase an equity interests;
interest in or a substantial portion of the assets of another corporation, partnership or other business organization or otherwise acquire any assets outside the ordinary and usual course of business and consistent with past practice or otherwise enter into any contract, commitment or transaction outside the ordinary and usual course of business consistent with past practice, (viiiv) sell, transfer, lease, license, sublicensewaive, mortgagerelease, pledgetransfer, dispose of, encumber, grant encumber or otherwise dispose of any Company Intellectual Propertyof its assets outside the ordinary and usual course of business and consistent with past practice, (v) incur, assume, guarantee, secure or prepay any indebtedness (including, without limitation, capitalized lease obligations) or any other liabilities other than in the ordinary course of business and consistent with past practice, (vi) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, (vii) make any loans, advances or capital contributions to, or amend investments in, any other person, (viii) authorize or modify make capital expenditures in excess of the amounts currently budgeted therefor and disclosed to Parent, (ix) permit any material respect insurance policy naming Meer as a beneficiary or a loss payee to be modified, canceled or terminated, except in connection with the simultaneous issuance of a replacement policy providing equivalent coverage, or (x) enter into any existing agreements contract, agreement, commitment or arrangement with respect to any Company Intellectual Property of the foregoing;
(d) Meer shall not, and the Stockholders shall not permit Meer to (i) adopt, enter into, terminate or amend (except as may be required by applicable Laws) any Plan or other than arrangement for the current or future benefit or welfare of any director, officer or current or former employee, (ii) increase in any manner the compensation or fringe benefits of, or pay any bonus to, any director, officer or employee (except for normal increases in salaried compensation in the ordinary course of business consistent with past practice), or (iii) take any action to fund or in any other way secure, or to accelerate or otherwise remove restrictions with respect to, the payment of compensation or benefits under any employee plan, agreement, contract, arrangement or other Plan;
(viiie) acquire (by mergerMeer shall not, consolidationand the Stockholders shall not permit Meer to, acquisition of stock or assets or otherwise) take any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Personaction with respect to, or make any loanschange in, advances its accounting or enter into any financial commitmentstax policies or procedures, except in the ordinary course of business and as otherwise permitted under any loan required by law or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreementcomply with GAAP;
(xf) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit Neither Meer nor any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) Stockholders shall not take any action that would jeopardize (without regard to any action taken, i) the treatment of Parent's acquisition of Meer as a pooling of interests for financial accounting purposes; or agreed to be taken, by Parent or any (ii) the qualification of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xviig) take any action Meer will make or fail cause to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Datemade all necessary filings with all Governmental Entities; orand
(xviiih) authorize, recommend, propose, announce Meer shall promptly provide to Parent a copy of all correspondence and written communications received from or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect supplied to any currently proposed or contemplated business transaction with Take 2Governmental Entity.
4.2 Section 5.2 Conduct of Business of by Parent Pending the Merger.
(a) The Parent covenants and agrees that. Prior to the Effective Time, during the Interim Period, except as expressly required by this Agreement or unless the Company Meer shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as otherwise expressly permitted contemplated by this Agreement, the neither Parent nor Sub shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that would jeopardize (without regard to any action taken, i) the treatment of Parent's acquisition of Meer as a pooling of interests for financial accounting purposes or agreed to be taken, by Company or any (ii) the qualification of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Schein Henry Inc)
Conduct of Business Pending the Merger. 4.1 Conduct Each of Business of Qualmax and the Company Pending the Merger.
(a) The Company covenants and agrees that, between during the period from the date hereof of this Agreement and continuing until the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by termination of this Agreement or the Effective Time, unless Parent the other shall otherwise consent agree in writing, which consent and except as set forth in Schedule 5.01 or as required by law with advance notification to the other, it shall not be unreasonably withheld, each of the Company and its Subsidiaries:
(ia) shall conduct its business and shall cause the businesses of its subsidiaries to be conducted only in in, and it and its subsidiaries shall not take any action except in, the ordinary course of business, business and in a manner consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; practice and (iiib) shall use its commercially reasonable best efforts to preserve substantially intact its and its subsidiaries’ business organization, properties and assets, to keep available the services of their its and its subsidiaries’ present officers, employees and consultants and maintain in effect all Company Material Contractsto preserve its and its subsidiaries’ present relationships with customers, suppliers and other Persons with which it or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, as set forth in Schedule 5.01 or as required by law with advance notification to the other, neither Qualmax nor the Company nor any of its Subsidiaries shall shall, during the Interim Periodperiod from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectlyindirectly do, do or publicly propose to do, any of the following without the prior written consent or ratification of Parentthe other:
(ia) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through mergerchange the Qualmax Charter Documents or the Company Charter Documents, liquidation, reorganization, restructuring or otherwiseas applicable;
(iib) issue, sell, transfer, pledge, dispose of or encumber any shares assets of capital stock of any classQualmax or the Company, or any optionsas applicable, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest of the Company or any of its Subsidiaries;
subsidiaries except for (iiii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares sales of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except assets in the ordinary course of business and in a manner consistent with past practicepractice and (ii) dispositions of obsolete or worthless assets;
(vc) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vii) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock stock; or equity interests(ii) except as required by the terms of any security as in effect on the date hereof, amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary to amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, shares of Common Stock or Qualmax Stock, as applicable, or any option, warrant or right, directly or indirectly, to acquire any such securities;
(viid) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant except as provided in an existing obligation of Qualmax or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into , as applicable, and in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Personaccordance with such obligations, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (Ai) increase the compensation compensation, benefits or severance payable or to become payable to its officers directors, officers, employees or employeesconsultants, except for increases in salary or wages of employees in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; practices, (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (Cii) grant any severance or termination pay to, or enter into or amend any employment or severance agreement withagreement, with any current or prospective employee, except for new hire employees in the ordinary course of business, (iii) enter into any contract with any director, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer, employee or consultant except as required by applicable law and agreements in accordance with effect as of the date of this Agreement, (v) grant any option or other equity awards to any director, officer, employee or consultant except pursuant to agreements entered into before in effect as of the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (Eiv) establish, adopt, enter into or amend in any material respect collective bargaining agreement, benefit plan, including, without limitation, any bonus, profit sharing, thrift, plan that provides for the payment of bonuses or incentive compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its current or former directors, officers officers, employees or employeesconsultants or any of their beneficiaries, except, in each case, as may be required by law or as would not result in a material increase in the cost of maintaining such collective bargaining agreement, benefit plan, trust, fund, policy or arrangement;
(xiie) purchase any capital assets or make any capital expenditures other than those purchased or made in the ordinary course of business and consistent with past practice;
(f) take any action to change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless ) except as required by statutory accounting principles or a change in GAAP or in connection with occurring after the Mergerdate hereof;
(xiiig) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liabilitytake, or agree in writing or otherwise to an extension take, any of a statute of limitations with respect thereto;
the actions described in Sections 5.01(a) through (xivf) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability ofabove, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies action which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) would make any of the representations and or warranties of Qualmax or the Company set forth Company, as the case may be, contained in Article II of this Agreement becoming untrue in any material respect or (B) any of incorrect such that the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect Section 7.02(a) or 7.03(a), as of the Closing Date; or
(xviii) authorizeapplicable, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall would not be required with respect satisfied or prevent Qualmax or the Company, as applicable, from performing or cause Qualmax or the Company, as applicable, not to any currently proposed perform its covenants hereunder such that the condition in Section 7.02(b) or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that7.03(b), during the Interim Periodas applicable, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall would not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingsatisfied.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, except as contemplated by this Agreement, between the date hereof of this Agreement and the earlier to occur of Effective Time, unless the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by this Agreement or unless Parent Buyer shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, each the Business of the Company and its Subsidiaries:
(i) shall conduct its business be conducted only in the ordinary course of businessCompany, consistent with past practice; (ii) and the Company shall not take any action, or fail to take any action, except in the usual, regular and ordinary course of businessbusiness and the Company will generally conduct its business in substantially the same way as heretofore conducted, consistent with past practice; and (iii) without limiting the foregoing, the Company will continue to operate in the same geographic markets serving the same market segments. The Company shall use its reasonable best efforts to preserve substantially intact its the business organizationorganization of the Company, properties and assets, to keep available the present services of their the officers, employees and consultants of the Company and to preserve the current relationships and goodwill of the Company with customers, suppliers and other persons with which the Company has business relationships. Without limiting the generality of the foregoing, the Company shall:
(i) maintain in full force and effect all contracts of insurance and indemnity specified in any Company Disclosure Schedule hereto;
(ii) repair and maintain all of its tangible properties and assets in effect all accordance with its usual and ordinary repair and maintenance standards;
(iii) continue to apply in full the same rigorous credit review process used by the Company Material Contracts. prior to the Closing in determining the extent to which it will extend credit to customers or potential customers in the ordinary course of business;
(iv) notify the Buyer of any material emergency or other material change in the operation of its business or properties and of any governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated).
(b) By way of amplification and not limitationlimitation of clause (a) above, except as expressly permitted by this Agreement, neither the Company nor any shall not between the date of its Subsidiaries shall , during this Agreement and the Interim PeriodEffective Time, directly or indirectlyindirectly do, do or publicly announce an intention to do, any of the following without the prior written consent of Parent:the Buyer through one of its authorized representatives (which representatives shall be each of its Chief Executive Officer, President and Chief Financial Officer):
(i) amend or otherwise change its Certificate of Incorporation, Bylaws Organizational Documents or other By-laws or equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, deliver, sell, transfer, pledge, dispose of, grant, encumber, or authorize the issuance, delivery, sale, pledge, disposition, grant or encumbrance of, any Equity Interests of or encumber any shares of capital stock of any classthe Company, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stocksuch Equity Interests, or any other ownership interest interest, of the Company, or enter into any agreement with respect to any of the foregoing, other than upon exercise of the Company or any of its SubsidiariesStock Options;
(iii) redeem, repurchase make any distribution (by way of dividend or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of otherwise) with respect to its SubsidiariesEquity Interests;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, Equity Interests or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares its Equity Interests;
(v) repurchase, redeem or otherwise acquire any Equity Interests of its capital stock the Company, or equity interestsany securities convertible into or exercisable for any of the Equity Interests of the Company;
(vi) enter into any new line of business or materially expand the business currently conducted by the Company;
(vii) sellacquire or agree to acquire, transferby merging or consolidating with, lease, license, sublicense, mortgage, pledge, dispose or by purchasing an equity interest in or a portion of the assets of, encumberor by any other manner, grant any business or otherwise dispose of any Company Intellectual Propertycorporation, partnership, other business organization or amend any division thereof or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course amount of business consistent with past practiceassets;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money money, increase the aggregate amounts owed under the Company's existing credit facilities or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse endorse, or otherwise as an accommodation become responsible for for, the obligations of any Personindividual, corporation or other entity, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or advance;
(ix) lower or otherwise alter its credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreementcard fraud review process;
(x) authorize any capital expenditures in excess of more than $175,000 10,000 in the aggregateaggregate (other than expenditures listed in Section 6.01(b)(x) of the Company Disclosure Schedule and previously approved by the Buyer);
(xi) take or permit to be taken any action to: (A) increase (x) adopt, amend, renew or terminate any plan or any agreement, arrangement, or policy between the compensation payable to Company and one or more of its current or former directors, officers or employees, except for increases or (y) increase in salary any manner the compensation or wages fringe benefits of any director, officer or employee or pay any benefit not required by any plan or agreement as in accordance with agreements entered into prior to effect as of the date hereof (including, without limitation, the granting of this Agreement stock options, stock appreciation rights, restricted stock, restricted stock units or otherwise in the ordinary course of business consistent with past practiceperformance units or shares); or (B) grant enter into, modify or renew any additional employment, severance or termination pay toother agreement with any director, officer or employee of the Company, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance severance, retention or other plan, agreement, trust, fund, policy or arrangement providing for the any benefit of to any of its directorsdirector, officers officer or employeesemployee;
(xii) change pay any accounting policies bonus or procedures (includingany compensation other than base compensation, without limitation, procedures with respect to reserves, revenue recognition, except for payments of accounts payable bonuses and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection other incentive compensation to sales personnel pursuant to and consistent with the Mergerwritten sales incentive plan which has been provided to and approved by the Buyer;
(xiii) take any action with respect to accounting methods, principles or practices, other than changes required by applicable law or GAAP or regulatory accounting as concurred in by the Company's independent accountants;
(xiv) make any Tax election or settle or compromise any material federal, state, local or foreign Tax tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xivxv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, dischargedischarge or satisfy any claim, satisfy liability or settle any material litigation or waive, assign or release any rights or claims with respect theretoobligation, other than settlements the payment, discharge or satisfaction, in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made consistent with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policiespast practice;
(xvi) take any action that (without regard to any action takensell, lease, encumber, assign or otherwise dispose of, or agreed agree to be takensell, by Parent lease, encumber, assign or otherwise dispose of, any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Codematerial assets, properties or other rights or agreements;
(xvii) take any action that is intended or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably can be expected to result in either (A) any of the its representations and warranties of the Company set forth in Article II of this Agreement being or becoming untrue in any material respect respect, or (B) any of the conditions to the Closing consummation of the Merger and the other transactions contemplated by this Agreement set forth in Article VI of this Agreement IX not being satisfied in any material respect as respect, or in any material violation of the Closing Date; orany provision of this Agreement;
(xviii) authorize, recommend, propose, announce or enter into or renew, amend or terminate, or give notice of a proposed renewal, amendment or termination of or make any agreementcommitment with respect to, (A) any contract, commitment agreement or arrangement lease for office space or operations space to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless which the Company shall otherwise consent in writingis a party or by which the Company or its properties is bound; (B) any lease, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only contract or agreement other than in the ordinary course of business, business consistent with past practicepractice including renewals of leases to existing tenants of the Company ; (iiC) shall not take any action, or fail to take any action, except in the ordinary course regardless of business, whether consistent with past practice; and (iii) shall use its reasonable best efforts practices, any lease, contract, agreement or commitment involving an aggregate payment by or to preserve intact its business organization, properties and assets, and keep available the services Company of their officers, employees and consultants. By way more than $10,000 or requiring performance by the Company of amplification and not limitation, except as expressly permitted by this Agreement, any obligations at any time more than one year after the Parent shall not, during the Interim Period, directly or indirectly, do any time of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseexecution;
(iixix) issueenter into an agreement, sell, transfer, pledge, dispose of or encumber any shares of capital stock of any classcontract, or any optionscommitment that, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements if entered into prior to the date hereof, would be required to be listed on a Schedule delivered to the Buyer pursuant to the terms of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement withincluding without limitation, any employee except in accordance arrangement or contract with agreements entered into before the date of this Agreementrespect to web site development or operations; (D) enter into any collective bargaining agreementmarketing, promotion, affiliate and advertising, including search engine referrals and Internet private labeling; fulfillment operations; or telephone, credit card or freight carrier services;
(Exx) establishamend, adopt, enter into terminate or amend change in any material respect any bonuslease, profit sharingcontract, thriftundertaking, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance arrangement or other plancommitment listed in any Section of the Company Disclosure Schedule (including without limitation its arrangements and contracts with respect to web site development and operations; marketing, trustpromotion, fundaffiliate and advertising, policy including search engine referrals and Internet private labeling; fulfillment operations; and telephone, credit card or arrangement for the benefit freight carrier services) or knowingly do any act or omit to do any act, or permit an act or omission to act, that will cause a breach of any of its directorssuch lease, officers contract, undertaking, arrangement or employeesother commitment;
(xixxi) change any accounting its pricing policies or procedures (including, without limitation, procedures its policies with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAPfreight rates charged to customers;
(xiixxii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease transaction with respect to real propertya Company Insider; or
(xixxxiii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement agree to do any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, except as contemplated by this Agreement, between the date hereof of this Agreement and the earlier to occur of Effective Time, unless the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by this Agreement or unless Parent Buyer shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, each the Business of the Company and its Subsidiaries:
(i) shall conduct its business be conducted only in the ordinary course of businessCompany, consistent with past practice; (ii) and the Company shall not take any actionaction except in, or fail to take any actionthe usual, except in the regular and ordinary course of businessbusiness and the Company will generally conduct its business in substantially the same way as heretofore conducted, consistent with past practice; and (iii) without limiting the foregoing, the Company will continue to operate in the same geographic markets serving the same market segments. The Company shall use its reasonable best efforts to preserve substantially intact its the business organizationorganization of the Company, properties and assets, to keep available the present services of their the officers, employees and consultants of the Company and to preserve the current relationships and goodwill of the Company with customers, suppliers and other persons with which the Company has business relationships. Without limiting the generality of the foregoing, the Company shall:
(i) maintain in full force and effect all contracts of insurance and indemnity specified in any Schedule hereto;
(ii) repair and maintain all of its tangible properties and assets in effect all accordance with its usual and ordinary repair and maintenance standards;
(iii) continue to apply in full the same rigorous credit review process used by the Company Material Contracts. prior to the Closing in determining the extent to which it will extend credit to customers or potential customers in the ordinary course of business;
(iv) notify the Buyer of any material emergency or other material change in the operation of its business or properties and of any governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated).
(b) By way of amplification and not limitationlimitation of clause (a) above, except as expressly permitted by this Agreement, neither the Company nor any shall not between the date of its Subsidiaries shall , during this Agreement and the Interim PeriodEffective Time, directly or indirectlyindirectly do, do or publicly announce an intention to do, any of the following without the prior written consent of Parent:Buyer through one of its authorized representatives (which representatives shall be each of its Chief Executive Officer, President and Chief Financial Officer):
(i) amend or otherwise change its Certificate of Incorporation, Bylaws Organizational Documents or other By-laws or equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, deliver, sell, transfer, pledge, dispose of, grant, encumber, or authorize the issuance, delivery, sale, pledge, disposition, grant or encumbrance of, any Equity Interests of or encumber any shares of capital stock of any classthe Company, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stocksuch Equity Interests, or any other ownership interest interest, of the Company, or enter into any agreement with respect to any of the foregoing, other than in connection with the Stock Warrant Agreement and upon exercise of the Company or any of its SubsidiariesStock Options;
(iii) redeem, repurchase make any distribution (by way of dividend or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of otherwise) with respect to its SubsidiariesEquity Interests;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, Equity Interests or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares its Equity Interests;
(v) repurchase, redeem or otherwise acquire any Equity Interests of its capital stock the Company, or equity interestsany securities convertible into or exercisable for any of the Equity Interests of the Company;
(vi) enter into any new line of business or materially expand the business currently conducted by the Company;
(vii) sellacquire or agree to acquire, transferby merging or consolidating with, lease, license, sublicense, mortgage, pledge, dispose or by purchasing an equity interest in or a portion of the assets of, encumberor by any other manner, grant any business or otherwise dispose of any Company Intellectual Propertycorporation, partnership, other business organization or amend any division thereof or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course amount of business consistent with past practiceassets;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money money, increase the aggregate amounts owed under the Company's existing credit facilities or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse endorse, or otherwise as an accommodation become responsible for for, the obligations of any Personindividual, corporation or other entity, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or advance;
(ix) lower or otherwise alter its credit agreement to which the Company or any of its Subsidiaries is a party card fraud review process (as of the date of this Agreementmore fully described in Exhibit 6.01);
(x) authorize any capital expenditures in excess of more than $175,000 25,000 in the aggregateaggregate approved by Xxxxx);
(xi) take or permit to be taken any action to: (A) increase (x) adopt, amend, renew or terminate any plan or any agreement, arrangement, plan or policy between the compensation payable to Company and one or more of its current or former directors, officers or employees, except for increases or (y) increase in salary any manner the compensation or wages fringe benefits of any director, officer or employee or pay any benefit not required by any plan or agreement as in accordance with agreements entered into prior to effect as of the date hereof (including, without limitation, the granting of this Agreement stock options, stock appreciation rights, restricted stock, restricted stock units or otherwise in the ordinary course of business consistent with past practiceperformance units or shares); or (B) grant enter into, modify or renew any additional employment, severance or termination pay toother agreement with any director, officer or employee of the Company, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance severance, retention or other plan, agreement, trust, fund, policy or arrangement providing for the any benefit of to any of its directorsdirector, officers officer or employeesemployee;
(xii) change pay any accounting policies bonus or procedures (includingany compensation other than base compensation, without limitation, procedures with respect to reserves, revenue recognition, except for payments of accounts payable bonuses and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection other incentive compensation to sales personnel pursuant to and consistent with the Mergerwritten sales incentive plan which has been provided to and approved by Buyer;
(xiii) take any action with respect to accounting methods, principles or practices, other than changes required by applicable law or GAAP or regulatory accounting as concurred in by the Company's independent accountants;
(xiv) make any Tax tax election or settle or compromise any material federal, state, local or foreign Tax tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xivxv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, dischargedischarge or satisfy any claim, satisfy liability or settle any material litigation or waive, assign or release any rights or claims with respect theretoobligation, other than settlements the payment, discharge or satisfaction, in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made consistent with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policiespast practice;
(xvi) take any action that (without regard to any action takensell, lease, encumber, assign or otherwise dispose of, or agreed agree to be takensell, by Parent lease, encumber, assign or otherwise dispose of, any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Codematerial assets, properties or other rights or agreements;
(xvii) take any action that is intended or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably can be expected to result in either (A) any of the its representations and warranties of the Company set forth in Article II of this Agreement being or becoming untrue in any material respect respect, or (B) any of the conditions to the Closing consummation of the Merger and the other transactions contemplated by this Agreement set forth in Article VI of this Agreement IX not being satisfied in any material respect as respect, or in any material violation of the Closing Date; orany provision of this Agreement;
(xviii) authorize, recommend, propose, announce or enter into or renew, amend or terminate, or give notice of a proposed renewal, amendment or termination of or make any agreementcommitment with respect to, (A) any contract, commitment agreement or arrangement lease for office space or operations space to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless which the Company shall otherwise consent in writingis a party or by which the Company or its properties is bound; (B) any lease, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only contract or agreement other than in the ordinary course of business, business consistent with past practicepractice including renewals of leases to existing tenants of the Company ; (iiC) shall not take any action, or fail to take any action, except in the ordinary course regardless of business, whether consistent with past practice; and (iii) shall use its reasonable best efforts practices, any lease, contract, agreement or commitment involving an aggregate payment by or to preserve intact its business organization, properties and assets, and keep available the services Company of their officers, employees and consultants. By way more than $10,000 or requiring performance by the Company of amplification and not limitation, except as expressly permitted by this Agreement, any obligations at any time more than one year after the Parent shall not, during the Interim Period, directly or indirectly, do any time of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseexecution;
(iixix) issueenter into an agreement, sell, transfer, pledge, dispose of or encumber any shares of capital stock of any classcontract, or any optionscommitment that, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements if entered into prior to the date hereof, would be required to be listed on a Schedule delivered to Buyer pursuant to the terms of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement withincluding without limitation, any employee except in accordance arrangement or contract with agreements entered into before the date of this Agreementrespect to web site development or operations; (D) enter into any collective bargaining agreementmarketing, promotion, affiliate and advertising, including search engine referrals and Internet private labeling; fulfillment operations; or telephone, credit card or freight carrier services;
(Exx) establishamend, adopt, enter into terminate or amend change in any material respect any bonuslease, profit sharingcontract, thriftundertaking, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance arrangement or other plancommitment listed in any Schedule (including without limitation its arrangements and contracts with respect to web site development and operations; marketing, trustpromotion, fundaffiliate and advertising, policy including search engine referrals and Internet private labeling; fulfillment operations; and telephone, credit card or arrangement for the benefit freight carrier services) or knowingly do any act or omit to do any act, or permit an act or omission to act, that will cause a breach of any of its directorssuch lease, officers contract, undertaking, arrangement or employeesother commitment;
(xixxi) change any accounting its pricing policies or procedures (including, without limitation, procedures its policies with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAPfreight rates charged to customers;
(xiixxii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment transaction with an Insider; or arrangement (xxiii) agree to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement
Conduct of Business Pending the Merger. 4.1 SECTION 5.01 Conduct of Business of by the Company and Parent Pending the Merger.
(a) The Company covenants . Each of the Company, Parent and agrees Merger Sub covenant and agree that, between the date hereof and until the earlier to occur of the Effective Time or such earlier and the time as that this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")its terms, except as expressly required contemplated by this Agreement Agreement, as set forth in Section 5.01 of Company Disclosure Schedule and Section 5.01 of Parent Disclosure Schedule or unless Parent shall otherwise consented to in writing by the parties hereto (such consent in writing, which consent shall not to be unreasonably withheld), each the businesses of the Company and its Subsidiaries:
(i) shall conduct its business Parent and their respective Subsidiaries shall, in all material respects, be conducted only in in, and the ordinary course of business, consistent with past practice; (ii) Company and Parent and their respective Subsidiaries shall not take any action, or fail to take any action, material action except in the ordinary course of business, business of the normal day to day operations and in a manner consistent with past practice; . The Company and (iii) Parent shall promptly notify each other in writing of any circumstance or development that is or could, individually or in the aggregate, reasonably be expected to constitute a Company Material Adverse Effect or a Parent Material Adverse Effect, as applicable, and the Company and Parent shall cause each of their Subsidiaries, to use its reasonable best efforts to preserve intact its business organization, properties organization and assetsassets and properties, keep available the services of their its and its Subsidiaries’ current officers, employees and consultants consultants, and maintain to preserve its and its Subsidiaries’ present relationships with customers, suppliers and other persons with which it or any of its Subsidiaries has business relations, in effect all Company Material Contractseach instance in the ordinary course of business and in a manner consistent with past practice. By way of amplification and not limitation, except as expressly permitted contemplated by any other provision of this Agreement, neither the Company nor Parent nor any of its their respective Subsidiaries shall shall, during between the Interim Perioddate of this Agreement and the Effective Time, directly or indirectly, indirectly do or propose to do any of the following without the prior written consent of Parentthe other, which consent shall not be unreasonably withheld or delayed:
(ia) amend or otherwise change its Certificate Articles of Incorporation, Bylaws or other equivalent similar organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(iib) issue, sell, transferpledge, dispose of, grant, encumber, or otherwise subject to any Lien, or authorize such issuance, sale, pledge, dispose disposition, grant or encumbrance of or encumber subjection to such Lien, (i) any shares of any class of capital stock of the Company or Parent or any classSubsidiary of either of them, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including any phantom interest), of either of them or of any Subsidiary; or (ii), any assets, tangible or intangible, of the Company or the Parent or any of its Subsidiaries, except for the exercise of options, covenants or other similar rights outstanding as of the date of this Agreement and in accordance with the terms of such options, warrants or other similar rights in effect on the date of this Agreement;
(iiic) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
(d) reclassify, consolidate, exchange, combine, split, subdivide or redeem, repurchase or purchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary issue or authorize the issuance of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares any of its capital stock or equity interestssecurities;
(viie) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiii) acquire (including by merger, amalgamation, consolidation, or acquisition of stock or assets or otherwiseany other business combination) any corporation, limited liability company, partnership, joint venture or other business organization (or any division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse any property or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitmentsasset, except assets (including assets or accounts from suppliers, vendors or dealers) in the ordinary course of business and as otherwise permitted under in a manner consistent with past practice; (ii) authorize, or make any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize commitment with respect to, any capital expenditure, other than maintenance expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business and consistent with past practice; (Biii) enter into any new line of business; or (iv) make investments in persons other than existing Subsidiaries;
(f) (i) increase the compensation payable or to become payable or the benefits provided to its current or former directors, officers or employees, (ii) grant any additional retention, severance or termination pay (other than pursuant to the severance policy as in effect on the date hereof) to, or enter into any employment or severance agreements withemployment, its officers; (C) grant any severance or termination pay tobonus, or enter into any employment change of control or severance agreement with, any current or former director, officer or other employee except in accordance with agreements entered into before the date of this Agreement it or otherwise in the ordinary course of business consistent with past practiceany Subsidiary; (D) enter into any collective bargaining agreement; or (Eiii) establish, adopt, enter into into, terminate or amend or take any action to accelerate (other than in the case of Parent, the acceleration of all outstanding options of Parent as disclosed at Section 5.01(f) of Parent Disclosure Schedule) any material respect rights or benefits of any collective bargaining, bonus, profit sharing, thrifttrust, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directorsdirector, officers officer or employeesemployee except as required by Law; (iv) loan or advance any money or other property to any current or former director, officer or employee; or (v) enter into any new employment arrangements with any senior or executive officer;
(xig) make any material change (or file for such change) in any method of financial or Tax accounting, policies, principles, methods, or practices (including adopting any new accounting policies policies, principles, methods, or procedures practices) except insofar as may be required by a change in GAAP (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable the Company and collection of accounts receivable), unless required by statutory accounting principles its Subsidiaries) or GAAPCanadian GAAP (with respect to Parent and its Subsidiaries) or applicable Law;
(xiih) createmake, incurchange or rescind any material Tax election, suffer file any amended Tax Return, except as described in Section 3.13(a) and as required by applicable Law, enter into any closing agreement relating to exist Taxes, waive or assume any Lien on any extend the statute of its properties, facilities or limitations in respect of Taxes (other assets;
(xiiithan pursuant to extensions of time to file Tax Returns obtained in the ordinary course of business) make any Tax election or settle or compromise any material Canada or United States federal, stateprovincial, state or local or foreign income Tax liability, audit, claim or agree assessment, or surrender any right to an extension of claim for a statute of limitations with respect theretoTax Refund;
(xivi) pay, dischargesettle, discharge or satisfy any material claims, liabilities, litigation, lawsuits, arbitration, proceedings or settle any litigation obligations (absolute, accrued, asserted or waiveunasserted, assign contingent or release any rights otherwise), other than the payment, discharge or claims satisfaction in the ordinary course of business and substantially consistent with respect theretopast practice of liabilities reflected or reserved against in the financial statements of Parent or the Company, as appropriate, or incurred after the date hereof in the ordinary course of business and in a manner consistent with past practice;
(xvj) fail to maintain in full force and effect all its existing insurance policies currently in effectcovering its respective properties, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force assets and effect and provide coverage substantially similar to or greater than under the prior insurance policiesbusinesses;
(xvik) take enter into, amend, modify, terminate or consent to the termination of any action Contract that would be material to its business;
(without regard to l) repurchase, extend, renew, repay or incur any action takenIndebtedness (other than in connection with letters of credit in the ordinary course of business) or issue any debt securities or assume, guarantee or endorse, or agreed to be takenotherwise become responsible for, by Company the obligations of any person, or make any loans or advances, or grant any security interest in any of its assets, except for repayments of Indebtedness, in the ordinary course of business and consistent with past practice; or
(m) adopt a plan of liquidation or resolution providing for the liquidation or dissolution of the Company, Parent or any of its affiliatestheir respective Subsidiaries, as applicable;
(n) could be considered reasonably likely to prevent the Merger from qualifying except as a reorganization within the meaning of listed in Section 368(a5.01(n) of the CodeParent Disclosure Schedule, sell, pledge, lease, exclusively license, transfer, dispose of or encumber any assets;
(xviio) take waive, release, grant or transfer any action claims or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result rights of material value;
(p) except as listed in either (ASection 5.01(p) any of the representations Company Disclosure Schedule and warranties Section 5.01(p) of the Parent Disclosure Schedule, expend or commit to expend any amounts in excess of $100,000 without the prior written approval of the Parent or the Company, as applicable;
(q) enter into or modify any Material Contract or series of Contracts resulting in a new Material Contract or series of related new Material Contracts or modifications to an existing Material Contract or series of related existing Material Contracts outside of the ordinary course, that would alone or in the aggregate, be reasonably expected to have a Company Material Adverse Effect or Parent Material Adverse Effect;
(r) agree, in writing or otherwise, to take any of its Subsidiaries set forth the foregoing actions or any action which would make any representation or warranty contained in Article Articles III of this Agreement becoming or IV hereof, as appropriate, untrue or incorrect in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real propertyrespect; or
(xixs) authorizeissue any press release or otherwise make public statements with respect to this Agreement, recommend, propose, announce the Arrangement or enter into any agreement, contract, commitment or arrangement to do any Transaction contemplated by this Agreement without the consent of the foregoingother party (which consent shall not be unreasonably withheld or delayed) and Parent shall not make any filing with any Governmental Authority with respect thereto without prior consultation with the Company and the Company shall not make any filing with any Governmental Authority with respect thereto without prior consultation with Parent; provided, however, that the foregoing shall be subject to each party’s overriding obligation to make any disclosure or filing required under applicable Laws, and in accordance therewith, and the party making such disclosure shall use all commercially reasonable efforts to give prior oral or written notice to the other party and reasonable opportunity to review or comment on the disclosure or filing and the party making such disclosure shall give reasonable consideration to any comments made by the other party or its counsel, and if such prior notice is not possible, to give such notice immediately following the making of such disclosure or filing.
Appears in 1 contract
Conduct of Business Pending the Merger. SECTION 4.1 Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between during the period from the date hereof of this Agreement and continuing until the earlier to occur of the Effective Time or such earlier time as termination of this Agreement is terminated or the Effective Time, unless Parent shall otherwise agree in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), writing and except as expressly required otherwise contemplated by this Agreement or unless Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries:
(i) Disclosure Schedule, the Company shall conduct its business only and shall cause the businesses of its subsidiaries to be conducted in all material respects in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any actionand, except as set forth in the ordinary course of businessCompany Disclosure Schedule, consistent with past practice; and (iii) the Company shall use its all reasonable best commercial efforts to preserve substantially intact the business organization of the Company and its business organizationsubsidiaries taken as a whole, properties and assets, to keep available the services of their the present key officers, employees and consultants of the Company and maintain in effect all its subsidiaries taken as a whole and to preserve the present relationships of the Company Material Contractsand its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, neither the Company nor any of its Subsidiaries shall subsidiaries shall, during the Interim Periodperiod from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectlyindirectly do, do or propose to do, any of the following without the prior written consent of Parent:
(ia) amend its or otherwise change the Certificate of IncorporationIncorporation or By-Laws of the Company or any of its subsidiaries, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseexcept for the currently proposed amendment to increase the authorized Company Common Stock to 50,000,000 shares;
(iib) except as set forth in Section 4.1(b) of the Company Disclosure Schedule, issue, sell, transfer, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or 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 of (including, without limitation, any phantom interest) in the Company or any of its Subsidiaries;subsidiaries.
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(ivc) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment assets of the Company or other assets, any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, and (iii) sales of other assets not in excess of $250,000 in the aggregate);
(vd) except as set forth in Section 4.1(d) of the Company Disclosure Schedule, (i) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests (stock, except that a wholly owned Subsidiary subsidiary of the Company may declare and pay a cash dividend to the Company);
its parent, (viii) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock stock, or equity interests(iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary to purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, shares of Company Common Stock or any option, warrant or right, directly or indirectly, to acquire shares of Company Common Stock, including the Stock Options, or enter into any agreement to do any of the foregoing;
(viie) sellexcept as set forth in Section 4.1(e) of the Company Disclosure Schedule, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiii) acquire (by merger, consolidation, or acquisition of stock or assets assets) any business or otherwise) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practicedivision; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for for, the obligations of any Personperson or, or except in each case in the ordinary course of business consistent with past practice, make any loans, advances loans or advances; (iii) enter into or amend any financial commitments;
contract or agreement other than in the ordinary course of business; (ixiv) authorize any capital expendituresexpenditures or purchase of fixed assets which are, in the aggregate, in excess of $500,000 for the Company and its subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(e);
(xf) take or permit to be taken any action to: except as set forth in Section 4.1(f) of the Company Disclosure Schedule, (Ai) increase the compensation payable or to become payable to its officers executive officers, directors or employees, employees except for increases in salary or wages in accordance the ordinary course of business consistent with agreements entered into prior to the date of this Agreementpast practice; (Bii) grant any additional severance or termination pay to, or enter into any new employment or severance agreements with, any director, executive officer or current employee of the Company or its officerssubsidiaries; (Ciii) grant any severance or termination pay to, or enter into any employment or severance agreement with, with any employee new employees of the Company or its subsidiaries except in accordance the ordinary course of business consistent with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreementpast practice; or (Eiv) establish, adopt, enter into or amend in any material respect any bonuscollective bargaining, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, compensation or severance or other plan, trust, fund, fund or policy or arrangement for the benefit of any of its current or former directors, officers or employeesemployees of the Company or any of its subsidiaries, except, in each case, as may be required by law;
(xig) except as required under generally accepted accounting principles, take any action to change in any material respect the accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable) of the Company or any subsidiary (except in the case of subsidiaries to conform to the Company's policies and procedures), unless required by statutory accounting principles or GAAP;
(xiih) createexcept as set forth in Section 4.1(h) of the Company Disclosure Schedule, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability, tax liability or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapselimitations, in each case without simultaneously securing replacement insurance policies which will would be in full force material to the Company and effect and provide coverage substantially similar to or greater than under the prior insurance policiesits subsidiaries taken as a whole;
(xvii) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying except as a reorganization within the meaning of set forth in Section 368(a4.1(i) of the Code;
Company Disclosure Schedule, pay, discharge or satisfy any claims, liabilities or obligations (xviiabsolute, accrued, asserted or unasserted, contingent or otherwise) take any action material to the Company and its subsidiaries taken as a whole, other than the payment, discharge or fail satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements contained in the Company SEC Reports filed prior to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III date of this Agreement becoming untrue or incurred in any material respect or (B) any the ordinary course of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease business and consistent with respect to real propertypast practice; or
(xixj) authorizetake, recommendor agree in writing or otherwise to take, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingactions described in Sections 4.1 (a) through (i) above.
Appears in 1 contract
Samples: Merger Agreement (Registry Inc)
Conduct of Business Pending the Merger. 4.1 Conduct of Business Except (i) as expressly contemplated by this Agreement, (ii) as described in Section 5.1 of the Company Pending Disclosure Schedule or (iii) to the Merger.
(a) The Company covenants and agrees that, between the date hereof extent Acquired Corporation and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by this Agreement or unless Parent Company shall otherwise consent in writing, which consent Acquired Corporation and the Company covenant and agree that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Date, Acquired Corporation and the Company shall not be unreasonably withheldconduct their businesses and that of their Subsidiaries, each of group taken as a whole, only in, and neither Acquired Corporation nor the Company shall take any action except in, and neither shall cause its Subsidiaries:
(i) shall conduct its business only in Subsidiaries to take any action except in, the ordinary course of business, business and in a manner consistent with past practice; (ii) shall not take any action, or fail to take any action, except practice and in the ordinary course of business, consistent compliance in all material respects with past practiceall applicable laws and regulations; and (iii) Acquired Corporation and the Company shall use its all reasonable best efforts to preserve substantially intact the respective business organization thereof and of its business organizationSubsidiaries, properties and assetseach group taken as a whole, to keep available the services of their the current officers, employees and consultants thereof, and maintain to preserve the present relationships thereof with customers, suppliers, distributors and other persons with which they or any of their Subsidiaries has significant business relations. Acquired Corporation and the Company agree that the individuals identified in effect all Section 5.1(a) of the Disclosure Schedule shall be authorized to provide the agreement of each to the various acts of Acquired Corporation and the Company Material Contractscontemplated by this Section 5.1 during the period from the date of this Agreement until the earlier of the termination of this Agreement or the Effective Date. By way of amplification and not limitationIn addition, except (i) as expressly permitted contemplated by this Agreement, neither (ii) as described in Section 5.1 of the Disclosure Schedule or (iii) to the extent Acquired Corporation and the Company shall otherwise consent in writing, neither Acquired Corporation nor any of its the Company shall, nor shall they permit their respective Subsidiaries shall to, during the Interim Period, directly period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or indirectlythe Effective Date, do any of the following without the prior written consent of Parentfollowing:
(ia) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter change their respective corporate structure through merger, liquidation, reorganization, restructuring charters or otherwisebylaws or those of their respective Subsidiaries;
(iib) issue, sell, transferpledge, pledgeredeem, accelerate rights under, dispose of or encumber encumber, or authorize the issuance, sale, pledge, redemption, acceleration of rights under, disposition or 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 of (including any phantom interest) in Acquired Corporation or the Company or Company, any of its Subsidiariestheir Subsidiaries or affiliates;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(ivc) sell, transfer, pledge, dispose of or encumber any material propertiesassets of Acquired Corporation, facilities, equipment the Company or any of their Subsidiaries or suffer to exist any Lien thereupon (other assets, except than (i) sales of assets not to exceed $150,000 in the aggregate or non-exclusive licenses in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets; (iii) sales of immaterial assets not in excess of $75,000 in the aggregate) or sales of inventory in the ordinary course of business;
(vi) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests (stock, except that a direct or indirect wholly owned Subsidiary of Acquired Corporation or the Company may declare and pay a cash dividend to the Company);
its parent, (viii) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock stock, or equity interests(iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any Subsidiary to purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its Subsidiaries, or any option, warrant or right, directly or indirectly, to acquire any such securities, or propose to do any of the foregoing;
(viie) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiii) acquire (by merger, consolidation, consolidation or acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for for, the obligations of any Personperson, or make any loans, loans or advances or capital contributions to or investments in any other person, except in the ordinary course of business and consistent with past practice; (iii) enter into, amend or waive any right under any material contract, agreement or joint venture other than in the ordinary course of business consistent with past practice, or any contract or agreement not entered into in the ordinary course of business consistent with past practices, or enter into, renew, fail to renew, amend or terminate any financial commitments;
lease relating to real property, or open or close any facility comprising more than 5,000 square feet; (ixiv) adopt or implement any new stockholder rights plan; (v) authorize any capital expendituresexpenditures or purchase of fixed assets which are in excess of $25,000 in the aggregate for all such expenditures and purchases for Acquired Corporation or the Company and its respective Subsidiaries taken as a whole; (vi) modify its standard warranty terms for its products or amend or modify any product warranties in effect as of the date of this Agreement in any manner that is adverse to the Company or any Subsidiary, other than extensions of warranties in the ordinary course of business; (vii) mortgage or pledge any of its assets, tangible or intangible, or create or suffer to exist any Lien thereupon, except in the ordinary course of business consistent with past practice; or (viii) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 5.1(e);
(x) take or permit to be taken any action to: (Af) increase the compensation payable or to become payable to its directors, officers or employeesemployees (other than increases payable to non-officer employees made in the ordinary course of business consistent with past practice), except for increases in salary make any loan, advance or wages in accordance with agreements entered into prior to the date capital contribution (other than loans or advances of this Agreement; (B) grant any additional severance or termination pay toreasonable relocation expenses), or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay (provided that Acquired Corporation or its Subsidiaries may grant such severance or termination pay in an aggregate amount no greater than $250,000) to, or enter into or amend any employment Company Employee Plan or severance Acquired Corporation Employee Plan or other plan, contract, agreement withor arrangement that would be a Company Employee Plan or Acquired Corporation Employee Plan, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance collective bargaining agreement or other plan, agreement, trust, fund, policy or arrangement for the benefit of any of its current or former directors, officers or employeesemployees of Acquired Corporation or the Company or any of their Subsidiaries, pay any discretionary bonuses to any officer of Acquired Corporation or the Company, materially change any actuarial assumption or other assumption used to calculate funding obligations with respect to any pension or retirement plan, or change the manner in which contributions to any such plan are made or the basis on which such contributions are determined, except, in each case, as may be required by law or contractual commitments which are existing as of the date of this Agreement and listed in Section 3.13 of the Disclosure Schedule or 4.12 of the Acquired Corporation Disclosure Schedule;
(xig) take any action to change any accounting policies or procedures (including, without limitation, including procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless change any assumption underlying, or method of calculating, any bad debt contingency or other reserve, except in each case as required by statutory accounting principles or under GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiiih) make any material Tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability, liability or agree to an extension of a statute of limitations with respect theretolimitations, fail to file any Tax Return when due (or, alternatively, fail to file for available extensions) or fail to cause such Tax Returns when filed to be complete and accurate; or fail to pay any material Taxes when due;
(xivi) pay, dischargedischarge or satisfy any claims, satisfy liabilities or settle any litigation obligations (absolute, accrued, asserted or waiveunasserted, assign contingent or release any rights otherwise), other than the payment, discharge or claims satisfaction in the ordinary course of business and consistent with respect theretopast practice of liabilities reflected or reserved against in the Company Balance Sheet or Acquired Corporation Balance Sheet or incurred in the ordinary course of business and consistent with past practice;
(xvj) fail to maintain pay accounts payable and other obligations in full force and effect all insurance policies currently in effect, or permit any the ordinary course of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policiesbusiness;
(xvik) take accelerate the collection of receivables or modify the payment terms of any action that receivables other than in the ordinary course of business consistent with past practices;
(without regard to l) sell, securitize, factor or otherwise transfer any action takenaccounts receivable;
(m) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or agreed to be taken, by other reorganization of the Company or any of its affiliates) could be considered reasonably likely to prevent Subsidiary (other than the Merger from qualifying or as a reorganization within the meaning of Section 368(a) of the Codeexpressly provided in this Agreement);
(xviin) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue revalue in any material respect or (B) any of its assets, including writing down the conditions to the Closing set forth in Article VI value of this Agreement not being satisfied in any material respect inventory or writing off notes or accounts receivable, except as of the Closing Daterequired under GAAP;
(xviiio) waiveas to Company and its Subsidiaries, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contractcontract or commitment of any type referred to in Section 3.6, commitment or arrangement take, or agree in writing or otherwise to do take, any of the foregoingactions described in Sections 5.1(a) through (n) above, or any action which would make any of the representations or warranties of the Company contained in this Agreement untrue or incorrect or prevent any of them from performing or cause any of them not to perform its covenants hereunder, in each case, such that the conditions set forth in Sections 7.2(a) or 7.2(b), as the case may be, would not be satisfied;
(p) as to Acquired Corporation and its Subsidiaries, enter into any agreement, contract or commitment of any type referred to in Section 4.6, or take, or agree in writing or otherwise to take, any of the actions described in Sections 5.1(a) through (n) above, or any action which would make any of the representations or warranties of Acquired Corporation contained in this Agreement untrue or incorrect or prevent either of them from performing or cause either of them not to perform its covenants hereunder, in each case, such that the conditions set forth in Sections 7.3(a) or 7.3(b), as the case may be, would not be satisfied.
Appears in 1 contract
Samples: Merger Agreement (Drugmax Inc)
Conduct of Business Pending the Merger. 4.1 5.1 Conduct of Business of the Company Pending the Merger.. eTrato and the Shareholders covenant and agree that, prior to the Effective Time, unless Quepasa shall otherwise agree in writing or as otherwise expressly contemplated or permitted by this Agreement:
(a) The Company covenants and agrees that, between the date hereof and the earlier to occur businesses of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by this Agreement or unless Parent eTrato shall otherwise consent in writing, which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries:
(i) shall conduct its business only conducted in the ordinary course of businesscourse, consistent on an arm's length basis and in accordance in all material respects with all applicable laws, rules and regulations and past custom and practice; (ii) eTrato shall not take any actionmaintain its facilities in good operating condition, or fail to take any action, except in the ordinary course of business, consistent with past practicewear and tear excepted; and (iii) eTrato shall use its reasonable best efforts to preserve intact its business organization, properties organization and assetsgoodwill, keep available the services of their officers, its officers and employees and consultants as a group and maintain in effect all Company Material Contracts. By way of amplification satisfactory relationships with suppliers, distributors, customers and not limitation, except as expressly permitted by this Agreement, neither the Company nor any of its Subsidiaries others having business relationships with it;
(b) eTrato shall , during the Interim Periodnot, directly or indirectly, do or permit to occur any of the following without the prior written consent of Parent:
following: (i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber (A) any additional shares of capital stock of any classof, or any options, warrants, convertible securities conversion privileges or other rights of any kind to acquire any shares of, any of its capital stock, or any other ownership interest of the Company or (B) any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
business; (vii) amend or propose to amend its Restated Certificate of Incorporation or Bylaws; (iii) split, combine or reclassify any outstanding shares of eTrato Common Stock, or declare, set aside or pay any dividend or of other distribution (whether payable in cash, stock stock, property or otherwise with respect to shares of eTrato Common Stock; (iv) redeem, purchase or acquire or offer to acquire any shares of eTrato Common Stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests eTrato; (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiiv) acquire (by merger, exchange, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division or material assets thereof;
; (ixvi) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees except the borrowing of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except working capital in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (Bvii) make any investments other than short-term United States Treasury obligations or short-term certificates of deposit of a commercial bank or trust company; or (viii) enter into or propose to enter into, or modify or propose to modify, any agreement, arrangement or understanding with respect to any of the matters set forth in this Section 5.1(b);
(c) eTrato shall not, directly or indirectly, enter into or modify any contract, agreement or understanding, written or oral, that involves consideration or performance of eTrato of a value exceeding $50,000 or a term exceeding one year;
(d) Except as required by law, rule or regulation, eTrato shall not (i) enter into or modify any employment, severance or similar agreements or arrangements with, or grant any additional bonuses, salary increases, severance or termination pay to, any officers or enter into directors or consultants; or (ii) take any employment or severance agreements withaction with respect to the grant of any bonuses, its officers; (C) grant any salary increases, severance or termination pay to, or enter into with respect to any employment or severance agreement with, any employee except increase of benefits payable in accordance with agreements entered into before effect on the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; hereof;
(De) enter into any collective bargaining agreement; or (E) establish, adopt, enter into eTrato shall not adopt or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance employment or other employee benefit plan, trust, fund, policy fund or group arrangement for the benefit or welfare of any of its directors, officers employees or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance employment or other employee benefit plan, agreement, trust, fund, policy fund or arrangement arrangements for the benefit or welfare of any of its directors, officers or employees;director; and
(xif) change any accounting policies or procedures eTrato (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xiii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) shall not take any action that (without regard to any action takenwhich would render, or agreed which reasonably may be expected to be takenrender, any representation or warranty made by Company it in this Agreement untrue at, or at any time prior to, the Effective Time; and (ii) shall notify Quepasa of any emergency or other change in the normal course of its affiliatesbusiness or in the operation of its properties and of any governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action emergency, change, complaint, investigation or failure to take action could hearing would reasonably be expected to result be material, alone or in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions aggregate, to the Closing set forth in Article VI business, operations or financial condition of eTrato or to eTrato's, Quepasa's or the Merger Sub's ability to consummate the transactions contemplated by this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingAgreement.
Appears in 1 contract
Samples: Merger Agreement (Quepasa Com Inc)
Conduct of Business Pending the Merger. 4.1 Conduct SECTION 5.1. CONDUCT OF BUSINESS OF THE COMPANY PENDING THE MERGER During the period from the date of Business this Agreement and continuing until the earlier of the Company Pending the Merger.
(a) The Company covenants and agrees that, between the date hereof and the earlier to occur termination of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by this Agreement or unless Parent the Effective Time, the Company agrees as to itself and each of its Subsidiaries (except to the extent that Acquiror shall otherwise consent in writing, which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries:
(i) shall conduct to carry on its business only in the ordinary course of businessin substantially the same manner as previously conducted, consistent with past practice; (ii) shall not take any actionto pay its debts and taxes when due, subject to good faith disputes over such debts or fail to take any actiontaxes, except in the ordinary course of businessin substantially the same manner as previously paid, to pay or perform its other obligations when due in the ordinary course in substantially the same manner as previously paid or performed, to maintain insurance coverages and its books, accounts and records in the usual manner consistent with past practice; practices, to comply in all material respects with all applicable laws, ordinances and regulations of Governmental Entities, to maintain and keep its properties and equipment in good repair, working order and condition (iii) shall except ordinary wear and tear), and, to the extent consistent with such business, use its all reasonable best efforts consistent with past practices and policies to preserve intact its present business organization, properties and assets, keep available the services of their officers, its present officers and key employees and consultants preserve its relationships with customers, suppliers, distributors, and maintain in effect all Company Material Contractsothers having business dealings with it. By way Without limiting the generality of amplification the foregoing and not limitation, except as expressly permitted contemplated by this Agreement, neither or as specifically disclosed in Section 5.1 of the Company nor Disclosure Schedule, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, without the written consent of Acquiror (which will not be unreasonably withheld or delayed), the Company shall not and shall not permit any of its Subsidiaries shall , during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parentto:
(ia) amend adopt or propose any amendment to its Certificate certificate of Incorporation, Bylaws incorporation or other equivalent bylaws or comparable charter or organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwisedocuments except as contemplated by this Agreement;
(iib) (i) issue, pledge or sell, transferor propose or authorize the issuance, pledgepledge or sale of, dispose of or encumber any additional shares of capital stock of any class (other than upon exercise of Company Stock Rights outstanding on the date of this Agreement upon payment of the exercise price thereof or upon any exchange of Exchangeable Shares), or securities convertible into capital stock of any class, or any optionssubscriptions, warrantsrights, warrants or options to acquire any convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest securities in respect of, in lieu of, or in substitution for, shares of Company Stock outstanding on the date hereof, (ii) amend, waive or otherwise modify any of the terms of any option, warrant or stock option plan of the Company or any of its Subsidiaries, including without limitation, the Company Stock Rights and the Company Stock Plans, or authorize cash payments in exchange for any options granted under any of such plans, or (iii) adopt or implement any stockholder rights plan;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(vc) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any class or series of its capital stock or other equity interests (except that a wholly than between any wholly-owned Subsidiary of the Company may declare (or the Canadian Sub) and pay a cash dividend to the CompanyCompany or any other wholly-owned Subsidiary of the Company (or the Canadian Sub);
(vi) split, combine or reclassify purchase or otherwise acquire, directly or indirectly, any shares of its capital stock (other than the Exchangeable Shares pursuant to the exchange rights thereof);
(d) split, combine, subdivide, reclassify or other securities redeem, purchase or equity interestsotherwise acquire, or issue propose to redeem or purchase or otherwise acquire, any other securities in respect of, in lieu of or in substitution for shares of its capital stock stock, or equity interestsany of its other securities (other than the Exchangeable Shares pursuant to the exchange rights thereof);
(viie) sellincrease the compensation or fringe benefits payable or to become payable to its directors, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant officers or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
employees (viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which whether from the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay toSubsidiaries), or enter into pay any employment benefit not required by any existing plan or severance agreements witharrangement (including, its officers; (Cwithout limitation, the granting of stock options, stock appreciation rights, shares of restricted stock or performance units) or grant any severance or termination pay toto (except pursuant to existing agreements or policies previously disclosed in writing to Acquiror, which shall be interpreted and implemented in a manner consistent with past practice), or enter into any employment or severance agreement with, any director, officer or employee except in accordance with agreements entered into before of the date Company or any of this Agreement its Subsidiaries or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into into, or amend in any material respect any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, savings, welfare, deferred compensation, employment, termination, severance or other employee benefit plan, agreement, trust, fund, policy or arrangement for the benefit or welfare of any of its directors, officers or current or former employees;
, including any Benefit Arrangement, Pension Plan or Welfare Plan, except (xiii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless the extent required by statutory accounting principles applicable law or GAAP regulation, (ii) pursuant to any collective bargaining agreements or Company Employee Plan as in connection effect on the date of this Agreement consistent with the Merger;
past practices, (xiiiiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements for salary and benefit increases in the ordinary course of business that involve only consistent with past practice to employees other than executive officers of the payment of non-material amounts of cash and no admission being made with respect Company, (iv) pursuant to (A) any criminal wrongdoing Section 2.8 or (Bv) the invalidity grant of options consistent with past practice to new or unenforceability ofpromoted employees other than executive officers, or any infringement with respect to, any which options represent in the aggregate the right to acquire no more than 500,000 shares (net cancellations) of Company Intellectual Property RightsCommon Stock;
(xvf) fail to maintain in full force and effect all material insurance policies currently in effect(i) sell, pledge, lease, dispose of, grant, encumber, or permit otherwise authorize the sale, pledge, disposition, grant or encumbrance of any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to properties or greater than under assets of the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning Subsidiaries (including stock of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either Subsidiaries), except for (A) any sales of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only assets in the ordinary course of business, (B) sales of assets aggregating less than $5,000,000, (C) sales of accounts receivable under agreements with Fleet Bank and Sanwa Bank in effect as of the date hereof consistent with past practice; , (D) sales of marketable securities aggregating less than $20,000,000, and (E) sales of assets under sale/leaseback arrangements with Fleet Bank in effect as of the date hereof consistent with past practice, or (ii) shall not take acquire (including, without limitation, by merger, consolidation, lease or acquisition of stock or assets) any actioncorporation, partnership, other business organization or fail to take any actiondivision thereof (or a substantial portion of the assets thereof) or any other assets, except for acquisitions of assets in the ordinary course of businessbusiness and except for acquisitions involving an aggregate purchase price not in excess of $10,000,000;
(g) (i) incur, assume or pre-pay any debt for borrowed money, other than pursuant to credit agreements, accounts receivable facilities, factoring arrangements and sale/leaseback arrangements in effect as of the date hereof consistent with past practice; and , (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person (other than wholly-owned subsidiaries), (iii) shall use its reasonable best efforts make any loans, advances or capital contributions to, or investments in, any other person (including advances to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitationemployees), except as expressly permitted by this Agreementfor loans, advances, capital contributions or investments between any wholly-owned Subsidiary of the Parent shall notCompany and the Company or another wholly-owned Subsidiary of the Company or which are reasonable, during necessary, in the Interim Periodordinary course and consistent with past practice, directly or indirectly, do (iv) enter into any "keep well" or other agreement to maintain the financial condition of another entity (other than the Company or any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwisewholly-owned Subsidiaries);
(iih) issueauthorize, sellrecommend, transfer, pledge, dispose propose or announce an intention to adopt a plan of complete or encumber any shares of capital stock of any class, partial liquidation or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest dissolution of the Parent; Company or any of its Subsidiaries, other than pursuant to in connection with the transactions contemplated by this Agreementdissolution, merger or liquidation of inactive Subsidiaries;
(iiii) redeemmake or rescind any material express or deemed election relating to Taxes, repurchase settle or otherwise acquirecompromise any material claim, directly action, suit, litigation, proceeding, arbitration, investigation, audit or indirectlycontroversy relating to Taxes, amend any shares material Tax Return except in the ordinary course of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or propertybusiness consistent with past practice, or except as may be required by applicable law, make any combination thereof) in respect of change to any of its capital stock material methods of reporting income or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures deductions (including, without limitation, procedures with respect any change to reserves, revenue recognition, payments of accounts payable and collection its methods or basis or write-offs of accounts receivable)) for federal income tax purposes from those employed in the preparation of its federal income tax return for the taxable year ending January 3, unless required by statutory accounting principles or GAAP1998;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xivj) pay, dischargedischarge or satisfy any material claims, satisfy liabilities or settle any litigation obligations (absolute, accrued, asserted, unasserted, contingent or waiveotherwise), assign other than the payment, discharge or release any rights satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or claims with respect thereto;
(xv) fail to maintain reserved against in full force and effect all insurance policies currently in effect, or permit any the consolidated financial statements of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policiesCompany;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Learning Co Inc)
Conduct of Business Pending the Merger. 4.1 SECTION 5.01 Conduct of Business of by the Company Pending the Merger.
(a) Merger The Company covenants and agrees that, between the date hereof of this Agreement and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Time, except as expressly required contemplated by any other provision of this Agreement or as set forth in Section 5.01 of the Company Disclosure Schedule, unless Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld, each :
(i) the businesses of the Company and its Subsidiaries:
(i) Subsidiaries shall conduct be conducted only in, and the Company and its business only in Subsidiaries shall not take any action except in, the ordinary course of business, business and in a manner consistent with past practice; and
(ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) Company shall use its all reasonable best efforts to preserve substantially intact its the business organizationorganization of the Company and the Subsidiaries, properties and assets, to keep available the services of their the current officers, employees and consultants of the Company and maintain in effect all the Subsidiaries and to preserve the current relationships of the Company Material Contractsand the Subsidiaries with customers, suppliers and other persons with which the Company or any Subsidiary has significant business relations. By way From the date of amplification this Agreement until the earlier of (i) the Effective Time and not limitation, except as expressly permitted by this (ii) the termination of the Agreement, neither the Company nor any of its Subsidiaries shall , during the Interim PeriodSubsidiary shall, directly or indirectly, do do, or propose to do, any of the following without the prior written consent of ParentParent and except as otherwise expressly contemplated herein:
(ia) amend or otherwise change its Certificate of Incorporation, Bylaws Incorporation or other By-laws or equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(iib) issue, sell, transferpledge, dispose of, grant or encumber, or otherwise subject to any Lien, or authorize such issuance, sale, pledge, dispose of disposition, grant or encumber encumbrance of, or subjection to, any such Lien, (i) any shares of any class of capital stock of the Company or any classSubsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Subsidiary (except for the issuance of its SubsidiariesShares issuable pursuant to employee stock options outstanding on the date of this Agreement and granted under Company Stock Option Plans in effect on the date of this Agreement) or (ii) any assets of the Company or any Subsidiary, except in the ordinary course of business and in a manner consistent with past practice;
(iiic) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for the declaration and payment of dividends by a wholly owned Subsidiary solely to its parent corporation;
(d) reclassify, combine, split, subdivide or redeem, repurchase or purchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiariescapital stock;
(ive) sell(i) acquire (including, transferwithout limitation, pledgeby merger, dispose consolidation, or acquisition of stock or encumber assets or any material propertiesother business combination) any corporation, facilitiespartnership, equipment other business organization or any division thereof or any significant amount of assets; (ii) incur any indebtedness, whether secured or unsecured and whether under a new or existing credit facility (except borrowings from Parent or Purchaser) or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person, or make any loans or advances; (iii) enter into any contract or agreement other assets, except than in the ordinary course of business and consistent with past practice; (iv) authorize, or make any commitment with respect to, any capital expenditure which is not specifically referred to in the capital expenditure budget attached hereto as Section 5.01(e) of the Company Disclosure Schedule (the "Company Capital Budget") or, to the extent not included in the Company Capital Budget, any single capital expenditure in excess of $10,000 or capital expenditures in the aggregate in excess of $100,000; or (v) enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 5.01(e);
(f) (i) hire any additional employees except to fill current vacancies or vacancies arising after the date of this Agreement, (ii) make any offers to any employee of an employment position other than the employment position he or she currently holds, except for offers of an employment position made in the ordinary course of business and consistent with past practice in connection with the promotion or demotion of any employee of the Company or any of its Subsidiaries who is not a director or officer of the Company, (iii) increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases in the ordinary course of business and consistent with past practice in salaries or wages of employees of the Company or any of its Subsidiaries who are not directors or officers of the Company, (iv) grant any new or additional retention, severance or termination pay to, or enter into any new or additional employment, bonus, change of control or severance agreement with, any director, officer or other employee of the Company or of any of its Subsidiaries, (v) establish, adopt, enter into, terminate or amend any Plan or establish, adopt or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement for the benefit of any director, officer or employee except as required by this Agreement or the Transactions contemplated hereby, or as required by ERISA, the Code or to otherwise comply with applicable Law, (vi) loan or advance money or other property to any current or former director, officer or employee of the Company or any of its Subsidiaries, (vii) grant any equity or equity based awards (provided that equity awards may be transferred in accordance with the applicable plan document or agreement) or (viii) hire or engage any consultant to perform services for a rate of compensation which would be in excess of $25,000 on an annual basis or which is not terminable upon notice of 30 days or less;
(g) effectuate a "plant closing" or "mass layoff," as those terms are defined in WARN (determined without regard to terminations of employment occurring on or after the Effective Time);
(h) take any action, other than reasonable and usual actions in the ordinary course of business and consistent 30 with past practice and other than actions required to be taken in response to changes in GAAP or in Law, with respect to accounting policies or procedures;
(i) make, revoke or change any material Tax election or material method of Tax accounting, file any amended Tax Return (unless required by Law), enter into any closing agreement relating to a material amount of Taxes, settle or compromise any material liability with respect to Taxes or consent to any material claim or assessment relating to Taxes or any waiver of the statute of limitations for any such claim or assessment; provided, that in the case of the filing of any amended Tax Return, the Company or the relevant Subsidiary shall deliver a copy of such amended Tax Return to Parent at least 30 days prior to filing for Parent's review and consent;
(j) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than in the ordinary course of business and consistent with past practice, unless such payment, discharge or satisfaction is made in accordance with the terms of such claim, liability or obligation as such terms exist on the date of this Agreement;
(k) pay accounts payable, utilize cash, draw down on lines of credit, delay or accelerate capital expenditures, incur expenditures on research and development, other than in the ordinary course of business and consistent with past practice;
(vl) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect respect, or consent to the termination of, any existing agreements Material Contract, or amend, waive or modify in any material respect, or consent to the termination of, the Company's or any Subsidiary's rights thereunder;
(m) commence or settle any Action, other than the settlement of Actions involving payments by the Company or its Subsidiaries not to exceed $100,000 with respect to any Company individual Action or $250,000 in aggregate settlements;
(n) (i) abandon, sell, assign, or grant any security interest in or to any item of the Owned Intellectual Property, Licensed Intellectual Property or IP Agreements, (ii) grant to any third party any license, sublicense or covenant not to sue with respect to any Owned Intellectual Xxxperty or Licensed Intellectual Property, other than in the ordinary course of business consistent with past practice, (iii) develop, create or invent any Intellectual Property jointly with any third party (other than such joint development, creation or invention with a third party that is in progress as of the date hereof), (iv) disclose, or allow to be disclosed, any confidential Owned Intellectual Property, unless such Owned Intellectual Property is subject to a confidentiality or non-disclosure covenant protecting against disclosure thereof, or (v) fail to perform or cause to be performed all applicable filings, recordings and other acts, and pay or caused to be paid all required fees and taxes, to maintain and protect its interest in each and every item of the Owned Intellectual Property and the Licensed Intellectual Property;
(viiio) acquire (by merger, consolidation, acquisition of stock fail to make in a timely manner any filings with the SEC required under the Securities Act or assets the Exchange Act or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereofthe rules and regulations promulgated thereunder;
(ixp) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course contract or agreement with any director or officer of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent Subsidiary or any of its affiliatestheir respective affiliates (including any immediate family member of such person) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take or any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties other affiliate of the Company set forth in Article II of this Agreement becoming untrue in or any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing DateSubsidiary; or
(xviiiq) authorizeannounce an intention, recommend, propose, announce or enter into any agreement, contract, commitment formal or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, informal agreement or otherwise alter their corporate structure through mergermake a commitment, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 SECTION 6.1. Conduct of Business of the Company Pending the Merger.
(a) . The Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required permitted or contemplated by this Agreement or as set forth in Section 6.1 of the Company Disclosure Letter, until the Effective Time, unless the Parent shall otherwise consent agree in writingwriting prior to the taking of any action otherwise prohibited by the terms of this Section 6.1, which consent shall not be unreasonably withheld, each of the Company shall, and its Subsidiaries:
(i) shall cause REI Barbados to, conduct its operations and business only in the ordinary and usual course of business, and consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; practice and (iii) shall use its reasonable best efforts to preserve intact its business organizationorganizations' goodwill, properties maintain in effect all existing material qualifications, licenses, permits, approvals and assetsother authorizations, substantially comply with all applicable Laws, keep available the services of their officersits present executive officers and key employees, employees and consultants preserve the goodwill and maintain in effect all Company Material Contractsbusiness relationships with suppliers, distributors, customers and others having business relationships with it. By way Without limiting the generality of amplification the foregoing, and not limitation, except as otherwise expressly permitted by this Agreement, neither Agreement or as set forth in Section 6.1 of the Company nor any of its Subsidiaries shall Disclosure Letter, during prior to the Interim PeriodEffective Time, directly or indirectly, do any of the following without the prior written consent of the Parent, the Company will not, and will cause REI Barbados not to:
(ia) except to the extent required by Law or the rules and regulations of The Nasdaq Stock Market, amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring change the articles of incorporation or otherwisebylaws of the Company;
(iib) issueissue or authorize or propose the issuance of, sell, transferpledge or dispose of, pledgegrant or otherwise create, dispose of or encumber agree to issue or authorize or propose the issuance, sale, pledge or disposition of, grant or otherwise create any additional shares of capital stock of any classof, or any options, warrants, convertible securities or other rights of any kind Options to acquire any shares of of, its capital stock, stock or any other ownership interest debt or equity securities convertible into or exchangeable for such capital stock or accelerate any right to convert or exchange or acquire any securities of the Company for any such shares or ownership interest or take any action to cause to be exercisable any otherwise unexercisable option under any Company Stock Option granted under any Company Option Plan, other than (i) the issuance of 1,010,101 shares of Company Common Stock upon the conversion of the Convertible Notes, (ii) any such issuance pursuant to the exercise of Company Stock Options granted prior to the date hereof under the Company Option Plans, in accordance with their respective terms as in effect on the date hereof, (iii) the issuance of shares of Company Common Stock pursuant to the Company ESPP in accordance with its terms as in effect on the date hereof in accordance with Section 3.2(g).
(c) purchase, redeem or otherwise acquire or retire, or offer to purchase, redeem or otherwise acquire or retire, (i) any shares of its Subsidiariescapital stock (including any Options with respect to its capital stock and any security convertible or exchangeable into its capital stock), or (ii) any long-term debt;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(vd) declare, set aside aside, make or pay any dividend or other distribution (whether distribution, payable in cash, stock stock, property or other securities or propertyotherwise, or any combination thereof) in with respect of to any of its capital stock stock, or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) subdivide, reclassify, recapitalize, split, combine or reclassify exchange any of its shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of otherwise change its capital stock or equity interestscapitalization as it exists on the date hereof;
(viie) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant incur or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements become contingently liable with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or the deferred purchase price for property or services or pursuant to any capital lease or other financing or guarantee any such indebtedness or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreementsecurities;
(xf) authorize any capital expenditures in excess of $175,000 in the aggregate;
except as may be required by applicable Laws, or as contemplated by this Agreement, (xi) take or permit to be taken any action to: (Ai) increase the compensation payable or to become payable to, or enter into any employment agreement with, its executive officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise non-executive officers in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (Cii) grant any severance or termination pay to any director, executive officer or employee of the Company or REI Barbados, except pursuant to existing Company Benefit Plans; (iii) enter into any severance agreement with any director, executive officer or employee; or (iv) except as required by applicable Laws, establish, adopt, enter into, terminate, withdraw from or amend in any material respect or take action to accelerate or waive (or otherwise diminish) any rights or benefits under any Company Benefit Plan or any other plan, program or arrangement, or any material employment policy;
(g) take any action, other than reasonable actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including Tax accounting policies, procedures and elections relating to Taxes that would apply to the Company after the Merger), except as may be required by generally accepted accounting principles, or settle any material Audit, make any material Tax election or settle any material Tax liability or, except as required by Law, amend in any material respect any material Tax Return;
(h) acquire or agree to acquire by merging or consolidating with, or by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business entity;
(i) mortgage or otherwise encumber or subject to any Lien, or sell, transfer or otherwise dispose of (by merger or otherwise), any of its properties or assets, other than encumbrances and Liens that are incurred in the ordinary course of business and consistent with past practice and sales, transfers and dispositions of inventory in the ordinary course of business and consistent with past practice;
(j) settle or compromise any material pending or threatened Litigation;
(k) make any advance, loan, extension of credit or capital contribution to, or purchase or acquire (by merger or otherwise) any stock, bonds, notes, debentures or other securities of, or any assets constituting a business unit of, or make any other investment in, any person, firm or entity, except (a) extensions of trade credit and endorsements of negotiable instruments and other negotiable documents in the ordinary course of business, (b) investments in cash and cash equivalents, and (c) payroll and travel advances in the ordinary course of business;
(l) make any capital expenditures in the aggregate for the Company and REI Barbados in excess of the amounts specified in the Company's budget for capital expenditures, a true and complete copy of which has previously been delivered to the Parent;
(m) waive, amend or allow to lapse any term or condition of any confidentiality or "standstill" agreement to which the Company is a party;
(n) enter into (a) any Contracts with distributors or sales agents other than Contracts terminable without penalty on less than 30 days' notice, (b) any Contracts to distribute products for others or which restrict the ability of the Company, REI Barbados or the Company's affiliates to compete or (c) any other Contracts that would constitute Material Contracts; or amend any of the foregoing agreements as they exist on the date hereof;
(o) amend, change or waive (or exempt any person or entity from the effect of) the Rights Agreement, or redeem the Rights, except in connection with the transactions contemplated under this Agreement or the Ancillary Documents;
(p) change any of the accounting principles or practices used by the Company;
(q) effect any material change in the Company's advertising, product promotion or brand support policies or programs or commit to any significant new product promotion or advertising campaign;
(r) effect any material change in the Company's billing practices or sales terms, or cause or permit a material acceleration or delay in the manufacture, shipment or sale of inventory, the collection of accounts or notes receivable or the payment of accounts or notes payable;
(s) enter into any employment Contracts for Derivatives;
(t) waive, relinquish, release or severance agreement withterminate any right or claim, including any employee such right or claim under any Material Contract, except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with the customary past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for practice of the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effectCompany, or permit any rights of the coverage thereunder material value to lapse, in each case without simultaneously securing replacement insurance policies which will use any Intellectual Property to lapse or be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policiesforfeited;
(xviu) take any action to cause the Company Common Stock to be delisted from the NASDAQ National Market prior to the completion of the Offer;
(v) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could would reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions contained in Section 8.2(a) or 8.2(b) not to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Datebe satisfied; or
(xviiiw) authorize, recommend, propose, announce or enter into authorize any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any actionof, or fail commit or agree to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreementof, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingforegoing actions.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 SECTION 5.1 Conduct of Business of the Company Pending the Merger.
(a) . The Company covenants and agrees that, between during the period from the date hereof and the earlier to occur of until the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Time, except as expressly required contemplated by this Agreement, as disclosed in the SEC Reports filed prior to the date of this Agreement or in Section 5.1 of the Disclosure Schedule or as required by law, or unless Parent Purchaser shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, each the business of the Company and its Subsidiaries:
(i) subsidiaries shall conduct be conducted in its business only in the ordinary course of business, business consistent with past practice; (ii) shall not take any action, or fail to take any action, except in practice and the ordinary course of business, consistent with past practice; Company and (iii) its subsidiaries shall use its their reasonable best efforts to comply with all applicable laws, rules and regulations and, to the extent consistent therewith, use their reasonable best efforts to preserve substantially intact its their business organizationorganizations, properties and assetsto preserve their present relationships with customers, keep available suppliers, employees, licensors, licensees, distributors, authors and other content providers and other persons with which they have business relations. Without limiting the services generality of their officersthe foregoing, employees between the date of this Agreement and consultants and maintain in effect all Company Material Contracts. By way of amplification and not limitationthe Effective Time, except as expressly permitted otherwise contemplated by this Agreement, as set forth in Section 5.1 of the Disclosure Schedule or as required by law, neither the Company nor any of its Subsidiaries subsidiaries shall , during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent:Parent (it being understood that Parent will determine whether or not to give such consent based on its reasonable business judgment):
(ia) amend its Certificate or otherwise change the certificate of Incorporation, Bylaws incorporation or other by-laws or equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwisedocuments of the Company and its subsidiaries;
(iib) issue, deliver, sell, transfer, pledge, dispose of or encumber 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 but not limited to stock appreciation rights or phantom stock), of the Company or any of its Subsidiaries;
subsidiaries (iiiexcept (A) redeem, repurchase or otherwise acquire, directly or indirectly, any for the issuance of shares of capital stock Common Stock issuable in accordance with the terms of Employee Options issued and outstanding as of the Company date hereof, (B) for the conversion of shares of Series A Stock or interest in or securities Class B Stock into shares of any Common Stock, (C) for the grant of its Subsidiaries;
Employee Options (ivand issuances of Common Stock pursuant thereto) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent in order to attract new employees or (D) in connection with past practicethe dividend reinvestment plan of the Company existing on the date hereof);
(vc) declare, set aside aside, make or pay any dividend or other distribution (whether distribution, payable in cash, stock stock, property or other securities or propertyotherwise, or any combination thereof) in with respect of to any of its capital stock or other equity interests (except that for (i)any dividend or distribution by a wholly wholly-owned Subsidiary subsidiary of the Company, (ii) regular quarterly dividends of the Company may declare in an amount not to exceed $0.21 per share of Common Stock and pay a cash dividend regular quarterly dividends of the Company in an amount not to exceed $0.189 per share of Class B Stock or (iii) quarterly dividends on the CompanySeries A Stock as provided for in the Restated Certificate);
(vii) splitpurchase, combine redeem or reclassify otherwise acquire any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber any shares of capital stock of any class, subsidiaries or any options, warrants, convertible securities calls or other rights of any kind to acquire any such shares of capital stock, or any other ownership interest of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities (other than in connection with the dividend reinvestment plan of the Company existing on the date hereof in accordance with past practice) or property(ii) reclassify, combine, split or subdivide any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.other
Appears in 1 contract
Samples: Merger Agreement (Reh Mergersub Inc)
Conduct of Business Pending the Merger. 4.1 SECTION 4.01. Conduct of Business of by the Company Pending the Merger.
(a) The . During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by this Agreement or unless Parent shall otherwise consent agree in writingwriting or as required or permitted under this Agreement, which consent the Company shall not conduct its business and shall cause the business of its subsidiaries to be unreasonably withheldconducted only in, each of and the Company and its Subsidiaries:
(i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) subsidiaries shall not take any action, or fail to take any action, action except in the ordinary course of business, business and in a manner consistent with past practice; and (iii) the Company shall use its reasonable best commercial efforts to preserve substantially intact the business organization of the Company and its business organizationsubsidiaries, properties and assets, to keep available the services of their the present officers, employees and consultants of the Company and maintain in effect all its subsidiaries and to preserve the present relationships of the Company Material Contractsand its subsidiaries with customers, suppliers and other persons with which the Company or any subsidiary has significant business relations. By way of amplification and not limitation, except as expressly permitted contemplated by this AgreementAgreement and except as disclosed in Section 4.01 of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries shall subsidiary shall, during the Interim Periodperiod from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectlyindirectly do, do or propose to do, any of the following without the prior written consent of Parent:
(ia) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring change the Company's certificate of incorporation or otherwisebylaws;
(iib) issue, sell, transfer, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of Company capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of Company capital stock, or any other ownership interest (including, without limitation, any phantom interest) of the Company Company, any subsidiary or any of its Subsidiariesaffiliates, except for the issuance of (i) options under the Company Stock Option Plans to purchase up to 2,000,000 shares of Company Common Stock granted to Company employees in the ordinary course of business, which options shall have exercise prices no less than the fair market value at the time of grant and (ii) shares of Company Common Stock issuable to participants in the Company's employee stock purchase plan in the ordinary course of business and upon issuance of outstanding Stock Options granted under the Company Stock Option Plans;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(ivc) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment assets or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary inventory of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
subsidiary (viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only sales of assets or inventory in the ordinary course of business, consistent with past practice; (ii) shall not take any actiondispositions of obsolete or worthless assets, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts pledges of assets pursuant to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documentsexisting agreements, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose agreements the Company is permitted to enter into in connection with the purchase of or encumber any shares of capital stock of any classassets), or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could would reasonably be expected to result in either (A) any damage to, destruction or loss of any material asset of the representations and warranties of the Parent Company (whether or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Datecovered by insurance);
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Agreement and Plan of Reorganization and Merger (E Tek Dynamics Inc)
Conduct of Business Pending the Merger. SECTION 4.1 Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between during the period from the date hereof of this Agreement and continuing until the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by termination of this Agreement or the Effective Time, unless Parent shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries:
(i) shall conduct its business only in in, and the Company shall not take any action except in, the ordinary course of business, business and in a manner consistent with past practice; (ii) shall not take any action, or fail to take any action, except practice other than actions taken by the Company in contemplation of the ordinary course of business, consistent with past practiceMerger; and (iii) the Company shall use its all reasonable best commercial efforts to preserve substantially intact its the business organizationorganization of the Company, properties and assets, to keep available the services of their the present officers, employees and consultants of the Company and maintain in effect all to preserve the present relationships of the Company Material Contractswith customers, suppliers and other persons with which the Company has business relations. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, neither the Company nor any of its Subsidiaries shall not, during the Interim Periodperiod from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectlyindirectly do, do or propose to do, any of the following without the prior written consent of Parent:
(ia) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring change the Articles of Incorporation or otherwiseBy-Laws of the Company;
(iib) issue, sell, transfer, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or 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 (except for the issuance of shares of Company Common Stock issuable pursuant to Stock Options which were granted under either the Company Stock Option Plan and are outstanding on the date hereof or in connection with the Conversion or other conversion of the Preferred Stock into shares of Company or any of its SubsidiariesCommon Stock);
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(ivc) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment assets (tangible or other assets, intangible) of the Company except for (i) dispositions of obsolete or worthless assets and (ii) sales of immaterial assets not in excess of $25,000 in the ordinary course of business consistent with past practiceaggregate;
(vi) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests stock, (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(viii) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock (except for the issuance of shares of Company Common Stock issuable pursuant to Stock Options which were granted under either the Company Stock Option Plan and are outstanding on the date hereof or equity interestsin connection with the Conversion or other conversion of the Preferred Stock into shares of Company Common 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, Preferred 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;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiii) acquire (by merger, consolidation, or acquisition of stock or assets or otherwiseassets) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereof;
; (ixii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for for, the obligations of any Person, or make any loans, advances or enter into any financial commitmentsperson or, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice, make any loans or advances; (Biii) grant enter into or amend any additional severance material contract or termination pay toagreement; (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $50,000 for the Company; or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(e);
(f) other than as contemplated by Schedule 4.1(f), increase the compensation payable or to become payable to its officers or employees, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement withwith any director, any officer or other employee except in accordance with agreements entered into before of the date of this Agreement Company, or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any of its current or former directors, officers or employees, except, in each case, as may be required by law;
(xiig) except as set forth in Sections 2.8(c), (d) and (e) of the Company Disclosure Schedule, take any action to change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiiih) make any Tax material tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability, tax liability or agree to an extension of a statute of limitations with respect theretolimitations;
(xivi) other than with respect to except as required by the Atari litigation set forth in the Company Disclosure Schedulesexpress terms thereof, pay, dischargedischarge or satisfy any claims, satisfy liabilities or settle any material litigation obligations (absolute, accrued, asserted or waiveunasserted, assign contingent or release any rights or claims with respect theretootherwise), other than settlements the payment, discharge or satisfaction in the ordinary course of business that involve only and consistent with past practice of liabilities reflected or reserved against in the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing Financial Statements or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only incurred in the ordinary course of business, business and consistent with past practice; or
(iij) shall not take any actiontake, or fail agree in writing or otherwise to take any actiontake, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
actions described in Sections 4.1 (a) through (i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber any shares of capital stock of any classabove, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) 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 action which would make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and or warranties of the Parent or any of its Subsidiaries set forth Company contained in Article III of this Agreement becoming untrue in any material respect or (B) any of incorrect or prevent the conditions Company from performing or cause the Company not to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingperform its covenants hereunder.
Appears in 1 contract
Samples: Merger Agreement (Registry Inc)
Conduct of Business Pending the Merger. SECTION 10.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. Except as disclosed in Section 4.1 Conduct of Business of the Company Pending Disclosure Schedule, during the Merger.
(a) The period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by this Agreement or unless Parent shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries:
(i) shall conduct its business only in in, and shall not take any action except in, the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except business and in the ordinary course of business, a manner consistent with past practice; and (iii) the Company shall use its reasonable best commercial efforts to preserve substantially intact its the business organizationorganization of the Company, properties and assets, to keep available the services of their the present officers, employees employees, agents and consultants of the Company and maintain in effect all to preserve the present relationships of the Company Material Contractswith customers, suppliers and other Persons with which the Company has significant business relations. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, neither the Company nor any of its Subsidiaries shall not, during the Interim Periodperiod from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectlyindirectly do, do or propose to do, any of the following without the prior written consent of Parent:
(ia) amend its or otherwise change the Company's Certificate of Incorporation, Bylaws Incorporation or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseBylaws;
(iib) issue, sell, transfer, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or 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 of (including, without limitation, any phantom interest) in the Company or any of its SubsidiariesAffiliates, except for the issuance of shares of Company Common Stock issuable upon the exercise of the Stock Options and Warrants and other commitments listed in Section 2.4 of the Company Disclosure Schedule;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(ivc) sell, transfer, pledge, lease to others or otherwise dispose of or encumber subject to any Encumbrance any material propertiesassets or properties of the Company or purchase, facilities, equipment lease from others or other assets, otherwise acquire any material assets or properties (except for (i) purchases or sales of assets in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, and (iii) purchases or sales of immaterial assets not in excess of $20,000);
(vi) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests stock, (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(viii) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock stock, or equity interests(iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any Person to purchase, repurchase, redeem or otherwise acquire, any of its securities, including shares of Company Common Stock or any option, warrant or right, directly or indirectly, to acquire shares of Company Common Stock;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiii) acquire (by merger, consolidation, or acquisition of stock or assets or otherwiseassets) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereof;
; (ixii) incur any indebtedness for borrowed money or issue any debt securities or assumemoney, guarantee (other than guarantees of bank debt of except for borrowings and reborrowing under the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or existing credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money facilities or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for for, the obligations of any Person, or make any loansloans or advances, advances or enter into any financial commitments;
except in the ordinary course of business consistent with past practice; (ixiii) authorize any capital expendituresexpenditures or purchases of fixed assets which are, in the aggregate, in excess of the amount set forth in Section 4.1 of the Company Disclosure Schedule for the Company taken as a whole; or (iv) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(e);
(xf) take make any change in the rate of compensation, commission, bonus or permit other remuneration payable, or pay or agree or promise to be taken pay, conditionally or otherwise, any action to: (A) increase bonus, extra compensation, pension or severance or vacation pay, to any director, officer, employee, salesman or agent of the compensation payable Company except in the ordinary course of business consistent with prior practice and pursuant to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to plans disclosed in Section 2.14(a) of the Company Disclosure Schedule that were in effect as of the date of this Agreement; (B) grant Agreement or make any increase in or commitment to increase any employee benefits, adopt or make any commitment to adopt any additional severance employee benefit plan or termination pay tomake any contribution, or enter into other than regularly scheduled contributions, to any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employeesEmployee Benefit Plan;
(xig) take any action to change any accounting practices, policies or procedures (including, without limitation, including procedures with respect to reserves, revenue recognition, payments of accounts payable and or collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiiih) make any Tax material tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability, liability or agree to an extension of a statute of limitations with respect theretolimitations;
(xivi) pay, dischargedischarge or satisfy any claims, satisfy liabilities or settle any litigation obligations (absolute, accrued, contingent or waiveotherwise), assign other than the payment, discharge or release any rights satisfaction when due, in the ordinary course of business or claims incurred after the date of this Agreement in the ordinary course of business and consistent with respect theretopast practice;
(xvj) fail to maintain enter into any transaction, contract or commitment other than in full force and effect all insurance policies currently in effectthe ordinary course of business; or
(k) take, or permit agree in writing or otherwise to take, any of the coverage thereunder to lapseactions described in Sections 4.1(a) through (j) above, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) which would make any of the representations and or warranties of the Parent or any of its Subsidiaries set forth Company contained in Article III of this Agreement becoming untrue in any material respect or (B) any of incorrect or prevent the conditions Company from performing or cause the Company not to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingperform its covenants herein.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, between . From the date hereof and of this Agreement until the earlier to occur of the Effective Time or such earlier time as and the valid termination of this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")VIII, except (i) as required or otherwise expressly provided for by the Transaction Documents, (ii) as specifically set forth in Section 5.1 of the Company Disclosure Letter, (iii) as required by this Agreement to comply with applicable Law, or unless (iv) as Parent shall otherwise consent in writing, writing (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) the Company shall use its reasonable best efforts to, and shall use its reasonable best efforts to cause each of its Subsidiaries to, conduct its and their respective businesses and operations in all material respects in the ordinary course of business and preserve intact its and each of its subsidiaries’ business organization, including keeping available the services of current executive officers, and to preserve the present relationships with those Persons having significant business relationships with the Company, and
(b) without limiting the foregoing, the Company shall not and shall cause each of its SubsidiariesSubsidiaries not to do any of the following:
(i) shall conduct amend, adopt any amendment to or otherwise change its Memorandum and Articles of Association or other Organizational Documents;
(ii) effect or commence any complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization, reorganization, or similar transaction;
(iii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among the Company and its wholly owned Subsidiaries;
(iv) make any acquisition of (whether by merger, consolidation or acquisition of stock or substantially all of the assets), or make any investment in any interest in, any business only or any corporation, partnership or other business organization or division thereof or any property, assets or securities, in each case, except for (A) purchases of pharmaceutical ingredients, inventory and other assets in the ordinary course of business, consistent (B) acquisitions or investments pursuant to existing Contracts in effect as of the date hereof, (C) investments in or other transactions with past practice; (ii) shall not take any actionwholly owned Subsidiary of the Company, or fail to take any action, except (D) capital expenditures in the ordinary course of business, consistent accordance with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, keep available the services of their officers, employees and consultants and maintain in effect all Company Material Contracts. By way of amplification and not limitation, except as expressly permitted by this Agreement, neither the Company nor any of its Subsidiaries shall , during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseSection 5.1(b)(xiii);
(iiv) issue, sell, transfergrant, authorize, pledge, encumber or dispose of (or encumber authorize the issuance, sale, grant, authorization, pledge, encumbrance or disposition 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 Equity Securities of the Company or any of its Subsidiaries;
, except for (iiiA) redeemany issuance, repurchase sale or otherwise acquire, directly or indirectly, any shares of capital stock of disposition to the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to by any Subsidiary of the Company), (B) any issuance of Shares upon the exercise of Company Options or Company Warrants or settlement of Company RSUs, in each case outstanding as of the date hereof in accordance with their terms in effect on the date hereof, or (C) withholding of Shares in full or partial payment of any purchase price or exercise price and any applicable Taxes payable by such holder upon the exercise, settlement or lapse of conditions or restrictions on the Company Equity Awards, in each case outstanding as of the date hereof in accordance with their terms in effect on the date hereof;
(vi) reclassify, combine, split, combine reverse split, consolidate, recapitalize, subdivide, redeem, purchase or reclassify otherwise acquire any Equity Security of the Company or any of the Company’s Subsidiaries or consummate or authorize any other similar transaction with respect to shares of its capital stock or ownership interests of the Company or any of its Subsidiaries (or any warrants, options or other securities rights to acquire the foregoing) other than (A) the acquisition by the Company of Shares in connection with the surrender of Shares by holders of Company Equity Awards or equity intereststhe withholding of Shares in full or partial payment of any purchase price or exercise price and any applicable Taxes payable by such holder upon the exercise, settlement or lapse of conditions or restrictions on the Company Equity Awards, in each case, outstanding as of the date hereof in accordance with their terms in effect on the date hereof, (B) in connection with the forfeiture of Company Equity Awards outstanding as of the date hereof in accordance with their terms in effect on the date hereof, (C) purchase, transfer or other disposal between or among the Company and its wholly owned Subsidiaries, or issue any other securities (D) pursuant to existing Contracts in respect of, in lieu effect as of or in substitution for shares of its capital stock or equity intereststhe date hereof;
(vii) sellcreate or incur any Lien, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than Permitted Liens, on any assets of the Company or its Subsidiaries, other than (A) increased obligations under existing Liens resulting from indebtedness incurred in accordance with Section 5.1(b)(xvii), (B) as required pursuant to existing Contracts in effect as of the date hereof as set forth in Section 5.1(b)(xiv) of the Company Disclosure Letter, (C) in the ordinary course of business consistent with past practiceor (D) pursuant to Incidental Contracts;
(viii) acquire authorize or make any loans, advances (other than ordinary course business expenses, any advance or prepayment for any capital expenditure otherwise permitted under Section 5.1(b)(xiii)), capital contributions to, or other investments in, any Person (other than the Company or any of its Subsidiaries) in excess of $500,000 (or its equivalent in RMB or another currency) in the aggregate;
(ix) sell, transfer or otherwise dispose of (whether by merger, consolidation, acquisition consolidation or disposition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereof;
(ix) incur thereof or otherwise sell, lease, assign, license, transfer, exchange, swap, abandon, knowingly fail to renew or permit to lapse or expire, grant an easement or covenant not to assert with respect to, grant any indebtedness for borrowed money rights under, or issue subject to any debt securities or assume, guarantee Lien (other than guarantees Permitted Liens), fail to maintain or defend in full force and effect (including any failure to protect the confidentiality of bank debt any material Intellectual Property, or disclose, license, release, deliver, escrow or otherwise make available or grant any rights to any source code), or dispose of any material assets, rights or properties (including material Intellectual Property) other than (A) sale or disposition of inventory (or, in the case of Intellectual Property, non-exclusive licenses or covenants not to sue which are (x) not material to the business of the Company's Subsidiaries entered into Company and its Subsidiaries, taken as a whole, and (y) incidental to the primary purpose of the applicable arrangement) in the ordinary course of business or are otherwise pursuant to an Incidental Contract, (B) pursuant to existing Contracts in effect as of the date hereof, (C) between or among the Company and its wholly owned Subsidiaries, (D) with respect to tangible assets with a fair market value of less than $125,000 (or its equivalent in RMB or another currency) in a single transaction or series of related transactions or are otherwise dispositions or abandonments of immaterial assets in the ordinary course of business, or (E) or endorse or otherwise as an accommodation become responsible such actions that are taken for the purpose of permitting to expire Intellectual Property registrations expiring at the end of their statutory terms;
(x) unless mandated by a Governmental Entity, (A) make any changes to, discontinue, terminate or suspend any ongoing research and development program or clinical trial relating to a Company Product or (B) commence, alone or with any third party, any research and development program or clinical trial that has not been disclosed to Parent prior to the date of this Agreement;
(xi) make any material submissions or filings to the FDA, NMPA or any other applicable health regulatory Governmental Entity related to the Company’s business and operations or any Company Product, without, to the extent practicable and legally permissible, (A) providing Parent with a reasonable opportunity to review and comment on such submissions or filings and (B) using good faith efforts to incorporate any of Parent reasonable comments that are received in a timely fashion;
(xii) declare, set aside, establish a record date for, authorize, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of the Company’s or its Subsidiaries’ capital stock, (except for any dividend or distribution by a Subsidiary of the Company to the Company or any Subsidiary of the Company);
(xiii) authorize, make or incur any capital expenditures or obligations or liabilities in connection therewith, other than (A) any capital expenditures contemplated by the capital expenditure budget of the Company and its Subsidiaries made available to Parent prior to the date of this Agreement as set forth in Section 5.1(b)(xiii) of the Company Disclosure Letter, and (B) capital expenditures of less than $200,000 (or its equivalent in RMB or another currency) individually or $500,000 (or its equivalent in RMB or another currency) in the aggregate;
(xiv) other than Incidental Contracts, (A) enter into any PersonContract that would have been a Material Contract if it had been in effect as of the date hereof, except for any statement of work issued under an existing Material Contract, in each case not in excess of $500,000 individually, or (B) modify or amend in any material respect, terminate, permit to expire or waive any material rights or obligations under any Material Contract;
(xv) enter into any Contract or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement other commitment pursuant to which the Company or any of its Subsidiaries is Affiliates would receive, directly or indirectly, the benefit of any funding, grants, facilities, services or other resources of a party as of the date of this AgreementGovernmental Entity, including any such commitment pursuant to which such Governmental Entity would be entitled to any ownership interest or other right in or to any Intellectual Property;
(xxvi) authorize voluntarily terminate, suspend, abrogate, amend, let lapse or modify any capital expenditures material Permit in a manner materially adverse to the Company and its Subsidiaries, taken as a whole;
(xvii) except for intercompany loans between the Company and any of its wholly owned Subsidiaries or between any wholly owned Subsidiaries of the Company, incur, prepay, issue, syndicate, refinance, or otherwise become liable for, indebtedness for borrowed money in excess of $175,000 500,000 (or its equivalent in RMB or another currency), or modify in any material respect the terms of any such indebtedness for borrowed money, or assume, guarantee or endorse the obligations of any Person (other than a wholly owned Subsidiary of the Company), in each case, in excess of $500,000 (or its equivalent in RMB or another currency), other than (A) guarantees incurred in compliance with this Section 5.1 by the Company of indebtedness of Subsidiaries of the Company, (B) the incurrence or guarantee of indebtedness under any existing credit facilities or other Contracts as in effect on the date hereof in an aggregate amount not to exceed the maximum amount authorized under the Contracts evidencing such indebtedness, or (C) in the aggregateordinary course of business;
(xixviii) take except to the extent required by Law, pursuant to this Agreement or permit to be taken the terms of any action to: Company Plan as in effect on the date hereof, or mandated by a Governmental Entity, (A) increase the compensation payable to its officers or employeesbenefits of any Company Employee, except (B) grant or pay (or otherwise increase) any cash or equity-based incentive compensation (including any Company Equity Awards) change in control, retention, severance, termination pay or other similar arrangement for increases any Company Employee, (C) establish, adopt, enter into, amend or terminate any Company Plan or any other compensation or benefit plan, program, agreement or arrangement that would be a Company Plan if in salary or wages in accordance with agreements entered into prior to effect on the date of this Agreement Agreement, (D) grant, cancel or otherwise in forgive any loan or advance of any money or any other property to any Company Employee, (E) hire, promote or terminate any employee at (or who would be at) the ordinary course level of business Vice President or above (other than a termination for cause as determined by the Company consistent with past practice; ), (F) increase the use of labor dispatch employees, or (G) take any action to accelerate the vesting, funding or payment of any compensation, or benefits under, any Company Plan or otherwise;
(xix) change, in any material respect, in any financial accounting principles, except as may be required to conform to changes in applicable Law or GAAP or regulatory requirements with respect thereto;
(xx) except to the extent required by applicable Law, (A) adopt or change any material Tax accounting method , (B) grant any additional severance or termination pay tomake, revoke, or enter into change any employment material Tax election, claim, surrender, notice or severance agreements withconsent, its officers; (C) grant affirmatively surrender any severance or termination pay toclaim for a refund of a material amount of Taxes, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; closing agreement or other written ruling or agreement with a Taxing Authority with respect to a material amount of Taxes, (E) establishamend any material Tax Return, adopt(F) settle, compromise or otherwise resolve any material legal proceeding, audit, examination or investigation relating to Taxes, (G) fail to file when due (taking into account any extensions automatically granted) any material Tax Return or to pay when due any material Taxes, (H) change any annual Tax accounting period, or (I) change its residence for any Tax purpose or establish any permanent establishment or taxable presence in a jurisdiction where it is not so resident;
(xxi) except to the extent required by applicable Law or mandated by a Governmental Entity, enter into or amend in negotiate any material respect CBA, or organize or certify any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance labor union or other plan, trust, fund, policy or arrangement labor organization as the bargaining representative for the benefit of any of its directors, officers or employeesCompany Employee;
(xiixxii) change any accounting policies or procedures (includingwaive, without limitationrelease, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect theretoAction, other than settlements in the ordinary course or compromises of business that involve only the payment of non-material amounts of cash and no admission being made with respect to any Action (A) any criminal wrongdoing that only involve payment of money damages where the amounts paid (net of insurance proceeds received) does not exceed $500,000 (or its equivalent in RMB or another currency) individually, (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent or (C) pursuant to or in connection with past practice; the Transaction Documents;
(iixxiii) shall not take any actionterminate or cancel, let lapse, or fail to take amend or modify in any actionmaterial respect, except other than renewals in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services any material insurance policies maintained by it which are not promptly replaced by a comparable amount of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseinsurance coverage;
(iixxiv) issue, sell, transfer, pledge, dispose enter any new line of or encumber any shares business outside 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 its existing business as of the Parent; or any of date hereof that is material to the Company and its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real propertywhole; or
(xixxxv) authorizeagree, recommend, propose, announce authorize or enter into any agreement, contract, commitment or arrangement commit to do or take any of the foregoingforegoing actions described in Section 5.1(b)(i) through Section 5.1(b)(xxiv).
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 .1 Conduct of Business of by the Company Pending the Merger.
(a) . The Company ----------------------------------------------------- covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Time, except as expressly required or permitted by this Agreement or unless Parent shall otherwise consent agree in writingwriting in advance, which consent the Company shall not be unreasonably withheld, conduct and shall cause the businesses of each of its Subsidiaries to be conducted only in, and the Company and its Subsidiaries:
(i) Subsidiaries shall conduct its business only in not take any action except in, the ordinary course of business, business and in a manner consistent with past practice; (ii) shall not take any action, or fail to take any action, except practice and in the ordinary course of business, consistent compliance with past practice; and (iii) applicable Laws. The Company shall use its reasonable best efforts to preserve intact the business organization and assets of the Company and each of its business organizationSubsidiaries, properties and assets, to keep available the services of their the present officers, employees and consultants of the Company and each of its Subsidiaries, to maintain in effect all its Contracts and to preserve the present relationships of the Company Material Contractsand each of its Subsidiaries with advertisers, sponsors, customers, licensees, suppliers and other Persons with which the Company or any of its Subsidiaries has business relations. By way of amplification and not limitation, except as expressly permitted by this Agreement, neither the Company nor any of its Subsidiaries shall shall, during between the Interim Perioddate hereof and the Effective Time, directly or indirectlyindirectly do, do or propose to do, any of the following without the prior written consent of Parent:
(ia) amend its or otherwise change the Certificate of Incorporation, Incorporation or Bylaws or other equivalent organizational documents, document of the Company or otherwise any of its Subsidiaries or alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwisein any other fashion the corporate structure or ownership of the Company or any of its Subsidiaries;
(iib) issue, grant, sell, transfer, deliver, pledge, promise, dispose of or encumber encumber, or authorize the issuance, grant, sale, transfer, deliverance, pledge, promise, disposition or encumbrance of, any shares of capital stock of any classclass (common or preferred), or any options, options (other than stock options under the 1999 Stock Option Plan granted to new employees consistent with past practice in order to continue the employee recruitment efforts of the Company as mutually and reasonably determined by Parent and the Company) warrants, convertible or exchangeable securities or other rights of any kind to acquire any shares of capital stock, stock or any other ownership interest or Stock-Based Rights of the Company or any of its Subsidiaries;
Subsidiaries (iii) except for the issuance of Company Common Stock issuable pursuant to the Outstanding Employee Options); adopt, ratify or effectuate a stockholders' rights plan or agreement; or redeem, repurchase purchase or otherwise acquire, directly or indirectly, any shares of the capital stock of the Company or interest in or securities of any Subsidiary (except for the repurchase of its Subsidiariesa stockholder's Company Common Stock upon termination of such stockholder's status as an employee or consultant pursuant to existing repurchase agreements and the Option Plans);
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(vc) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Companyits parent);
(vi) ; split, combine or reclassify any shares of its capital stock or other securities or equity interestsstock, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for for, shares of its capital stock stock; or equity interestsamend the terms of, repurchase, redeem or otherwise acquire, or permit any Subsidiary to repurchase, redeem or otherwise acquire, any of its securities or any securities of its Subsidiaries; or propose to do any of the foregoing;
(viid) sell, transfer, deliver, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant encumber or otherwise dispose of (in whole or in part), or create, incur, assume or subject any Lien on, any of the assets of the Company or any of its Subsidiaries (including any Intellectual Property), except for the sale of goods, licenses of Intellectual Property involving annual revenue, payments or amend liabilities of less than $100,000 or modify having a term of less than one year, and dispositions of other immaterial assets, in any material respect any existing agreements with respect to any Company Intellectual Property other than case, in the ordinary course of business and in a manner consistent with past practice;
(viiie) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company of any of its Subsidiaries (other than the Merger);
(f) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) or organize any corporation, limited liability company, partnership, joint venture venture, trust or other entity or any business organization or division thereof;
(ix) ; incur any indebtedness for borrowed money or issue any debt securities or any warrants or rights to acquire any debt security or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for for, the obligations of any Person, or make any loans, advances or enter into any financial commitments; or authorize or make any capital expenditures which are, in the aggregate, in excess of $1,000,000 for the Company and its Subsidiaries taken as a whole;
(g) hire or terminate any employee or consultant, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) consistent with past practice; increase the compensation or fringe benefits (including, without limitation, bonus) payable or to become payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to of employees of the date Company or its Subsidiaries who are not officers of this Agreement or otherwise the Company in the ordinary course of business consistent with past practice; (B) grant , or loan or advance any additional severance money or termination pay other asset or property to, or enter into any employment or severance agreements with, its officers; (C) grant any bonus, severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee except in accordance with agreements entered into before of the date Company or any of this Agreement its Subsidiaries, or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into into, terminate or amend in any material respect Employee Plan or any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, stock purchase, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any of its current or former directors, officers or employees, provided that nothing in this Section 4.1(g) shall restrict the ability of the Company's Board of Directors to adopt appropriate resolutions, with respect to persons who are officers or directors of the Company, to cause the transactions relating to the Merger that may be considered dispositions under Section 16 of the Exchange Act for such persons to be exempt from such Section;
(xiih) change any accounting policies or procedures (including, without limitation, including procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), ) unless required by statutory accounting principles a change in Law or GAAP or in connection with the Mergerused by it;
(xiiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue revalue in any material respect or (B) any of its assets, including without limitation writing down the conditions to the Closing set forth in Article VI value of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorizeinventory or writing off notes or accounts receivable, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only other than in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, between After the date hereof and prior to the Closing Date or earlier to occur termination of this Agreement, except (i) as set forth in Section 6.1 of the Effective Time Company Disclosure Schedule, (ii) in connection with specific actions that the Company is explicitly required or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred permitted to as the "Interim Period"), except as expressly required by take pursuant to this Agreement or unless Parent (iii) to the extent that Acquiror shall otherwise consent in writing, writing (which consent shall not be unreasonably withheldwithheld or delayed), the Company shall, and shall cause each of the Company and its Subsidiariessubsidiaries to:
(ia) shall conduct its business only in all material respects in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, keep available the services of their officers, employees and consultants and maintain in effect all Company Material Contracts. By way of amplification and not limitation, except as expressly permitted by this Agreement, neither the Company nor any of its Subsidiaries shall , during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(vb) not (i) amend or propose to amend its articles of incorporation or bylaws, (ii) split, combine or reclassify its outstanding capital stock or (iii) declare, set aside or pay any dividend or other distribution (whether payable in cash, stock stock, property or other securities otherwise, except for (x) periodic cash dividends paid in the ordinary course of business, (y) dividends or propertydistributions paid by a subsidiary of the Company to the Company or another subsidiary of the Company and (z) any declaration, set-aside, or payment pursuant to the terms of any Employee Benefit Plan of the Company or its subsidiaries;
(c) not issue or sell or agree to issue or sell any additional shares of, or any combination thereof) in respect of options, warrants or rights to acquire any of its shares of, capital stock or other equity interests (thereof, except that a wholly owned Subsidiary of the Company may declare issue shares upon exercise of outstanding stock options or warrants referred to in Section 4.2 hereof and pay a cash dividend to Company Options under the Company)Company Employee Plans;
(vid) splitnot (i) incur any indebtedness for borrowed money, combine other than borrowings in the ordinary course of business, (ii) redeem, purchase, acquire or reclassify offer to purchase or acquire any shares of its capital stock or other securities any options, warrants or equity interests, or issue rights to acquire any other securities in respect of, in lieu of or in substitution for shares of its the capital stock thereof or equity interests;
any security convertible into or exchangeable for such capital stock, (viiiii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose make any acquisition of any Company Intellectual Propertyassets or businesses, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than acquisitions of assets in the ordinary course of business consistent with past practice;
of no more than $100,000, (viiiiv) acquire (by mergersell, consolidation, acquisition dispose of stock or encumber any material assets or otherwise) any corporationbusinesses, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees sales of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except assets in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (Dv) enter into any collective bargaining binding contract, agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement with respect to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.; and
(ae) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable all best efforts to preserve intact its business organization, properties organization and assets, goodwill and keep available preserve the services of their officers, employees business relationships with material customers and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other others having material business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance relationships with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingthem.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 SECTION 5.1 Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between during the period from the date hereof of this Agreement and continuing until the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by termination of this Agreement or the Effective Time, unless Parent Parent, shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries:
(i) shall conduct its business only in in, and the Company shall not take any action except in, the ordinary course of business, business and in a manner consistent with past practice; (ii) shall not take any action, or fail to take any action, except practice other than actions taken by the Company in contemplation of the ordinary course of business, consistent with past practiceMerger; and (iii) the Company shall use its all reasonable best commercial efforts to preserve substantially intact its the business organizationorganization of the Company, properties and assets, to keep available the services of their the present officers, employees and consultants of the Company and maintain in effect all to preserve the present relationships of the Company Material Contractswith customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, neither the Company nor any of its Subsidiaries shall not, during the Interim Periodperiod from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectlyindirectly do, do or propose to do, any of the following without the prior written consent of Parent:
(ia) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring change the Articles of Incorporation or otherwiseBy-Laws of the Company;
(iib) issue, sell, transfer, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or 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, or its affiliates (except for the issuance of shares of Company Common Stock issuable pursuant to Stock Options which were granted under the Company or any of its Subsidiaries;Stock Option Plan and are outstanding on the date hereof).
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(ivc) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, assets of the Company (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, and (iii) sales of immaterial assets not in excess of $10,000 in the aggregate);
(vi) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests stock, (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(viii) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock (except for the issuance of shares of Company Common Stock issuable pursuant to Stock Options which were granted under the Company Stock Option Plan and are outstanding on the date hereof) or equity interests(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 Stock or any option, warrant or right, directly or indirectly, to acquire shares of the Company's capital stock or propose to do any of the foregoing;
(viii) sellacquire (by merger, transferconsolidation, leaseor acquisition of stock or assets) any corporation, licensepartnership or other business organization or division thereof; (ii) incur any indebtedness for borrowed money calling for aggregate payments in excess of $10,000 or issue any debt securities or assume, sublicense, mortgage, pledge, dispose of, encumber, grant guarantee or endorse or otherwise dispose as an accommodation become responsible for, the obligations of any Company Intellectual Propertyperson or, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than except in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances loans or advances; (iii) enter into or amend any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan material contract or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
agreement; (xiv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $175,000 in 10,000 for the aggregateCompany and its subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 5.1(e);
(xi) take or permit to be taken any action to: (Af) increase the compensation payable or to become payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement withwith any director, any officer or other employee except in accordance with agreements entered into before of the date of this Agreement Company, or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any of its current or former directors, officers or employees, except, in each case, as may be required by law provided the Company may increase wages in the ordinary course of business consistent with the Company's past practice but not more than 5% for any individual employee;
(xiig) take any action to change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiiih) make any Tax material tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability, tax liability or agree to an extension of a statute of limitations with respect theretolimitations;
(xivi) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, dischargedischarge or satisfy any claims, satisfy liabilities or settle any material litigation obligations (absolute, accrued, asserted or waiveunasserted, assign contingent or release any rights or claims with respect theretootherwise), other than settlements the payment, discharge or satisfaction in the ordinary course of business that involve only and consistent with past practice of liabilities reflected or reserved against in the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing Financial Statements or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only incurred in the ordinary course of business, business and consistent with past practice; or
(iij) shall not take any actiontake, or fail agree in writing or otherwise to take any actiontake, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
actions described in Sections 5.1 (a) through (i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber any shares of capital stock of any classabove, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) 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 action which would make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and or warranties of the Parent or any of its Subsidiaries set forth Company contained in Article III of this Agreement becoming untrue in any material respect or (B) any of incorrect or prevent the conditions Company from performing or cause the Company not to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingperform its covenants hereunder.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 Section 5.01 Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between from the date hereof and of this Agreement until the earlier to occur of the Effective Time or such earlier time as and termination of this Agreement is terminated in accordance with pursuant to Article VII (such period being hereinafter referred to as the "Interim Period")VIII, except as expressly (x) required by applicable Law, or (y) contemplated or permitted by this Agreement or Agreement, unless Parent shall may otherwise consent in writing, writing (which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries:
delayed or conditioned), (i) the businesses of the Group Companies shall conduct its business only be conducted in the ordinary course of business, business consistent with past practicepractice in all material respects; and (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) Company shall use its commercially reasonable best efforts to preserve substantially intact its the assets and the business organizationorganization of the Group Companies, properties and assets, to keep available the services of their officers, the current officers and key employees of the Group Companies and consultants and to maintain in effect all Company Material Contractsmaterial respects the current relationships of the Group Companies with existing customers, suppliers and other persons with which any Group Companies has material business relations as of the date hereof. By way Without limiting the generality of amplification the foregoing paragraph, from the date of this Agreement until the earlier of the Effective Time and not limitationtermination of this Agreement pursuant to Article VIII, except as expressly (x) required by applicable Law, or (y) contemplated or permitted by this Agreement, neither the Company nor any of its Subsidiaries shall not, during the Interim Period, directly and shall procure that no Group Company will do or indirectly, propose to do any of the following without the prior written consent of Parent:Parent (which consent shall not be unreasonably withheld, delayed or conditioned):
(ia) amend or otherwise change its Certificate memorandum and articles of Incorporation, Bylaws association or other equivalent organizational documents, other than immaterial amendments in the ordinary course of business, including without limitation, change of entity name or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseregistered address;
(iib) issue, sell, transfer, pledgelease, dispose of or encumber any shares of capital stock of any classsublease, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transferlicense, pledge, dispose of, grant or encumber, or authorize the issuance, sale, transfer, lease, sublease, license, pledge, disposition, grant or encumbrance of, (i) any Equity Securities of any class of any Group Company (other than in connection with (A) the exercise of any Company Options or encumber the settlement of any Company RSUs or Company Restricted Shares outstanding as of the date of this Agreement in accordance with the terms of the Company Share Plans and the award agreements applicable thereto as at the date of this Agreement, (B) the withholding of Company securities to satisfy tax obligations with respect to Company Options, Company RSUs or Company Restricted Shares, (C) the acquisition by the Company of its securities in connection with the forfeiture of Company Options, Company RSUs or Company Restricted Shares, or (D) the acquisition by the Company of its securities in connection with the net exercise of Company Options in accordance with the terms thereof, (ii) any property or assets (whether real, personal or mixed, and including leasehold interests and intangible property) of any Group Company with a value or purchase price (including the value of assumed liabilities) in excess of RMB10,000,000, except in the ordinary course of business, or (iii) any material properties, facilities, equipment Intellectual Property owned by or other assetslicensed to any Group Company, except in the ordinary course of business consistent with past practice;
(vc) declare, set aside aside, make or pay any dividend or other distribution (whether distribution, payable in cash, stock shares, property or other securities or propertyotherwise, or any combination thereof) in with respect of to any of its capital stock shares (other than dividends or other equity interests (except that a wholly owned distributions from any Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its other Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees);
(xiid) change any accounting policies reclassify, combine, split, subdivide or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liabilityredeem, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase purchase or otherwise acquire, directly or indirectly, any shares of its share capital stock of the Parent or interest in or securities or other rights exchangeable into or convertible or exercisable for any of any Subsidiary its share capital (other than the purchase of ParentShares to satisfy obligations under the Company Share Plans, including the withholding of Shares in connection with the exercise of Company Options, Company RSUs or Company Restricted Shares in accordance with the terms and conditions of such Company Options, Company RSUs or Company Restricted Shares (as applicable)), except as required by applicable Law;
(ive) selleffect or commence any liquidation, transferdissolution, pledgescheme of arrangement, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, amalgamation, restructuring, reorganization, public offering or similar transaction involving any Group Company, or create any new Subsidiary, other than the Transactions;
(f) acquire, whether by purchase, merger, spin off, consolidation, scheme of arrangement, amalgamation or acquisition of stock or assets or otherwise, any assets, securities or properties, in aggregate, with a value or purchase price (including the value of assumed liabilities) in excess of RMB10,000,000 in any transaction or related series of transactions;
(g) make any capital contribution or investment in any corporation, limited liability company, partnership, joint venture or other business organization or any division thereofthereof in excess of RMB10,000,000 in aggregate, except for any capital contribution or investment in any Group Company;
(viiih) incur incur, assume, alter, amend or modify any indebtedness for borrowed money Indebtedness, or guarantee any Indebtedness, or issue any debt securities securities, except for (i) the incurrence or assumeguarantee of Indebtedness under any Group Company’s existing credit facilities as in effect on the date hereof in an aggregate amount not to exceed the maximum amount authorized under the Contracts evidencing such Indebtedness or (ii) not in an aggregate amount in excess of RMB100,000,000;
(i) other than expenditures necessary to maintain assets in good repair consistent with the past practice, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Personauthorize, or make any loanscommitment with respect to, advances any single capital expenditure which is in excess of RMB10,000,000 or capital expenditures which are, in the aggregate, in excess of RMB20,000,000 for the Group Companies taken as a whole;
(j) except as required pursuant to any Company Employee Plan or this Agreement, (i) enter into any financial commitmentsnew employment or compensatory agreements (including the renewal of any such agreements), or terminate any such agreements, with any Employee of any Group Company other than the hiring or termination of employees with an individual annual compensation of less than RMB2,000,000, (ii) grant or provide any severance or termination payments or benefits to any Employee of any Group Company in an aggregate amount in excess of RMB500,000, (iii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to any Employee of any Group Company except such increases or payments, in the aggregate, do not cause an increase in the labor costs of the Group Companies, taken as a whole, by more than five percent (5%), (iv) establish, adopt, amend or terminate any Company Employee Plan or materially amend the terms of any outstanding Company Options, Company RSUs or Company Restricted Shares, (v) take any action to accelerate the vesting or payment of compensation or benefits under the Company Employee Plan, or (vi) forgive any loans to any Employee of any Group Company;
(ixk) authorize make any capital expenditureschanges with respect to financial accounting policies or procedures, including changes affecting the reported consolidated assets, liabilities or results of operations of the Group Companies, except as required by changes in statutory or regulatory accounting rules or IFRS or regulatory requirements with respect thereto;
(xl) take enter into, amend, modify, consent to the termination of, or permit to waive any material rights under, any Material Contract (or any Contract that would be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements a Material Contract if such Contract had been entered into prior to the date hereof) which calls for annual aggregate payments of RMB5,000,000 or more with a term longer than one (1) year and which cannot be terminated without material surviving obligations or material penalty upon notice of ninety (90) days or less, other than (A) any termination or renewal in accordance with the terms of any existing Material Contract that occur automatically without any action by any Group Company, (B) as may be reasonably necessary to comply with the terms of this Agreement; , or (C) actions permitted under Section 5.01(h);
(m) terminate or cancel, let lapse, or amend or modify in any material respect, other than renewals in the ordinary course of business, any material insurance policies maintained by it which are not promptly replaced by a comparable amount of insurance coverage;
(n) without prejudice to clause (r) below, settle, release, waive or compromise any pending or threatened Action against any Group Company (A) for an amount required to be paid by any Group Company in excess of US$1,500,000, (B) grant that would impose any additional severance material restrictions on the business or termination pay tooperations of any Group Company;
(o) permit any material Intellectual Property owned by any Group Company to lapse or to be abandoned, dedicated, or disclaimed, fail to perform or make any applicable filings, recordings or other similar actions or filings, fail to pay all required fees and Taxes required or advisable to maintain and protect its interest in each and every item of material Intellectual Property owned by any Group Company, or grant or license or transfer to any Third Party any material Intellectual Property owned by any Group Company;
(p) fail to make in a timely manner any filings or registrations with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(q) engage in the conduct of any new line of business material to the Company and its Subsidiaries, taken as a whole;
(r) make or change any material Tax election, amend any Tax Return, enter into any employment material closing agreement or severance agreements with, its officers; (C) grant seek any severance or termination pay to, or enter into ruling from any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures Governmental Authority with respect to reservesmaterial Taxes, revenue recognitionsurrender any right to claim a material refund of Taxes, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise finally resolve any material federalcontroversy with respect to Taxes, state, local or foreign Tax liability, or agree to an extension or waiver of a the statute of limitations with respect theretoto the assessment or determination of material Taxes, change any method of Tax accounting or Tax accounting period or initiate any voluntary Tax disclosure to any Governmental Authority;
(xivs) pay, discharge, satisfy grant any fixed or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any floating security interests of the coverage thereunder to lapseCompany, except in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any ordinary course of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real propertybusiness; or
(xixt) authorizeannounce an intention, recommend, propose, announce or enter into any agreementagreement or otherwise make a legally binding commitment, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII VIII (such period being hereinafter referred to as the "“Interim Period"”), except as expressly required by this Agreement or unless Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld, conditioned or delayed, each of the Company and its Subsidiaries:
: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its commercially reasonable best efforts to preserve intact its business organization, properties and assets, keep available the services of their officers, employees and consultants and consultants, maintain in effect all Company Material ContractsContracts and preserve their relationships, customers, licensees, suppliers and other Persons with which it has business relations. By way of amplification and not limitation, except as expressly permitted by this Agreement, neither the Company nor any of its Subsidiaries shall shall, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Company or any of its SubsidiariesSubsidiaries (except for the issuance of shares of Company Common Stock issuable pursuant to the Company Stock Plan);
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except for sales of inventory and equipment in the ordinary course of business consistent with past practicebusiness;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company)interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practiceProperty;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) (A) issue any debt securities, (B) assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, (C) make any loans, advance to any Person, (D) take any advance with respect to the Company’s existing line of credit with Commerce Bank (the “Line of Credit”) without providing notice to Parent or (E) increase the amount outstanding or the aggregate credit available under the Line of Credit above $3,500,000;
(x) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(xxi) authorize any capital expenditures in excess of $175,000 100,000 in the aggregate;
(xixii) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xiixiv) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiiixv) other than in the ordinary course of business: (A) enter into any Company Material Contract; (B) modify, amend, transfer or terminate any Company Material Contract or waive, release or assign any rights or claims thereto or thereunder; or (C) enter into or extend any lease with respect to real property;
(xvi) enter into any agreement, or amend the terms of any existing agreement, which grants to any Person exclusive supply, manufacturing, production, marketing or distribution rights with respect to any of its products or technologies;
(xvii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xivxviii) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and do not involve any admission with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xvxix) amend the terms of any outstanding options under the Company Stock Plan, except as may be necessary to conform to the terms of this Agreement;
(xx) except for insurance coverage that will terminate as a result of the transactions contemplated hereby, fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvixxi) take fail to make any action expenditures that (without regard are necessary and sufficient to any action takenmaintain or, to the extent budgeted or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent consistent with the Merger from qualifying as a reorganization within the meaning of Section 368(a) past practice of the CodeCompany and its Subsidiaries, improve the conditions of the properties, facilities and equipment of the Company and its Subsidiaries, including, without limitation, budgeted expenditures relating to maintenance, repair and replacement;
(xviixxii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries Company set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI VII of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xixxxiii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 SECTION 4.1: Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between during the period from the date hereof of this Agreement and continuing until the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by termination of this Agreement or the Effective Time, unless Parent shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries:
(i) shall conduct its business only in in, and shall not take any action except in, the ordinary course of business, business and in a manner consistent with past practice; (ii) shall not take any action, or fail to take any action, except in other than actions taken by the ordinary course of business, consistent with past practiceCompany as contemplated by this Agreement; and (iii) the Company shall use its all reasonable best commercial efforts to preserve substantially intact its the business organizationorganization of the Company, properties and assets, to keep available the services of their the present officers, employees and consultants of the Company and maintain in effect all to preserve the present relationships of the Company Material Contractswith customers, suppliers and other persons with which the Company has significant business relations. By way of amplification example and not limitation, except as expressly permitted contemplated by this Agreement, neither the Company nor any of its Subsidiaries shall not, during the Interim Periodperiod from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectlyindirectly do, do or propose to do, any of the following without the prior written consent of Parent:
(ia) amend its or otherwise change the Certificate of Incorporation, Bylaws Incorporation or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseBy-Laws of the Company as amended and restated to date;
(iib) issue, sell, transfer, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or 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 of (including, without limitation, any phantom interest) in the Company or any of its Subsidiaries;affiliates (except for the issuance of shares of Company Common Stock issuable pursuant to Stock Options which are outstanding on the date hereof or pursuant to the exercise of outstanding Warrants).
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(ivc) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, assets of the Company (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, (iii) the transfer of inventory in satisfaction of pre-existing obligations of the Company or sales of immaterial assets not in excess of $5,000 in the aggregate);
(v1) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);stock,
(vi2) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock stock, or
(3) purchase, redeem or equity interestsotherwise acquire any of its outstanding 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, except in connection with the exercise of outstanding options or warrants in accordance with their terms;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii1) acquire (by merger, consolidation, or acquisition of stock or assets or otherwiseassets) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereofthereof (including the creation of any subsidiary);
(ix2) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for for, the obligations of any Person, or make any loans, advances or enter into any financial commitmentsperson or, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice, make any loans or advances;
(3) enter into or amend any material contract or agreement which changes the current relationship with a vendor or supplier ;
(4) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $ 20,000; or
(B5) grant enter into or amend any additional severance contract, agreement, commitment or termination pay toarrangement to effect any of the matters prohibited by this Section 4.1(e);
(f) increase the compensation payable or to become payable to its officers or employees, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement withwith any director, any officer or other employee except in accordance with agreements entered into before of the date of this Agreement Company, or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any of its current or former directors, officers or employees, except, in each case, as may be required by law;
(xiig) take any action to change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiiih) make any Tax material tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability, tax liability or agree to an extension of a statute of limitations with respect theretolimitations;
(xivi) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, dischargedischarge or satisfy any claims, satisfy liabilities or settle any material litigation obligations (absolute, accrued, asserted or waiveunasserted, assign contingent or release any rights or claims with respect theretootherwise), other than settlements the payment, discharge or satisfaction in the ordinary course of business that involve only and consistent with past practice of liabilities reflected or reserved against in the payment financial statements contained in the Company Financial Statements or incurred in the ordinary course of non-material amounts of cash business and no admission being made consistent with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rightspast practice;
(xvj) fail have operating expenses other than non cash charges in excess of $100,000 per month excluding the costs related to maintain in full force and effect all material insurance policies currently in effectthe transactions contemplated by this Agreement; or
(k) take, or permit any of the coverage thereunder agree to lapsetake, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) which would make any of the representations and or warranties of the Company set forth contained in Article II of this Agreement becoming untrue in any material respect or (B) any of incorrect or prevent the conditions Company from performing or cause the Company not to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2perform its covenants hereunder.
4.2 SECTION 4.2: Conduct of Business of by Parent Pending the Merger.
(a) The . During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, the Parent: (i) Parent shall conduct its business only business, and cause the businesses of its subsidiaries to be conducted, in the ordinary course course, other than actions taken by Parent or its subsidiaries in contemplation of businessthe Merger, consistent with past practice; (ii) and shall not take any actiondirectly or indirectly do, or fail propose to take any actiondo, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(ia) amend its or otherwise change Parent's Certificate of Incorporation, Bylaws Incorporation or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseBy-Laws;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(vb) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests;stock, except that a subsidiary of Parent may declare and pay a dividend to its parent; or
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(xc) take or permit agree in writing or otherwise to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) which would make any of the representations and or warranties of the Parent or any of its Subsidiaries set forth contained in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions incorrect or prevent Parent from performing or cause Parent not to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingperform its covenants hereunder.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, between the date hereof and the earlier prior to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Time, except as expressly required by this Agreement or unless Parent shall otherwise consent in writing, writing (which consent shall not be unreasonably withheld, each ) or as otherwise expressly contemplated or permitted by this Agreement:
(a) The businesses of the Company and its Subsidiaries:
(i) the Subsidiaries shall conduct its business be conducted only in in, and the ordinary course of business, consistent with past practice; (ii) Company shall not take any actionaction except in, or fail to take any action, except in the ordinary course of businesscourse, consistent on an arm's-length basis and in accordance in all material respects with all applicable laws, rules and regulations and past custom and practice; and (iii) the Company and the Subsidiaries shall use its reasonable best efforts to preserve intact its business organization, properties maintain their facilities in good condition and assets, keep available repair and in accordance with the services of their officers, employees Company's policies and consultants and maintain procedures relating thereto as in effect all Company Material Contracts. By way prior to the execution of amplification and not limitation, except as expressly permitted by this Agreement, neither the ;
(b) The Company nor any of its Subsidiaries shall , during the Interim Periodnot, directly or indirectly, do or permit to occur any of the following without the prior written consent of Parent:
following: (i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber (or permit any of the Subsidiaries to issue, sell, pledge, dispose of or encumber) (A) any additional shares of capital stock of any classof, or any options, warrants, convertible securities conversion privileges or other rights of any kind to acquire any shares of, any of its capital stock, except for issuances upon the exercise of options or any other ownership interest of warrants outstanding on the Company date hereof, or (B) any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except for fair value in the ordinary course of business consistent with past practice;
business; (vii) amend or propose to amend its Articles of Incorporation or Bylaws; (iii) split, combine or reclassify any outstanding shares of Company Common Stock or other securities of the Company, or declare, set aside or pay any dividend or other distribution (whether payable in cash, stock stock, property or otherwise with respect to shares of Company Common Stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend Company; (iv) redeem, purchase or acquire or offer to the Company);
(vi) split, combine or reclassify acquire any shares of its capital stock Company Common Stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
the Company; (vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiiv) acquire (by merger, exchange, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division or material assets thereof;
; (ixvi) incur or guarantee any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees except the borrowing of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except working capital in the ordinary course of business and as otherwise permitted under consistent with past practice or (vii) enter into or propose to enter into, or modify or propose to modify, any loan agreement, arrangement or credit understanding with respect to any of the matters set forth in this Section 4.1(b);
(c) The Company shall not (and shall not permit any Subsidiary to), directly or indirectly, (i) enter into or modify any Material Contract, agreement or understanding to which the Company is a party; (ii) enter into or modify any employment, severance or similar agreements or arrangements with, or grant any bonuses, salary increases, severance or termination pay to, any officers or directors or consultants; (iii) make any capital expenditures, including any capitalizable lease obligations, other than expenditures necessary to maintain existing assets in good repair and other capital expenditures in amounts not exceeding $10,000 in the aggregate; or (iv) in the case of employees who are not officers or directors or consultants, grant or take any action with respect to the granting of any salary increases, severance or termination pay or increases in other benefits, other than grants or such actions as are in the ordinary course of the Company's business and are consistent with the Company's historic compensation practices, or grant or take any actions with respect to the granting of any bonuses;
(d) The Company shall not (and shall not permit any Subsidiary to) adopt or amend any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, trust, fund or group arrangement for the benefit or welfare of any employees or any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or arrangements for the benefit or welfare of any director;
(e) The Company shall use its best efforts to cause its and the Subsidiaries' current insurance (or reinsurance) policies not to be canceled or terminated or reduced in coverage amount or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation, reduction in coverage amount or lapse, replacement policies providing coverage equal to or greater than the coverage under the canceled, terminated, reduced or lapsed policies for substantially similar premiums are in full force and effect;
(f) The Company and each Subsidiary (i) shall use its best efforts to preserve intact its business organization and good will, keep available the services of its officers and employees as a group and maintain satisfactory relationships with suppliers, distributors, customers and others having business relationships with it; (ii) shall not take any action which would render, or which reasonably may be expected to render, any representation or warranty made by it in this Agreement or in any other agreement or instrument executed in connection with the transactions contemplated hereby untrue at, or at any time prior to, the Effective Time; (iii) shall notify Parent of any emergency or other change in the normal course of its business or in the operation of its properties and of any governmental or third party complaints, investigations or hearings (or communications indicating that the same may be contemplated) if such emergency, change, complaint, investigation or hearing would be material, individually or in the aggregate, to the business, operations or financial condition of the Company and the Subsidiaries is a party or to the Company's, Parent's or the Merger Sub's ability to consummate the transactions contemplated by this Agreement; and (iv) shall notify Parent if the Company shall discover that any representation or warranty made by it in this Agreement was when made, or has subsequently become, untrue;
(g) Neither the Company nor any Subsidiary shall not change any of its methods of accounting or accounting practices in any material respect;
(h) Neither the Company nor any Subsidiary will waive or agree to waive any applicable statute of limitations or any similar statutory or judicial doctrine benefiting the Company;
(i) Neither the Company nor any Subsidiary shall commence or settle any material legal action or proceeding, PROVIDED, that the Company may settle any legal actions or proceedings which were pending as of the date of the Company's Interim Financial Statements so long as the consideration paid or agreed to be paid by the Company in connection with such settlements does not exceed $10,000 in any individual case or $10,000 in the aggregate for all such settlements (in the case of cash settlements) or cause the number of shares of Company Common Stock issued and outstanding, after taking into account any shares issued or canceled in connection with such settlement, to exceed the number of shares of Company Common Stock issued and outstanding on the date of this Agreement;
(xj) authorize any capital expenditures The Company shall cause its officers to report at Parent's request (but in excess no event less frequently than weekly) to Parent concerning the status of $175,000 in the aggregate;Company's business; and
(xik) take or permit Subject to be taken any action to: (A) increase the compensation payable to fiduciary obligations of its officers or employeesdirectors as advised by counsel, the Company shall not, except for increases as required by law, call any meeting of its shareholders other than the meeting contemplated in salary or wages in accordance with agreements entered into prior to Section 5.1.
(1) Neither the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant Company nor any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into Subsidiary shall make or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, or local Tax election, agree to waive or foreign Tax liabilityextend any statute of limitations, or resolve or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect resolve any audit or proceeding relating to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2Taxes.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 SECTION 6.01. Conduct of Business of by the Company Pending the Merger.
(a) The . During the period from the date of this Agreement and continuing until the earlier to occur of the termination of this Agreement or the Effective Time, the Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by this Agreement or unless Parent shall otherwise consent agree in writingwriting and unless otherwise expressly permitted hereunder, which consent the Company shall not conduct its business and shall cause the businesses of its subsidiaries to be unreasonably withheldconducted, each of and the Company and its Subsidiaries:
(i) subsidiaries shall conduct its business only not take any action except, in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except business and in the ordinary course of business, a manner consistent with past practice; and (iii) the Company shall use its reasonable best commercial efforts to preserve substantially intact the business organization of the Company and its business organizationsubsidiaries, properties and assets, to keep available the services of their the present officers, employees and consultants of the Company and maintain in effect all its subsidiaries, and to preserve the present relationships of the Company Material Contractsand its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except as expressly permitted by this Agreement, neither the Company nor any of its Subsidiaries shall subsidiaries shall, during the Interim Periodperiod from the date of this Agreement and continuing until the earlier to occur of the termination of this Agreement or the Effective Time, directly or indirectlyindirectly do, do or propose to do, any of the following without the prior written consent of Parent, unless otherwise expressly permitted hereunder:
(ia) amend or otherwise change the Company's or any of its Certificate subsidiaries' Articles of IncorporationIncorporation or By-Laws, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(iib) issue, sell, transfer, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or 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) of the Company or Company, any of its Subsidiariessubsidiaries or affiliates (except for the issuance of Shares pursuant to the exercise of Options under the Stock Option Plans, which Options are outstanding on the date hereof);
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(ivc) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment assets of the Company or other assets, any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practicepractice and (ii) dispositions of obsolete or worthless assets);
(vd) amend or change the period (or permit any acceleration, amendment or change) of exercisability of Options granted under the Stock Option Plans or the Stock Purchase Plan or other than as expressly provided in Section 7.03(b), authorize cash payments in exchange for any such Options;
(e) (i) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests (stock, except that a wholly owned Subsidiary subsidiary of the Company may declare and pay a cash dividend to the Company);
its parent, (viii) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests(iii) amend the terms of, repurchase, redeem or otherwise acquire, or permit any subsidiary to repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, or propose to do any of the foregoing;
(viif) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant sublicense or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property (other than in the ordinary course of business consistent with past practice) or amend or modify any existing agreements with respect to any material Company Intellectual Property or third party Intellectual Property rights;
(viiii) acquire (by merger, consolidation, consolidation or acquisition of stock or assets or otherwiseassets) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for for, the obligations of any Personperson, or make any loans, loans or advances or except to employees in the ordinary course consistent with past practice; (iii) enter into or amend any financial commitmentscontract or agreement other than in the ordinary course of business; (iv) authorize or make any capital expenditures or purchases of fixed assets that are not currently budgeted and that in the aggregate, exceeds $500,000 (v) terminate any Material Contract or amend any of its material terms (other than amendments to existing credit arrangements designed to remedy defaults thereunder); or (vi) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 6.01(g);
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (Ah) increase the compensation payable or to become payable to its officers or employees, except for increases in salary officers, directors or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement withwith any employee, director or officer of the Company or any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; its subsidiaries or (E) establish, adopt, enter into into, terminate, or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employeesEmployee Plan (except as may otherwise be required by applicable law);
(xii) take any action, other than as required by GAAP, to change any accounting policies or procedures or cash maintenance policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, capitalization of development costs, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiiij) make any material Tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability, except to the extent the amount of any such settlement or agree to an extension of compromise has been reserved for on the consolidated financial statements contained in the Company SEC Reports, or would not have a statute of limitations with respect theretoCompany Material Adverse Effect;
(xivk) pay, discharge, settle, or satisfy any lawsuits, claims, liabilities or settle any litigation obligations (absolute, accrued, asserted or waiveunasserted, assign contingent or release any rights otherwise), other than the payment, discharge or claims satisfaction in the ordinary course of business and consistent with respect theretopast practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice;
(xvl) fail except as may be required by law, take any action to maintain in full force and effect all insurance policies currently in effect, terminate or permit amend any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policiesEmployee Plan;
(xvim) take permit any action that (without regard to any action taken, or agreed to be taken, by material increase in the number of employees of the Company or any of its affiliates) could be considered reasonably likely to prevent subsidiaries employed by the Merger from qualifying Company or any of its subsidiaries, as a reorganization within the meaning of Section 368(a) of case may be, on the Code;date hereof; or
(xviin) take any action or fail to take any reasonable action permitted by this Agreement if such action take, or failure agree in writing or otherwise to take or fail to take, any of the actions described in Section 6.01(a) through (m) above, or any action could reasonably be expected to result in either (A) which would make any of the representations and or warranties of the Parent or any of its Subsidiaries set forth Company contained in Article III of this Agreement becoming untrue or incorrect or prevent the Company from performing or cause the Company not to perform its covenants hereunder or result in any material respect or (B) any of the conditions to the Closing Merger set forth in Article VI of this Agreement herein not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingsatisfied.
Appears in 1 contract
Samples: Merger Agreement (Alcatel)
Conduct of Business Pending the Merger. 4.1 Section 6.1. Conduct of Business of by the Company Pending the Merger.
(a) The Company covenants and agrees that, between . From the date hereof and the earlier to occur of until the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Time, except as expressly required by this Agreement or unless Parent Sponsor shall otherwise consent in writing, which consent shall not be unreasonably withheldor except as set forth in the Company Disclosure Letter or as otherwise expressly permitted by or provided for in this Agreement, each the Conversion Term Sheet, the Post-Merger Integration Plan, or, if approved by the Department and approved and adopted by the requisite vote of the Members, the Plan of Conversion, the Company and its Subsidiariesthe Company Subsidiaries shall conduct their respective businesses in the ordinary course consistent with past practice and shall use all reasonable best efforts to preserve intact their business organizations and goodwill and relationships with third parties (including their respective relationships with policyholders, insureds, agents, underwriters, brokers and investment customers) and to keep available the services of their current key employees and maintain their current rights and franchises, subject to the terms of this Agreement. Except as set forth in the Company Disclosure Letter or as otherwise expressly permitted by or provided for in this Agreement, from the date hereof until the Effective Time, without the prior written consent of Sponsor:
(a) the Company shall not adopt or propose, and shall not permit any Company Subsidiary to adopt or propose, any change in its Constituent Documents (other than the Articles Amendments adopted in connection with the Conversion);
(b) the Company shall not and shall not permit any Company Subsidiary that is not wholly-owned to declare, set aside or pay any dividend or other distribution except to policyholders in the ordinary course of business consistent with past practice;
(c) subject to Section 7.2, the Company shall not, and shall not permit any Company Subsidiary to, (i) shall conduct its business only merge or consolidate with any other Person other than another subsidiary of the Company, (ii) acquire a material amount of the assets or equity of any other Person, or (iii) other than in the ordinary course of business, make or commit to make any capital expenditure;
(d) the Company shall not, and shall not permit any Company Subsidiary to, sell, lease, license, subject to an Encumbrance other than a Permitted Encumbrance, or otherwise surrender, relinquish or dispose of (i) any facility owned or leased by the Company or any Company Subsidiary or (ii) any assets or property except, (x) with respect to clause (ii), pursuant to existing written contracts or commitments (the terms of which have been disclosed to Sponsor prior to the date hereof), or (y) with respect to clauses (i) and (ii), in the ordinary course of business consistent with past practice; ;
(e) the Company shall not, and shall not permit any Company Insurance Subsidiary to, conduct transactions in Company Investments except in compliance with the Consolidated Investment Policy of the Company and the Company Insurance Subsidiaries, in effect on the date hereof, a copy of which has previously been delivered to Sponsor;
(f) the Company shall not and shall not permit any Company Subsidiary (i) to issue, sell, grant, pledge or otherwise encumber any shares of its capital stock or other securities, or split, combine or reclassify any of its capital stock or issue securities in respect of its capital stock or enter into any amendment of any material term of any of its outstanding securities, (ii) shall not take incur or assume any action, indebtedness or fail to take any action, other liabilities except in the ordinary course of business, business consistent with past practice; and practice or pursuant to existing credit facilities, or (iii) shall use its reasonable best efforts to preserve intact its business organizationamend or otherwise increase, properties and assets, keep available accelerate the services of their officers, employees and consultants and maintain in effect all Company Material Contracts. By way of amplification and not limitation, except as expressly permitted by this Agreement, neither the Company nor any of its Subsidiaries shall , during the Interim Period, directly payment or indirectly, do any vesting of the following without the prior written consent of Parent:
(i) amend its Certificate of Incorporation, Bylaws amounts payable or other equivalent organizational documents, to become payable under or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber fail to make 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 of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectlyrequired contribution to, any shares of capital stock of the Company Plan or interest in materially increase any non-salary benefits payable to any employee or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assetsformer employee, except in the ordinary course of business consistent with past practice;
(vg) declarethe Company shall not, set aside and shall not permit any Company Subsidiary to, grant any increase in the compensation or pay any dividend benefits of directors, officers, employees, consultants or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary agents of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property Subsidiary other than increases in the ordinary course of business consistent with past practice;
(viiih) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant practices with respect to field management and support personnel, the Company shall not, and shall not permit any additional severance or termination pay Company Subsidiary to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance employment agreement or other plan, trust, fund, policy employment arrangements with any employee of the Company or arrangement for the benefit of any of its directors, officers or employeesCompany Subsidiary;
(xiii) the Company shall not change any method of accounting policies or procedures (includingaccounting practice by the Company or any Company Subsidiary, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless except for any such required by statutory accounting principles or change in U.S. GAAP or in connection with the Mergerapplicable State Statutory Accounting Practices as agreed by PricewaterhouseCoopers LLP, the Company's independent auditors;
(xiiij) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedulesshall not, pay, discharge, satisfy or settle and shall not permit any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect Company Subsidiary to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard would reasonably be expected to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent cause the Merger from qualifying to fail to qualify as a reorganization within the meaning of Section 368(a) of the Code;
(xviik) the Company shall not permit any Company Subsidiary to purchase or redeem any shares of its capital stock, or any other equity interests or any rights, warrants or options to acquire any such shares or interests, except for any such purchases or redemptions by a wholly-owned subsidiary of the Company;
(l) the Company shall not, and shall not permit any Company Subsidiary to pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), in each case, other than (i) settlement of policy claims or other payments, discharges, settlements or satisfactions in the ordinary course of business consistent with past practice, (ii) settlements of litigation that individually do not exceed $1,000,000 or, in the aggregate, $5,000,000, or (iii) payment of indebtedness, debt securities, guarantees, loans, advances and capital contributions made in the ordinary course of business consistent with past practices but not individually in excess of $1,000,000 or in the aggregate in excess of $5,000,000;
(m) the Company shall not, and shall not permit any Company Subsidiary to, other than in the ordinary course of business consistent with past practices, (i) make or rescind any material express or deemed election relating to Taxes, (ii) settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, which, individually or in the aggregate, exceeds $500,000, (iii) make a request for a written ruling of a taxing authority relating to Taxes, other than any request for a determination concerning qualified status of any Plan intended to be qualified under Code Section 401(a), (iv) enter into a written and legally binding agreement with a taxing authority relating to Taxes, or (v) change in any material respect any of its methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of its federal income tax returns for the taxable year ending December 31, 2000;
(n) the Company shall not, and shall not permit any Company Subsidiary to, other than in the ordinary course of business consistent with past practice, modify or amend in any material respect or terminate any Company Contract or enter into any new agreement which would have been considered a Company Contract if it were entered into at or prior to the date hereof;
(o) The Company shall not, and shall not permit any Company Subsidiary to, terminate, amend, modify or waive any provision of any standstill agreement or any standstill provisions of other agreements to which it is a party, and the Company shall, and shall cause each Company Subsidiary to, enforce the provisions of any such agreements;
(p) the Company shall not permit any Company Insurance Subsidiary to forfeit, abandon, modify, waive, terminate or otherwise change any of its insurance licenses, except (i) as may be required in order to comply with Applicable Law or (ii) such modifications or waivers of insurance licenses as would not, individually or in the aggregate, restrict the business or operations of such Company Insurance Subsidiary in any material respect;
(q) the Company shall not, and shall not permit or cause any Company Subsidiary to, take any actions or omit to take any actions that would cause any of its representations and warranties herein to become untrue in any material respect or that would cause or reasonably be expected to cause a Company Material Adverse Effect;
(r) the Company shall not terminate, cancel or amend any insurance coverage maintained by it or any Company Subsidiary with respect to any material assets which is not replaced by a comparable amount of insurance coverage;
(s) the Company shall not, and shall not permit any Company Subsidiary to, take any action or fail to take any reasonable action that is not expressly permitted by or provided for in this Agreement if such action or failure to take action could that would reasonably be expected to result in either a reduction of the insurer financial strength ratings of the Company and the Company Insurance Subsidiaries;
(At) the Company will not amend the Company Privacy Policy, except as may be required by Applicable Law or except as would not have or be reasonably likely to result in a Company Material Adverse Effect;
(u) the Company shall not, and shall not permit any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in Insurance Subsidiaries to, make any material respect change in its underwriting, claims management, pricing or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Datereserving practices; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;and
(v) declarethe Company shall not, set aside or pay and shall not permit any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay Company Subsidiary to, agree or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement commit to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Nationwide Financial Services Inc/)
Conduct of Business Pending the Merger. 4.1 Conduct of Business ARMO has agreed that, from the date of the Company Pending Merger Agreement until the Merger.
(a) The Company covenants and agrees that, between earlier of the date hereof on which Purchaser first irrevocably accepts for purchase the Shares tendered in the Offer, (the “Offer Closing Date”) and the earlier to occur termination of the Effective Time or such earlier time as this Merger Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")its terms, except as expressly required provided by this the Merger Agreement or unless Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld, each as disclosed prior to execution of the Company and its Subsidiaries:
(i) shall Merger Agreement in ARMO’s confidential disclosure letter delivered to Lilly in connection with the Merger Agreement, ARMO will conduct its business only in the ordinary course of businessand use commercially reasonable efforts to (i) preserve intact its present business organization, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, keep available the services of their officers, its present executive officers and key employees and consultants (iii) preserve its present relationships and maintain goodwill with customers, suppliers, licensors, licensees, distributors, contractors, partners and others having material business dealings with it. ARMO has further agreed that, from the date of the Merger Agreement to the earlier of the Offer Closing Date or the termination of the Merger Agreement in effect all Company Material Contracts. By way of amplification and not limitationaccordance with its terms, except as expressly permitted provided for by this Agreementthe Merger Agreement or as set forth prior to execution of the Merger Agreement in ARMO’s confidential disclosure letter, neither the Company nor any of its Subsidiaries shall , during the Interim Period, directly or indirectly, ARMO will not do any of the following without the prior written consent of Parent:
Lilly (i) amend its Certificate which consent shall not be unreasonably withheld, delayed or conditioned), among other things and subject to specified exceptions (including specified ordinary course exceptions): • enter into any new material line of Incorporationbusiness or enter into any agreement, Bylaws arrangement or other equivalent organizational documents, commitment that materially limits or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring restricts ARMO or otherwise;
its affiliates (iias further described in Section 5.01(a) issue, sell, transfer, pledge, dispose of or encumber 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 of the Company Merger Agreement), from time to time from engaging or competing in any line of its Subsidiaries;
(iii) redeem, repurchase business or in any geographic area or otherwise acquireenter into any agreements, directly arrangements or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any commitments imposing material properties, facilities, equipment or other restrictions on ARMO’s assets, except in the ordinary course of business consistent with past practice;
(v) operations or business; • declare, set aside aside, establish a record date in respect of, accrue, or pay any dividend dividends on, or make any other distribution (whether in cash, stock or other stock, equity securities or property, or any combination thereof) in respect of any of its ARMO capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) stock; • split, combine or reclassify any shares of its ARMO capital stock or other securities issue or equity interests, or issue authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 ARMO’s capital stock; • repurchase, or any other ownership interest of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase offer to redeem or otherwise acquire, directly or indirectly, any shares of capital stock of ARMO or any options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire any such shares of capital stock except for (A) acquisitions of shares of ARMO common stock in connection with the Parent surrender of shares of ARMO common stock by holders of ARMO stock options in order to pay the exercise price of ARMO stock options, (B) the withholding of shares of ARMO common stock to satisfy tax obligations with respect to awards granted pursuant to the ARMO stock plans and (C) the acquisition by ARMO of ARMO stock options in connection with the forfeiture of such awards, in each case in accordance with their terms; • issue, grant, deliver, sell, authorize or pledge or otherwise encumber any shares of capital stock or options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire such shares, any bonds, debentures, note or other indebtedness having the right to vote or any other rights that give any person the right to receive any economic interest of a nature accruing to the holders of ARMO common stock, other issuances of ARMO common stock upon the exercise of ARMO stock options in accordance with their terms; • amend its certificate of incorporation or bylaws or other comparable organizational documents (except for immaterial or ministerial amendments); • form any subsidiary or acquire or agree to acquire, directly or indirectly, in a single transaction or a series of related transactions, whether by merging or consolidating with, or by purchasing a substantial equity interest in or securities a substantial portion of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or propertythe assets of, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue by any other securities in respect ofmanner, in lieu any assets outside of the ordinary course of business, any business or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, partnership, limited liability company, partnershipjoint venture, joint venture association or other business organization or division thereof or any other person (other than ARMO), if the aggregate amount of consideration paid or transferred by ARMO would exceed $250,000; Table of Contents • adopt, enter into, establish, terminate, amend or modify any collective bargaining agreement, benefit plan or benefit agreement, or any plan or arrangement that would be a benefit plan or benefit agreement if in effect as of May 9, 2018; • xxxxx to any director, employee or individual service provider any increase in compensation; • xxxxx to any director, employee or individual service provider any increase in severance or termination pay; • pay or award, or commit to pay or award, any bonuses or incentive compensation; • enter into any employment, retention, consulting, change in control, severance or termination agreement with any director, employee or individual service provider; • take any action to accelerate any rights or benefits under any benefit plan or benefit agreement, or the funding of any payments or benefits under any benefit plan or benefit agreement; • terminate the employment or service of any employee or individual service provider of ARMO whose total annual compensation exceeds $100,000, other than for cause; • hire any employee or individual service provider whose total annual compensation would exceed $100,000; • make any change in accounting methods, principles or practices, except as may be required (i) by GAAP (or any authoritative interpretation thereof;
), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization, or (viiiii) by law, including Regulation S-X promulgated under the Securities Act of 1933, as amended, in each case as agreed to by XXXX’s independent public accountants; • sell, lease (as lessor), license or otherwise transfer (including through any “spin-off”), or pledge, encumber or otherwise subject to any lien (other than a permitted lien), any properties or assets (other than intellectual property) except (i) sales or other dispositions of inventory and excess or obsolete properties or assets in the ordinary course of business, (ii) pursuant to contracts to which ARMO is a party made available to Lilly and in effect prior to the date of the Merger Agreement or (iii) properties or assets having a fair market value of less than $250,000 in the aggregate; • sell, assign, license or otherwise transfer any of intellectual property owned by XXXX, except (i) for licenses (including sublicenses) to intellectual property granted in the ordinary course of business, (ii) pursuant to contracts to which ARMO is a party made available to Lilly and in effect prior to May 9, 2018, or (iii) abandonment or other disposition of any of ARMO’s intellectual property at the end of the applicable statutory term, in the ordinary course of prosecution or otherwise in the ordinary course of business; • incur or materially modify the terms of (including by extending the maturity date thereof) any indebtedness for borrowed money or guarantee any such indebtedness of another person; • issue or sell any debt securities or assumewarrants or other rights to acquire any debt securities of ARMO, guarantee any debt securities of another Person; • enter into any “keep well” or endorse other agreement to maintain any financial statement condition of another person or otherwise as an accommodation become responsible for enter into any arrangement having the obligations economic effect of any Personof the foregoing, in each case other than (A) interest rate and other hedging arrangements on customary commercial terms in the ordinary course of business consistent with past practice or (B) short-term borrowings incurred in the ordinary course of business not in excess of $250,000 in aggregate principal amount outstanding at any one time; • make any loans, advances or capital contributions to, or investments in, any other person, other than to or in (A) ARMO, (B) any acquisition not in violation of the Merger Agreement or (C) any person pursuant to any advancement obligations under ARMO’s certificate of incorporation or bylaws or indemnification agreements as in effect on or prior May 9, 2018; Table of Contents • other than in accordance with ARMO’s capital expenditure budget made available to Lilly, make or agree to make any capital expenditure or expenditures that in the aggregate are in excess of $250,000; • pay, discharge, settle, compromise or satisfy (i) any pending or threatened claims, liabilities or obligations relating to a legal proceeding (absolute, accrued, asserted or unasserted, contingent or otherwise), other than any such payment, discharge, settlement, compromise or satisfaction of a claim solely for money damages in the ordinary course of business in an amount not to exceed $250,000 individually or $500,000 in the aggregate or (ii) any litigation, arbitration, proceeding or dispute that relates to the Transactions; • make, change or revoke any material tax election, change any annual tax accounting period or adopt or change any material method of tax accounting, file any amended material tax return, enter into any financial commitments;
closing agreement within the meaning of Section 7121 of the Code (ix) authorize or any capital expenditures;
(x) take similar provision of state, local or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivableforeign law), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federaltax liability or refund; • amend, statecancel or terminate any material insurance policy naming ARMO as an insured, local a beneficiary or foreign Tax liabilitya loss payable payee without obtaining comparable substitute insurance coverage; • adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or agree to an extension of a statute of limitations with respect thereto;
other reorganization (xiv) payother than the Merger); • abandon, dischargecancel, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effectrenew, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either lapse (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect ARMO’s registered intellectual property or (B) any of the conditions ARMO’s material registered intellectual property that is exclusively licensed to ARMO to the Closing set forth extent that ARMO has the right to take or cause to be taken such action pursuant to the terms of the applicable contract under which such intellectual property is licensed to ARMO; • fail to renew, terminate or permit to lapse any contract under which material intellectual property is licensed to ARMO; • disclose to any third party, other than under a confidentiality agreement or other legally binding confidentiality undertaking, any trade secret of ARMO that is included in Article VI ARMO’s intellectual property in a way that results in loss of this Agreement not being satisfied material trade secret protection thereon, except for any such disclosures made as a result of a publication of a patent application filed by ARMO or in connection with any required regulatory filing; • sell, transfer, license or otherwise encumber any of ARMO’s material intellectual property other than non-exclusive licenses ancillary to research, development, manufacture, clinical testing, sale, distribution and commercialization activities relating to products or services entered into in the ordinary course of business consistent with past practice; • except as is in the ordinary course of business, enter into, terminate or modify in any material respect as of respect, or release any material rights under, specified material contracts or any contract that, if existing on May 9, 2018, would have been a specified material contract; • participate in any scheduled meetings or teleconferences with, or correspond in writing, communicate or consult with the Closing Date;
(xviii) waiveFDA or any similar governmental entity without providing Lilly with prior written notice and, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease within 24 hours from the time such written notice is delivered, the opportunity to consult with ARMO with respect to real propertysuch correspondence, communication or consultation, in each case to the extent permitted by applicable law; or
(xix) or • authorize, recommend, propose, announce commit or enter into any agreement, contract, commitment or arrangement agree to do take any of the foregoingforegoing actions.
Appears in 1 contract
Samples: Offer to Purchase (Lilly Eli & Co)
Conduct of Business Pending the Merger. 4.1 SECTION 5.1 Conduct of Business of the Company Pending the Merger.
(a) . The Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required permitted by this Agreement or as set forth in Section 5.1 of the Company Disclosure Letter, until the Effective Time, unless the Parent shall otherwise consent agree in writingwriting prior to the taking of any action otherwise prohibited by the terms of this Section 5.1, which consent shall not be unreasonably withheld, each of the Company shall, and its Subsidiaries:
(i) shall cause each Company Subsidiary to, conduct its operations and business only in the ordinary and usual course of business, business and consistent with past practice; (ii) shall not take any actionpractice and, or fail to take any actionthe extent consistent therewith, except with no less diligence and effort than would be applied in the ordinary course absence of businessthis Agreement, consistent with past practice; and (iii) shall use its reasonable best efforts seek to preserve intact its business organization, properties and assetsorganizations' goodwill, keep available the services of their officersits present officers and key employees, employees and consultants preserve the goodwill and business relationships with suppliers, distributors, customers and others having business relationships with it, with the intent that such goodwill and ongoing business relationships shall be unimpaired in all material respects at the Effective Time. The Company agrees that it will maintain its cash management policies in effect all Company Material Contracts. By way of amplification and not limitation, except as expressly permitted by this Agreement, neither on the Company nor any of its Subsidiaries shall , during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except date hereof in the ordinary course of business consistent with past practicepractice and that it will continue to maintain insurance of the types and in the amounts in effect on the date hereof as long as such insurance is available to the Company on commercially reasonable terms, including at comparable rates. Without limiting the generality of the foregoing, and except as otherwise expressly permitted by this Agreement or as set forth in Section 5.1 of the Company Disclosure Letter, prior to the Effective Time, without the prior written consent of the Parent, the Company will not, and will cause each Company Subsidiary not to:
(a) except to the extent required by Law or the rules and regulations of the NYSE, amend or otherwise change the certificate of incorporation or bylaws of the Company;
(vb) declareissue or authorize or propose the issuance of, set aside sell, pledge or pay dispose of, grant or otherwise create, or agree to issue or authorize or propose the issuance, sale, pledge or disposition of, grant or otherwise create any dividend or other distribution (whether in cash, stock or other securities or propertyadditional shares of, or any combination thereof) in respect of options to acquire any of shares of, its capital stock or any debt or equity securities convertible into or exchangeable for such capital stock or, except as otherwise agreed to by Parent or except pursuant to their terms in effect on the date hereof, accelerate the vesting schedule of or make any other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend modification to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose terms of any Company Intellectual PropertyStock Option outstanding on the date thereof, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than (i) any such issuance pursuant to the exercise of Company Stock Options granted prior to the date hereof under the Company Option Plans or the agreements pursuant to which certain Company Stock Options were issued, in accordance with their respective terms as in effect on the date hereof, (ii) the issuance of shares of capital stock of a Company Subsidiary to the Company or any wholly owned Company Subsidiary, (iii) the issuance in the ordinary course of business consistent with past practicepractice to persons other than directors or executive officers of the Company of Options to purchase in the aggregate up to 75,000 shares of Company Common Stock pursuant to the Company Option Plans as in effect on the date hereof or (iv) the issuance of shares of Company Common Stock in connection with acquisitions permitted by Section 5.1(h);
(viiic) purchase, redeem or otherwise acquire or retire, or offer to purchase, redeem or otherwise acquire or retire, (by merger, consolidation, acquisition of stock or assets or otherwisei) any corporationshares of its capital stock (including any Options with respect to its capital stock and any security convertible or exchangeable into its capital stock), limited liability companyother than transactions between the Company and its wholly owned Subsidiaries, partnership, joint venture or other business organization or division thereof(ii) any long-term debt;
(ixd) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to, any of its capital stock, except dividends declared and paid by a wholly owned Company Subsidiary or subdivide, reclassify, recapitalize, split, combine or exchange any of its shares of capital stock;
(e) incur or become contingently liable with respect to any indebtedness for borrowed money or guarantee any such indebtedness or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreementsecurities;
(xf) authorize any capital expenditures in excess of $175,000 in the aggregate;
except as may be required by applicable Law, or as contemplated by this Agreement, (xi) take or permit to be taken any action to: (Ai) increase the compensation payable or to become payable to, or enter into any employment agreement with any of its executive officers or employees, except for increases in salary or wages except, with respect to any such executive officer in accordance with agreements entered into prior the terms of any such agreement, or with respect to the date of this Agreement or otherwise any other employees in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (Cii) grant any severance or termination pay toto any employee (other than an executive officer) of the Company or any Company Subsidiary, except in the ordinary course of business or pursuant to practices listed in Section 3.11 of the Company Disclosure Letter or to any executive officer or director, except as provided in any agreement with such executive officer or director; (iii) enter into any employment or severance agreement withwith any employee (other than an executive officer), except in the ordinary course of business or pursuant to practices listed in Section 3.11 of the Company Disclosure Letter or with any executive officer or director, except as provided in any agreement with such executive officer or director; or (iv) establish, adopt, enter into, terminate, withdraw from or amend or take action to accelerate any rights or benefits under any collective bargaining agreement, any stock option plan, any employee benefit plan, parachute arrangement or policy;
(g) take any action, including making any change in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including Tax accounting policies, procedures and elections relating to Taxes), except as may be required by GAAP, or settle any material Audit or, except as required by Law, amend in accordance any material respect any material Tax Return; PROVIDED, that, in any such case the Company shall consult with agreements entered into before Parent prior to taking any such action that it reasonably believes is required by GAAP or applicable Law;
(h) acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the date assets of, or by any other manner, any business or any corporation, partnership, association or other business entity, involving purchase prices for all transactions that, in the aggregate, are in excess of this $10.0 million;
(i) mortgage or otherwise encumber or subject to any Lien, or sell, lease, license, transfer or otherwise dispose of, any of its properties or assets, other than encumbrances and Liens that are incurred in the ordinary course of business and consistent with past practice and sales, leases, licenses, transfers and dispositions of properties and assets in the ordinary course of business and consistent with past practice;
(i) extend or otherwise amend or waive any rights under any Material Distribution Agreement or (ii) extend or otherwise amend on terms less favorable to the Company or waive any rights under any Contract if, but only with respect to this clause (ii), such extensions or amendments, individually or in the aggregate, would be or would reasonably be expected to be materially adverse to the business of the Company and the Company Subsidiaries taken as a whole;
(k) take any action that would reasonably be expected to result in the conditions contained in Section 7.2(a) or 7.2(b) not to be satisfied;
(l) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any Company Subsidiaries (other than the Merger);
(m) alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any Company Subsidiary;
(n) except as set forth in Section 5.1 of the Company Disclosure Letter, authorize any new development, production or distribution projects or capital expenditures or similar expenditures which, individually, is in excess of $50,000 or, in the aggregate, are in excess of $1,000,000;
(i) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) other than in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; practices, or (Eii) establishwaive the benefits of, adopt, enter into or amend agree to modify in any material respect manner any bonusconfidentiality, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance standstill or other plan, trust, fund, policy similar agreement to which the Company or arrangement for any Company Subsidiary is a party with any third party which relates to the benefit of any of its directors, officers Company Common Stock or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect a transaction having effects substantially similar to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiiip) make any Tax election or settle or compromise any material federalpending or threatened suit, stateaction or claim relating to the Transactions contemplated hereby, local without Parent's prior written consent, which will not be unreasonably withheld, delayed or foreign Tax liability, or agree to an extension of a statute of limitations with respect theretoconditioned;
(xivq) other than with respect to the Atari litigation set forth in enter into any agreement or arrangement that materially limits or otherwise restricts the Company Disclosure Schedulesor any Company Subsidiary or any successor thereto, payor that would, dischargeafter the Effective Time, satisfy limit or settle restrict the Surviving Corporation and its affiliates (including Parent) or any material litigation successor thereto, from engaging or waive, assign competing in any line of business or release in any rights or claims with respect theretogeographic area, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made consistent with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rightspast practices;
(xvr) fail make any loan to maintain or other investment in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapseperson which, in each case without simultaneously securing replacement insurance policies which will be the aggregate, is in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any excess of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date$500,000; or
(xviiis) authorizeauthorize any of, recommendor commit or agree to take any of, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2foregoing actions.
4.2 SECTION 5.2 Conduct of Business of the Parent Pending the Merger.
(a) The Parent covenants and agrees that. Prior to the Effective Time, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company, the Parent will not, and will cause each Parent Subsidiary not to:
(ia) except to the extent required by Law or the rules and regulations of NYSE, amend its Certificate certificate of Incorporation, Bylaws incorporation or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwisebylaws in any manner that would be materially adverse to the holders of Parent Common Stock;
(iib) issuepurchase, sellredeem or otherwise acquire or retire, transferor offer to purchase, pledgeredeem or otherwise acquire or retire, dispose any shares of or encumber its capital stock (other than 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 Parent Subsidiary) in excess of the Parent; or any of publicly announced Parent Common Stock repurchase program currently in effect, except for other transactions between the Parent and its wholly owned Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(vc) declare, set aside aside, make or pay any dividend or other distribution (whether distribution, payable in cash, stock stock, property or other securities or propertyotherwise, or any combination thereof) in with respect of to any of its capital stock stock, other than dividends or other equity interestsdistributions by Parent Subsidiaries;
(vid) splitliquidate or adopt a plan of liquidation, combine or reclassify except for liquidations of any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interestswholly owned Parent Subsidiaries;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvie) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could would reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions contained in Section 7.3(a) or 7.3(b) not to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real propertybe satisfied; or
(xixf) authorizeauthorize any of, recommendor commit or agree to take any of, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingforegoing actions.
Appears in 1 contract
Conduct of Business Pending the Merger. SECTION 4.1 Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between during the period from the date hereof of this Agreement and continuing until the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by termination of this Agreement or the Effective Time, unless Parent shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries:
(i) shall conduct its business only in in, and the Company shall not take any action except in, the ordinary course of business, business and in a manner consistent with past practice; (ii) shall not take any action, or fail to take any action, except practice other than actions taken by the Company in contemplation of the ordinary course of business, consistent with past practiceMerger; and (iii) the Company shall use its all reasonable best commercial efforts to preserve substantially intact its the business organizationorganization of the Company, properties and assets, to keep available the services of their the present officers, employees and consultants of the Company and maintain in effect all to preserve the present relationships of the Company Material Contractswith customers, suppliers and other persons with which the Company has business relations. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, neither the Company nor any of its Subsidiaries shall not, during the Interim Periodperiod from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectlyindirectly do, do or propose to do, any of the following without the prior written consent of Parent:
(ia) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring change the Articles of Incorporation or otherwiseBy-Laws of the Company except pursuant to the Merger Agreement;
(iib) issue, sell, transfer, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or 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 of (including, without limitation, any phantom interest) in the Company or any (except for the issuance of its Subsidiariesshares of Company Common Stock issuable pursuant to that certain stock option agreement for the purchase of 352 shares of Company Common Stock (the "Option"));
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(ivc) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment assets (tangible or other assets, intangible) of the Company except for (i) dispositions of obsolete or worthless assets and (ii) sales of immaterial assets not in excess of $25,000 in the ordinary course of business consistent with past practiceaggregate;
(vi) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or (other equity interests than distributions in respect of S Corporation tax liabilities consistent with past practice), (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(viii) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock (except for the issuance of shares of Company Common Stock issuable pursuant to the Option) or equity interests(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;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiii) acquire (by merger, consolidation, or acquisition of stock or assets or otherwiseassets) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereof;
; (ixii) except in the ordinary course of business and under the Company's revolving line of credit, incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for for, the obligations of any Person, or make any loans, advances or enter into any financial commitmentsperson or, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice, make any loans or advances; (Biii) grant enter into or amend any additional severance material contract or termination pay toagreement (expect with respect to the Deere & Co. consulting services agreement and consistent with the terms as previously discussed with Parent); (iv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $50,000 for the Company; or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(e);
(f) increase the compensation payable or to become payable to its officers or employees, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement withwith any director, any officer or other employee except in accordance with agreements entered into before of the date of this Agreement Company, or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any of its current or former directors, officers or employees, except, in each case, as may be required by law;
(xiig) take any action to change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiiih) make any Tax material tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability, tax liability or agree to an extension of a statute of limitations with respect theretolimitations;
(xivi) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, dischargedischarge or satisfy any claims, satisfy liabilities or settle any material litigation obligations (absolute, accrued, asserted or waiveunasserted, assign contingent or release any rights or claims with respect theretootherwise), other than settlements the payment, discharge or satisfaction in the ordinary course of business that involve only and consistent with past practice of liabilities reflected or reserved against in the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing Financial Statements or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only incurred in the ordinary course of business, business and consistent with past practice; or
(iij) shall not take any actiontake, or fail agree in writing or otherwise to take any actiontake, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
actions described in Sections 4.1 (a) through (i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber any shares of capital stock of any classabove, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) 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 action which would make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and or warranties of the Parent or any of its Subsidiaries set forth Company contained in Article III of this Agreement becoming untrue in any material respect or (B) any of incorrect or prevent the conditions Company from performing or cause the Company not to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingperform its covenants hereunder.
Appears in 1 contract
Samples: Merger Agreement (Registry Inc)
Conduct of Business Pending the Merger. 4.1 Section 4.1. Conduct of Business of by the Company Pending the Merger.
(a) The . Except as expressly contemplated by this Agreement, the Company covenants and agrees that, between during the period from the date hereof of this Agreement and continuing until the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by termination of this Agreement or the Effective Time, unless Parent shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries:
(i) shall conduct its business only in in, and the Company shall not take any action except in, the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except business and in the ordinary course of business, a manner consistent with past practice; and (iii) the Company shall use its all reasonable best efforts to preserve substantially intact its the business organizationorganization of the Company, properties and assets, to keep available the services of their the present officers, employees and consultants of the Company and maintain in effect all to preserve the present relationships of the Company Material Contractswith customers, suppliers and other persons with which the Company has significant business relations. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, neither the Company nor any of its Subsidiaries shall not, during the Interim Periodperiod from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectlyindirectly do, do or agree to do, any of the following without the prior written consent of Parent:
(ia) amend its or otherwise change the Certificate of Incorporation, Bylaws Incorporation or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseby-laws of the Company;
(iib) issue, sell, transfer, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or 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 (except for (i) the issuance of shares of Company Common Stock issuable pursuant to Stock Options which were granted under the Company Stock Option Plans and are outstanding on the date hereof and (ii) grants of Stock Options under the Company Stock Option Plans for the purchase of a maximum of 50,000 shares of Company Common Stock granted to the individuals identified in Section 4.1(b) of the Company or any of its Subsidiaries;Disclosure Schedule).
(iiic) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) indirectly sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, assets of the Company (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practice, (ii) dispositions of obsolete or worthless assets, and (iii) sales of immaterial assets not in excess of $50,000 in the aggregate);
(vi) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests stock, (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(viii) split, combine or reclassify any shares of its capital stock or issue or authorize or propose the issuance of any other securities or equity interests, or issue any other securities property in respect of, in lieu of or in substitution for shares of its capital stock stock, or equity interests(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 provide that upon the exercise or conversion of any such option, warrant or right the holder thereof shall receive cash, or propose to do any of the foregoing;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiii) acquire (by merger, consolidation, or acquisition of stock or assets or otherwiseassets) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereof;
thereof other than those listed on Section 4.1(e) of the Company Disclosure Schedule; (ixii) incur any indebtedness for borrowed money or issue any debt securities securities, or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for for, the obligations of any Person, or make any loans, advances or enter into any financial commitmentsperson or, except in the ordinary course of business and consistent with past practice in amounts not individually or in the aggregate, in excess of $50,000, make any loans or advances; (iii) enter into or amend any material contract or agreement (except as otherwise permitted under any loan or credit agreement to which described on Section 4.1(e) of the Company or any of its Subsidiaries is a party as of the date of this Agreement;
Disclosure Schedule); (xiv) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $175,000 50,000 for the Company; or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(e), except, in each case, in connection with the aggregateexecutive employment and consulting agreements described in Section 4.1(f) of the Company Disclosure Schedule;
(xi) take or permit to be taken any action to: (Af) increase the compensation payable or to become payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to of employees of the date Company who are not officers of this Agreement or otherwise the Company in the ordinary course of business consistent in accordance with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement withwith any director, any officer or other employee of the Company, or, except as described in accordance with agreements entered into before Section 4.1(f) of the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) Company Disclosure Schedule, establish, adopt, enter into or amend in any material respect any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any of its current or former directors, officers or employees, except, in each case, as may be required by law and except, in each case, in connection with the executive employment and consulting agreements described in Section 4.1(f) of the Company Disclosure Schedule;
(xiig) except as may be required as a result of a change in law or in GAAP, take any action to change accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiiih) make any Tax material tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability, tax liability or agree to an extension of a statute of limitations with respect theretolimitations;
(xivi) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, dischargedischarge or satisfy any claims, satisfy liabilities or settle any material litigation obligations (absolute, accrued, asserted or waiveunasserted, assign contingent or release any rights or claims with respect theretootherwise), other than settlements the payment, discharge or satisfaction in the ordinary course of business that involve only and consistent with past practice of liabilities reflected or reserved against in the payment Company's financial statements or incurred in the ordinary course of non-material amounts business and consistent with past practice;
(j) adopt a plan of cash and no admission being made with respect complete or partial liquidation, dissolution, merger, consolidation, restructuring, or other reorganization; or
(k) take, or agree in writing or otherwise to take, any of the actions described in Sections 4.1 (Aa) any criminal wrongdoing or through (Bj) the invalidity or unenforceability ofabove, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies action which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) would make any of the representations and or warranties of the Company set forth contained in Article II of this Agreement becoming untrue or incorrect in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless prevent the Company shall otherwise consent in writing, which consent shall from performing or cause the Company not be unreasonably withheld, the Parent: (i) shall conduct to perform its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingcovenants hereunder.
Appears in 1 contract
Samples: Merger Agreement (HMSR Inc)
Conduct of Business Pending the Merger. 4.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time Except as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by this Agreement, during the period from the date of this Agreement or unless Parent through the Effective Time, the Company shall, and shall otherwise consent in writing, which consent shall not be unreasonably withheld, cause each of the Company and its Subsidiaries:
(i) shall Subsidiaries to, conduct its business only in the ordinary course of business, its business consistent with past practice; (ii) shall not take any actionpractice and in compliance with all material applicable Laws and all material governmental authorizations, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its present business organization, properties maintain in effect all of its foreign, federal, state and assetslocal licenses, permits, consents, franchises, approvals and authorizations, keep available the services of their officersits directors, officers and employees and consultants maintain satisfactory relationships with its customers, lenders, suppliers and maintain in effect all Company Material Contractsothers having material business relationships with it. By way Without limiting the generality of amplification the foregoing and not limitationto the fullest extent permitted by applicable Law, from the date of this Agreement until the Effective Time, except as expressly permitted otherwise required by this Agreement, neither Agreement or as set forth in Section 4.1 of the Company nor Letter, the Company shall not, and shall not permit any of its Subsidiaries shall to, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent:
(i) amend its Certificate of Incorporation, Bylaws or (A) other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber any shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind than regularly scheduled dividends with respect to acquire any shares of capital stock, or any other ownership interest of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business Series B Preferred Stock consistent with the Company’s past practice;
(v) practice with respect to payment date and amount, declare, set aside or pay any dividend dividends on, or make any other distribution distributions (whether in cash, stock or other securities or propertystock, property or any combination thereof) in respect of of, any shares of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend securities, or otherwise make any payments to its stockholders in their capacity as such other than dividends or distributions by Subsidiaries to other Subsidiaries or to the Company);
, (viB) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, or issue authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities other than the cancellation of Company Stock Options in connection with the exercise thereof or pursuant to the Rights Agreement;
(ii) (A) issue, deliver, sell, pledge, dispose of or otherwise encumber, or authorize the issuance, delivery, sale, pledge, disposal or encumbrance of, any Company Securities or Company Subsidiary Securities, other than (1) the issuance of shares of Company Common Stock upon the exercise of Company Stock Options that are outstanding on the date of this Agreement in accordance with the terms of those options on the date of this Agreement and (2) issuances pursuant to the Rights Agreement or (B) amend any term of any Company Security or any Company Subsidiary Security (in each case, whether by merger, consolidation or otherwise);
(iii) amend its charter or by-laws or other comparable charter or organizational documents (whether by merger, consolidation or otherwise);
(iv) (A) acquire or agree to acquire, (including by merger, consolidation or acquisition of stock or equity interestsassets) any interest in any business or any corporation, limited liability company, partnership, association or other business organization or division thereof or any material amount of assets from any other Person (other than purchases of inventory in the ordinary course of business or in accordance with Section 4.1(a)(x)), (B) merge or consolidate with any other Person or (C) adopt a plan of complete or partial liquidation, dissolution, recapitalization or restructuring;
(v) sell, lease, license, mortgage, encumber or otherwise dispose of any Subsidiary or any material amount of securities, properties or assets, other than the sale of inventory or obsolete equipment in the ordinary course of business consistent with past practice or pursuant to existing Contracts or commitments disclosed in Section 4.1 of the Company Letter;
(vi) (A) create, incur, assume, suffer to exist or otherwise be liable with respect to any indebtedness for borrowed money or guarantees thereof other than in the ordinary course of business on terms consistent with past practices in an amount not to exceed $100,000 in the aggregate, provided that all such indebtedness for borrowed money must be prepayable at any time by the Company without penalty or premium, or (B) make any loan, advance, investment or capital contribution to, or other investment in, either by purchase of stock or securities, contributions to capital, property transfers, or purchase of any property or assets of any Person, other than loans, advances, investments and capital contributions to or in its wholly-owned Subsidiaries made in the ordinary course of business consistent with past practices and other than advances of expenses to employees and consultants in the ordinary course of business;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, (A) grant or otherwise dispose increase any severance or termination pay to (or amend any existing arrangement with) any of their respective directors, officers or employees other than as required pursuant to existing Company Plans, (B) increase benefits payable under any Company Intellectual Propertyseverance or termination pay policies or employment agreements existing as of the date of this Agreement, (C) enter into any employment, consulting, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any of their respective directors, officers or employees, or (D) establish, adopt or amend (except as required by applicable Law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, severance, compensation, stock option, restricted stock or modify other benefit plan or arrangement covering any of their respective directors, officers or employees, other than benefit arrangements (other than collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, severance, compensation, stock option, restricted stock plans or arrangements) with employees in any material respect any existing agreements with respect the ordinary course of business;
(viii) increase the compensation, bonus or other benefits payable or to any Company Intellectual Property become payable to its directors, executives or employees, other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereofpractice as to timing and amount;
(ix) incur transfer or agree to transfer any indebtedness employee from working for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as (other than to the Company or any of its Subsidiaries) or induce any employee to resign such employee’s employment with the date Company or any of this Agreementits Subsidiaries;
(x) authorize incur any capital expenditures or any obligations or liabilities in respect thereof, other than (i) expenditures with respect to commitments in existence on the date of this Agreement which, in the case of material commitments in an amount in excess of $175,000 25,000, are set forth in Section 4.1(a)(x) of the Company Letter, or (ii) in an amount in excess of $100,000 individually or $250,000 in the aggregate;
(xi) take create or permit to be taken incur any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise Lien on any material asset other than any immaterial Lien incurred in the ordinary course of business consistent with past practice; practices;
(Bxii) grant any additional severance or termination pay to, or (A) enter into any employment Contract that would have been a Company Material Contract were the Company or severance agreements with, any of its officers; (C) grant any severance Subsidiaries a party or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before subject thereto on the date of this Agreement other than in the ordinary course consistent with past practices or otherwise (B) terminate or amend, in any material respect which would reasonably be expected to be detrimental to the Company or any of its Subsidiaries, any such Contract or any Company Material Contract or waive any material right thereunder;
(xiii) terminate, renew, suspend, abrogate, amend or modify in any material respect any Company Permit, other than renewals, amendments or modifications in the ordinary course of business;
(xiv) make any change in any method of accounting or accounting principles or practice, except for any such change required by reason of a concurrent change in GAAP or Regulation S-X under the Exchange Act, as approved by the Company’s independent public accountants;
(xv) settle, or offer or propose to settle, (A) any litigation, investigation, arbitration, proceeding or other claim involving or against the Company or any of its Subsidiaries that is material to the Company and its Subsidiaries, taken as a whole or involving a payment by the Company or its Subsidiaries in excess of $100,000, (B) any stockholder litigation or dispute against the Company or any of its officers or directors, or (C) any litigation, arbitration, proceeding or dispute that relates to the Transactions;
(xvi) grant any license with respect to Intellectual Property of the Company other than non-exclusive licenses granted in the ordinary course of business consistent with past practice; (D) enter into practices or take any collective bargaining agreement; action or (E) establish, adopt, enter into omit to take any action or amend in make any filing or pay any fee that would reasonably be expected to cause any material respect any bonusIntellectual Property of the Company used or held for use in its business to expire or become invalidated, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance abandoned or other plan, trust, fund, policy or arrangement for dedicated to the benefit of any of its directors, officers or employeespublic domain;
(xiixvii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, dischargedischarge or satisfy any claims, satisfy liabilities or settle any material litigation obligations (absolute, accrued, asserted or waiveunasserted, assign contingent or release any rights or claims with respect theretootherwise), other than settlements the payment, discharge or satisfaction, in the ordinary course of business that involve only and consistent with past practice, of liabilities and obligations reflected or reserved against in the payment financial statements of non-material amounts the Company or incurred in the ordinary course of cash business and no admission being made consistent with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rightspast practice;
(xvxviii) fail to use reasonable efforts to maintain in full force and effect all existing material insurance policies currently in effect, or permit any of comparable replacement policies to the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially extent available for a similar to or greater than under the prior insurance policiesreasonable cost;
(xvixix) take any action that (without regard to would make any action taken, representation or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties warranty of the Company set forth in Article II of this Agreement becoming untrue hereunder inaccurate in any material respect at, or as of any time before, the Effective Time or would materially delay the Closing;
(xx) except as required by Law, (A) make any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement or adopt any material accounting method that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in settle or resolve any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseTax controversy;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (Dxxi) enter into any collective bargaining agreement; lease or sublease of real property (Ewhether as lessor, sublessor, lessee or sublessee) establishor change, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action terminate or fail to take exercise any reasonable action permitted by this Agreement if such action or failure right to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend renew any lease with respect to or sublease of real property; or
(xixxxii) authorizeagree, recommend, propose, announce resolve or enter into any agreement, contract, commitment or arrangement commit to do any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Merger. Section 4.1 Conduct of Business of by the Company Companies Pending the Merger.
(a) The . During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, each Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by this Agreement or unless Parent shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, each of the such Company and its Subsidiaries:
(i) shall conduct its business only in, and such Company shall not take any action except in, the ordinary course of business; and such Company shall use reasonable commercial efforts to (i) preserve substantially intact its business organization, (ii) pay its trade payables and other liabilities in accordance with their terms as they became due, (iii) collect its receivables and other claims in full in accordance with their terms, as they become due, (iv) keep available the services of each of its present officers, employees and consultants, (v) take all reasonable action in the ordinary course of businessbusiness necessary to prevent the loss, consistent with past practice; (ii) shall not take cancellation, abandonment forfeiture or expiration of any actionCompany Intellectual Property, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iiivi) shall use preserve each of its reasonable best efforts to preserve intact its present relationships with customers, suppliers and other persons with which such Company has significant business organization, properties and assets, keep available the services of their officers, employees and consultants and maintain in effect all Company Material Contractsrelations. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, neither of the Company nor any of its Subsidiaries shall Companies shall, during the Interim Periodperiod from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectlyindirectly do, do or propose to do, any of the following without the prior written consent of Parent:
(ia) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring change its Articles of Incorporation or otherwiseBy-Laws;
(iib) issue, sell, transfer, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of its capital stock of any class, or any options, warrants, convertible securities or other rights of any kind (including Stock Purchase Rights) to acquire any shares of its capital stock, or any other ownership interest (including, without limitation, any phantom interest) of either of the Company or any of its SubsidiariesCompanies;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(ivc) sell, lease, assign, transfer, pledge, dispose of or encumber any material propertiesof its assets (whether real, facilities, equipment personal or other assets, intellectual property) (except for (i) sales of assets in the ordinary course of business consistent with past practice;business; and (ii) dispositions of obsolete or worthless assets).
(vi) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests stock, (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(viii) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests(iii) amend the terms of, repurchase, redeem or otherwise acquire for value, any of its securities, or propose to do any of the foregoing;
(viie) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant sublicense or otherwise dispose of any Company Intellectual PropertyProperty Rights, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property Rights or Third Party Intellectual Property Rights, other than nonexclusive licenses in the ordinary course of business consistent with past practicebusiness;
(viiii) acquire (by merger, consolidation, or acquisition of stock or assets or otherwiseassets) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereof;
; (ixii) incur any indebtedness for borrowed money or representing the deferred purchase price of any property or assets or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for for, the obligations of any Personperson, or make any loans, loans or advances to or enter into investments in any financial commitmentsperson, except in the ordinary course of business and as business; (iii) create, incur, assume or suffer to exist, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind or nature upon its property or assets, income or profits, whether now owned or hereafter acquired; (iv) assume, guarantee, endorse or otherwise permitted under in anyway be or become responsible or liable for, directly or indirectly, any loan contingent obligation; (v) enter into or credit amend any contract or agreement to which other than in the Company or any ordinary course of its Subsidiaries is a party as of the date of this Agreement;
business; (xvi) authorize any capital expenditures or purchase of fixed assets which are, in the aggregate, in excess of $175,000 in 10,000 for the aggregateCompanies, taken as a whole; (vii) enter into any agreement or become liable under any agreement for the lease, hire or use of any real or personal property; or (viii) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(f);
(xi) take or permit to be taken any action to: (Ag) increase the compensation payable or to its become payable to any of their officers or employees, employees (except for such increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise as may be set forth in the ordinary course employment agreements for each of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (the Holders attached hereto as Exhibits A-C) or grant any severance or termination pay to, or enter into any employment or severance agreement with, any director, officer or other employee except in accordance with agreements entered into before of either of the date of this Agreement Companies, or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employeesEmployee Plan;
(xiih) take any action, other than as required by GAAP, to change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiiii) make any material Tax election inconsistent with past practices or settle or compromise any material material, federal, state, local or foreign Tax liability, tax liability or agree to an extension of a statute of limitations with respect theretofor any assessment of any Tax, except to the extent the amount of any such settlement has been reserved for on the Balance Sheet of such Company;
(xivj) pay, discharge or satisfy any principal of any debt with a maturity of more than one year, for borrowed money or for the deferred purchase price of property or services, except at the stated maturity of such debt or as required by mandatory prepayment provisions relating thereto (subject to any subordination provisions applicable thereto); or amend any provision pertaining to the subordination or the terms of payment of any debt;
(k) pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) other than debt with respect to a maturity of more than one year for borrowed money or for the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy deferred purchase price of property or settle any material litigation or waive, assign or release any rights or claims with respect theretoservices, other than settlements the payment, discharge or satisfaction in the ordinary course of business that involve only of liabilities reflected or reserved against on the payment Balance Sheet of non-material amounts such Company or incurred in the ordinary course of cash and no admission being made with respect business;
(l) liquidate or dissolve itself (or suffer any liquidation or dissolution); or
(m) take, or agree in writing or otherwise to take, any of the actions described in Sections 4.1(a) through (Al) any criminal wrongdoing or (B) the invalidity or unenforceability ofabove, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies action which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) would make any of the representations and or warranties of the Company set forth contained in Article II 2 of this Agreement becoming untrue or incorrect or prevent either Company from performing or cause either Company not to perform its covenants hereunder or result in any material respect or (B) any of the conditions to the Closing Merger set forth in Article VI of this Agreement herein not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2satisfied.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 SECTION 5.01. Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between the date hereof of this Agreement and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Time, except as expressly required by this Agreement or unless Parent shall otherwise consent agree in writingwriting (requests for which may be made by telephone request to Arthur Bruskin at (631) 962-2000, which consent the businesses of the Company and itx Xxxxxxxxxxxx shaxx xx xxxxxxxxd only in, and the Company and its Subsidiaries shall not be unreasonably withheldtake any action except in, each the ordinary course of business and in a manner consistent with past practice; and the Company shall use its commercially reasonable efforts to preserve substantially intact the business of the Company and its Subsidiaries:
(i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, keep available the services of their the current officers, employees and consultants of the Company and maintain in effect all its Subsidiaries and to preserve the current relationships of the Company Material Contractsand its Subsidiaries with customers, suppliers and other persons with which the Company or any of its Subsidiaries has significant business relations. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, neither the Company nor any of its Subsidiaries shall shall, during between the Interim Perioddate of this Agreement and the Effective Time, directly or indirectly, do do, or propose to do, any of the following without the prior written consent of Parent:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, conditioned or delayed:
(a) issue, sell or contract for the Parent: issuance or sale, of any of the capital stock of the Company or any securities convertible into or exchangeable for shares of capital stock of the Company or any securities, warrants, options or rights to purchase any of the foregoing (iexcept pursuant to the exercise of options currently outstanding under the Company Stock Option Plans and pursuant to the exercise of options to purchase shares of Company Common Stock under the Employee Stock Purchase Plan);
(b) shall conduct amend the terms of the Plans or any outstanding security, option or warrant;
(c) purchase or redeem any shares of capital stock of the Company (except for the acquisition of shares from holders of options in full or partial payment of the exercise price payable by such holder upon exercise of such options to the extent permitted under the terms of such options as in effect on the date hereof);
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock or other securities, property or otherwise, with respect to any of the Company's capital stock;
(e) amend any of the charter documents, bylaws or other organizational documents of the Company or its business only Subsidiaries;
(f) enter into any contract which if entered into prior to the date hereof would be a Material Contract;
(g) incur or guarantee any material indebtedness or incur any other liabilities outside the ordinary course of business;
(h) except as required to comply with applicable Laws or pursuant to the terms of existing plans or policies, adopt or amend any employee benefit plan, enter into any employment contract, settle any employment dispute, pay or agree to pay any severance, special bonus or special remuneration, including but not limited to change of control payments, to any director or employee, or increase the salaries, wage rates or compensation of its directors or, other than in the ordinary course of business, consistent its employees;
(i) enter into any material agreement with past practice; respect to the Company's Intellectual Property or with respect to the Intellectual Property of any third party;
(iij) shall not take make or change a material election in respect of Taxes, amend a Tax Return, adopt or change an accounting method in respect of Taxes, enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement, settle or compromise any actionclaim or assessment in respect of Taxes, or fail consent to take any action, extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes with any Governmental Authority;
(k) acquire an equity interest in any entity;
(l) authorize or make any capital expenditures in excess of $50,000 in the aggregate;
(m) make any loans to any third party;
(n) initiate or participate in any new clinical trials;
(o) make any material changes to personnel or other business policies of the Company;
(p) hire any employees except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xixq) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement agree to do any of the foregoing. Notwithstanding the foregoing, the Company shall be permitted prior to the Effective Time to distribute $250,000 among all of its employees as of the date hereof (other than any employee that is a party to a change of control agreement with the Company), which amount will be allocated between all such employees in amounts to be determined by the CEO of the Company, in consultation with the CEO of the Parent.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 Section 5.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, between . During the period from the date hereof of this Agreement and continuing until the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by termination of this Agreement or unless Parent the Effective Time, the Company agrees as to itself and each of its Subsidiaries, except to the extent that BPW shall otherwise consent in writing, advance in writing (which consent shall not be unreasonably withheld), each or as expressly required or permitted by this Agreement or the Ancillary Agreements (including amendment and restatement of the $150M Revolving Credit Agreement and the concurrent termination of the Support Letters), or as otherwise indicated in Section 5.1 of the Company and its Subsidiaries:
(i) shall conduct Disclosure Schedule, or to the extent required by applicable law or a Governmental Entity of competent jurisdiction, to carry on its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in substantially the ordinary course of business, consistent with past practice; same manner as previously conducted in all material respects and (iii) shall use its commercially reasonable best efforts to preserve intact its present business organization, properties organization and assets, advantageous business relationships and keep available the services of their officers, employees its current officers and consultants employees. Without limiting the generality of the foregoing and maintain in effect all Company Material Contracts. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, neither Agreement or the Ancillary Agreements (including amendment and restatement of the $150M Revolving Credit Agreement and the concurrent termination of the Support Letters) or expressly set forth on Section 5.1 of the Company nor any Disclosure Schedule or the extent required by applicable law or a Governmental Entity of its Subsidiaries shall competent jurisdiction, during the Interim Period, directly or indirectly, do any period from the date of this Agreement and continuing until the earlier of the following termination of this Agreement or the Effective Time, without the prior written consent of ParentBPW (which consent shall not be unreasonably withheld), the Company shall not and shall not permit any of its Subsidiaries to:
(ia) amend adopt or propose any amendment to its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseOrganizational Documents;
(iib) other than grants of Company Stock Rights to new non-executive officer hires in the ordinary course of business consistent with past practice and except as required to consummate the Merger and the Warrant Exchange Offer and the transactions related thereto and to comply with its obligations under this Agreement and the Ancillary Agreements, (i) issue, sellpledge or sell (other than upon exercise of Company Stock Rights outstanding on the date of this Agreement upon payment of the exercise price thereof and withholding of any Taxes required to be withheld), transferor propose or authorize the issuance, pledgepledge or sale of, dispose or grant any Company Stock Rights or other awards with respect to shares of Company Common Stock or encumber make any other agreements with respect to, any of its shares of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest of its securities, (ii) amend, waive or otherwise modify any of the terms of any option, warrant or stock option plan of the Company or any of its Subsidiaries, including the Company Stock Rights and the Company Stock Plans, or authorize cash payments in exchange for any Company Stock Rights granted under any of such plans, or (iii) adopt or implement any stockholder rights plan;
(iiic) redeemdeclare, repurchase set aside or pay any dividend or make any other distribution or payment with respect to any shares of its stock or beneficial interests (including any dividend distribution payable in, or otherwise acquiremake a distribution of, directly or indirectly, any shares of capital stock of any existing or subsequently formed Subsidiary of the Company), except dividends, contributions or distributions made by or to the Company by or from any Subsidiary of the Company;
(d) split, combine, subdivide, reclassify or redeem, purchase or otherwise acquire, or propose to redeem or purchase or otherwise acquire, any shares of its stock or beneficial interests, or any of its other securities;
(e) except pursuant to (x) applicable law or (y) the terms of a Company Employee Plan as in effect on the date hereof, (i) increase in any manner the compensation or benefits payable or to become payable to any of its or its Subsidiaries’ current or former directors, officers or employees (whether from the Company or interest in or securities of any of its Subsidiaries), or pay any amounts or benefits to, or increase any amounts payable to, any such individual not required by any Company Employee Plan, (ii) become a party to, establish, adopt, enter into, materially amend, commence participation in, terminate or commit itself to the adoption of any collective bargaining agreement or Company Employee Plan (or any arrangement which would have been a Company Employee Plan had it been in effect as of the date of this Agreement), (iii) provide any funding for any rabbi trust or similar arrangement or in any other way secure the payment of compensation or benefits under any Company Employee Plan, (iv) accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any Company Employee Plans or (v) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Employee Plan or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable law;
(ivf) sell(i) lease, license, transfer, pledgeexchange or swap, mortgage (including securitizations), or otherwise dispose (whether by way of merger, consolidation, sale of stock or encumber assets, or otherwise) of any material propertiesportion of its properties or Assets, facilitiesincluding the capital stock of Subsidiaries (it being understood that the foregoing shall not prohibit the sale of inventory in the ordinary course of business), equipment except for (A) dispositions of Assets with a fair market value of less than $1,000,000, (B) transactions between any Subsidiary of the Company and the Company or another Subsidiary of the Company or (C) dispositions of excess inventory, property, leases, licenses, or other assetsAssets or Fixtures and Equipment that the Company considers obsolete or unnecessary (including assets and licenses that were previously used by its J. Xxxx business or to support its J. Xxxx business), or (ii) adopt or effect a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(g) except as required under any Material Contracts as in effect as of the date hereof or as expressly contemplated by the Ancillary Agreements, or, to the extent in the ordinary course of business consistent with past practice;
, related to any vendor financing arrangement or existing proprietary charge card arrangements in amounts that do not exceed $5,000,000 in the aggregate, (vi) declareincur or assume any Indebtedness, set aside (ii) assume, guarantee, endorse or pay any dividend otherwise become liable or other distribution responsible (whether in cashdirectly, stock contingently or otherwise) for the obligations of any other securities Person (other than a Company Subsidiary), (iii) make any acquisition of any other Person (other than a Company Subsidiary) or propertybusiness or make or acquire any loans, advances or capital contributions to, or investments in, any combination thereofother Person (other than a Company Subsidiary) in respect of (including advances to employees), except for acquisitions, loans, advances, capital contributions or investments between any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company or another Subsidiary of the Company, or (iv) enter into any “keep well” or other agreement to maintain the financial condition of another entity (other than the Company or any of its Subsidiaries);
(vih) splitmake, combine alter, revoke or reclassify rescind any shares of its capital stock material express or other securities deemed election relating to Taxes, settle or equity interestscompromise any material Action, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any material Tax Return except in each case as required by law, file any income Tax Return that claims a deduction for or otherwise uses a net operating loss, or except as may be required by, or in order to conform to, applicable law, make any change to any of its material methods of reporting income or deductions (including any change to its methods or basis of write-offs of accounts receivable) for federal income Tax purposes from those employed in the preparation of its federal income Tax Return for the taxable year ending December 31, 2008;
(i) fail to maintain its existing agreements material insurance coverage of all types in effect or, in the event any such coverage shall be terminated or lapse, to the extent available at reasonable cost, procure substantially similar substitute insurance policies which in all material respects are in at least such amounts and against such risks as are currently covered by such policies;
(j) make any material change to its methods of accounting as in effect on October 31, 2009 except as required by GAAP or the SEC or applicable law, or take any action, other than usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies, unless required by GAAP or the SEC or applicable law;
(k) enter into or materially amend, terminate or extend any Material Contract, or waive, release, assign or fail to enforce any material rights or claims under any Material Contract, if such Material Contract or any such action or failure to act with respect to a Material Contract would reasonably be expected to impair the ability of the Company Intellectual Property or Merger Sub to perform their respective obligations under this Agreement or any of the Ancillary Agreements or prevent or delay the consummation of the Merger or any of the other transactions contemplated by this Agreement or any of the Ancillary Agreements;
(l) take, or agree to commit to take, any action that is intended to result in any of the conditions set forth in Section 7.1 or Section 7.3 not being satisfied;
(m) except as expressly contemplated by the Ancillary Agreements, engage in any transaction with, or enter into any agreement, arrangement, or understanding with, directly or indirectly, any Affiliate of the Company which involves the transfer of material consideration or has a material financial impact on the Company, other than pursuant to such agreements, arrangements, or understandings as in effect on the date of this Agreement or with respect to inter-company loans and/or transfers in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition practice between any Subsidiary of stock the Company and the Company or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt another Subsidiary of the Company's Subsidiaries entered into in the ordinary course of business; (n) pay or endorse or otherwise as an accommodation become responsible for the obligations of commit to pay any Person, expenses or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement commit to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize make any capital expenditures in excess of $175,000 2,500,000 individually, or $12,500,000 in the aggregate;
aggregate (xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except other than capital expenditures for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance repair or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber any shares maintenance of capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this AgreementAssets);
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 SECTION 5.01. Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between the date hereof of this Agreement and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Time, except as set forth in Section 5.01 of the Company's Disclosure Schedule, or as otherwise expressly required by provided for in this Agreement or Agreement, unless Parent expressly shall otherwise consent in writing, agree (which consent agreement shall not be unreasonably withheldwithheld or delayed) in writing, each of the Company Business shall be conducted only in, and its Subsidiaries:
(i) the Company shall conduct its business only in not take any action except in, the ordinary course of business, business and in a manner consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent all material respects with past practice; and (iii) the Company shall use its reasonable best efforts to preserve intact its business organization, properties and assets, to keep available the services of their the current officers, employees and consultants of the Company and maintain in effect all to preserve the current relationships of the Company Material Contractswith customers, distributors, suppliers, licensors, licensees, contractors and other persons with which the Company has significant business relations and the Company will take no action not authorized hereby which would adversely affect its ability to consummate the Merger or the other transactions contemplated hereby. By way of amplification and not limitation, except as expressly permitted by provided for in this Agreement, neither or as set forth in Section 5.01 of the Company nor any Disclosure Schedule, the Company shall not, between the date of its Subsidiaries shall , during this Agreement and the Interim PeriodEffective Time, directly or indirectlyindirectly do, do or propose to do, any of the following without the prior written consent of Parent, which consent shall not be unreasonably withheld or delayed:
(ia) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring change its Articles of Incorporation or otherwiseBy-laws;
(iib) issue, sell, license, transfer, pledge, dispose of of, grant or encumber encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of capital stock of any classclass of the Company, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or (ii) any assets of the Company, except for sales of assets in the ordinary course of business and in a manner consistent in all material respects with past practice;
(c) set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its Subsidiariescapital stock;
(iiid) reclassify, combine, split, subdivide or redeem, repurchase purchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiariescapital stock;
(ivi) sellacquire (including, transferwithout limitation, pledgeby merger, dispose consolidation or acquisition of stock or encumber assets) any corporation, partnership, limited liability company, other business organization or any division thereof, or any material properties, facilities, equipment amount of assets or securities other assets, except than assets acquired in the ordinary course of business and consistent with past practice;
practices; or (vii) declare, enter into or amend any contract with respect to any matter set aside or pay any dividend or other distribution forth in this subsection (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Companye);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ixi) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse endorse, or otherwise as an accommodation become responsible for for, the obligations of any Personperson, or make any loansloans or advances, advances or except, in the case of indebtedness for borrowed moneys, in the ordinary course of business and consistent in all material respects with past practice but in no event in an amount in excess of $500,000 in the aggregate; (ii) authorize capital expenditures which are, in the aggregate, in excess of $500,000 for the Company; (iii) enter into or amend any financial commitmentscontract, agreement, commitment or arrangement material to the Company; or (iv) incur any liabilities except for liabilities which, individually or in the aggregate, would not have a Company Material Adverse Effect;
(g) increase (except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(xconsistent in all material respects with past practice) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable or to become payable to its officers or employeesemployees generally, or except for increases in salary or wages in accordance with agreements entered into prior respect to annual bonuses approved at the date Company's Board of this Agreement or otherwise in Directors meeting held on December 9, 1997 and specified on Section 5.01 of the ordinary course of business Company's Disclosure Schedule, grant any bonus, severance (except as consistent with past practice; (Bpractice and not in excess of three months base salary without the written consent of Parent) grant any additional severance or termination pay to, or enter into any employment or severance agreements withemployment, its officers; (C) grant any severance or termination pay to, or enter into any employment consulting or severance agreement withwith any person, or pay or agree to pay any employee pension, retirement or other benefit (except in accordance with agreements entered into before the date as required under agreements, plans or other arrangements existing as of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) September 30, 1997), establish, adopt, enter into into, become obligated under or amend in any material respect any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, terminationtermi- nation, severance severance, welfare, multiemployer, employee benefit or other plan, agreement, trust, fund, policy or arrangement for the benefit of any of its directorspast or present director, officers officer or employeesemployee;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiiih) make any Tax change in tax accounting methods or make any material tax election or settle or compromise any material federal, state, local or foreign Tax income tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xivi) other than with respect take any action that would or is reasonably likely to result in any of the Atari litigation covenants and agreements set forth in this Article V or in Article VI or any of the Company Disclosure Schedulesconditions set forth in Article VII not being satisfied as of the Closing Date;
(j) knowingly take any action that could reasonably be expected to prevent the Merger from constituting a transaction qualifying under Section 368(a) of the Code; or
(k) except for the payment of reasonable professional fees relating to the Merger or otherwise and reasonable fees to financial advisors (which financial advisory fees have heretofore been disclosed or are otherwise acceptable, to Parent), pay, dischargedischarge or satisfy any claim, satisfy liability or settle any material litigation obligation (absolute, accrued, asserted or waiveunasserted, assign contingent or release any rights or claims with respect theretootherwise) in an amount in excess of $250,000 in the aggregate, other than settlements the payment, discharge or satisfaction, in the ordinary course of business that involve only and consistent in all material respects with past practice, of liabilities reflected or reserved against in the payment Company 1997 Balance Sheet or subsequently incurred in the ordinary course of non-material amounts of cash business and no admission being made consistent with respect to (A) any criminal wrongdoing past practice or (B) collect, or accelerate the invalidity or unenforceability collection of, any amounts owed (including accounts receivable) other than collection in the ordinary course.
(l) except in the ordinary course of business or as otherwise expressly contemplated hereby, grant or acquire any infringement with respect to, material licenses to use any Company Intellectual Property Rights;
(xv) fail to maintain Rights or unpatented inventions set forth in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties 3.11 of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing DateDisclosure Schedule; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless provided that the Company shall otherwise not grant any material licenses to use any material Intellectual Property Rights or unpatented inventions so set forth without the prior written consent in writingof Parent, which consent shall not be unreasonably withheld;
(m) except as otherwise expressly contemplated hereby, enter into any other agreements, commitments or contracts, except agreements, commitments or contracts for the Parent: (i) shall conduct its business only purchase, sale or lease of goods or services in the ordinary course of businessbusiness and consistent in all material respects with past practice;
(n) authorize, recommend, propose or announce an intention to authorize, recommend or propose, or enter into any agreement in principle or an agreement with any other person with respect to, any plan of liquidation or dissolution, any disposition of a material amount of assets or securities or any material change in the Company's capitalization, or any entry into a material contract or any amendment or modification of any material contract or any release or relinquishment of any material contract rights not in the ordinary course of business and consistent with past practice; practice except as expressly contemplated by this Agreement;
(iio) shall not take permit any actioninsurance policy naming it as a beneficiary or a loss payee to be cancelled, terminated or fail to take any actionmaterially altered, except in the ordinary course of business, business and consistent in all material respects with past practice and following written notice to Parent;
(p) maintain its books and records in a manner not in the ordinary course of business and substantially consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (Dq) enter into any collective bargaining agreement; or (E) establishhedging, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance derivative or other plansimilar transaction;
(r) institute any change in its accounting methods, trust, fund, policy principles or arrangement for the benefit of practices or revalue any of its directorsrespective assets, officers or employees;
(xi) change any accounting policies or procedures (including, including without limitation, procedures with respect to reserves, revenue recognition, payments writing down the value of inventory or writing off notes or accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
receivables; (xiis) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Elan Corp PLC)
Conduct of Business Pending the Merger. 4.1 SECTION 5.01 Conduct of Business of by the Company Pending the Merger.
. During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, (a) The the business of the Company covenants and agrees thatshall be conducted only in, between the date hereof and the earlier to occur Company shall not take any action except in, the ordinary course of the Effective Time or such earlier time as this Agreement is terminated business, and in accordance in all material respects with Article VII all applicable laws, rules and regulations, and (such period being hereinafter referred b) the Company agrees (except to as the "Interim Period"), except as expressly required by this Agreement or unless extent that Parent shall otherwise consent in writing), which consent to use all reasonable efforts consistent with past practices and policies to keep available the services of its present officers and key employees and consultants and preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, to the end that its goodwill and ongoing businesses would be unimpaired, in any material respect, at the Effective Time. The Company shall promptly notify Parent of any event or occurrence not be unreasonably withheld, each of the Company and its Subsidiaries:
(i) shall conduct its business only in the ordinary course of businessbusiness of the Company and shall notify Parent of any change in the operation of the Company’s business activities and of any governmental or third party complaints, consistent with past practice; (ii) shall not take any actioninvestigations or proceedings if such complaint, change, investigation, or fail hearing would have, or would reasonably be expected to take any actionhave, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, keep available the services of their officers, employees and consultants and maintain in effect all a Company Material ContractsAdverse Effect or would be material to any party’s ability to consummate the transactions contemplated by the Transaction Documents. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, neither Agreement or as set forth in Section 5.01 of the Company nor any Disclosure Schedule, the Company shall not, between the date of its Subsidiaries shall , during this Agreement and the Interim Period, directly or indirectlyEffective Time, do any of the following without the prior written consent of Parent:
(ia) amend or otherwise change its Certificate of Incorporation, Bylaws Incorporation or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseBylaws;
(iib) issue, sell, transferpledge, dispose of, grant, encumber, authorize or propose the issuance, sale, pledge, dispose disposition, grant or encumbrance of or encumber any shares of its capital stock of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, stock or any other ownership interest (including, without limitation, any phantom interest), of the Company, except pursuant to the terms of options, warrants or preferred stock outstanding on the date of this Agreement and except for grants of options to purchase up to 100,000 shares of Company or any of its SubsidiariesStock pursuant to the Stock Plan, each in accordance with past practices;
(iiic) redeemsell, repurchase lease, license, pledge, grant, encumber or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities dispose of any of its Subsidiaries;
(iv) sellproperties or assets which are material, transferindividually or in the aggregate, pledge, dispose of or encumber any material properties, facilities, equipment or other assetsto its business, except in the ordinary course of business business, consistent with past practice;
(vd) declare, set aside aside, make or pay any dividend or other distribution (whether distribution, payable in cash, stock stock, property or other securities otherwise, with respect to any of its capital stock;
(e) split, combine, subdivide, redeem or property, or any combination thereof) in respect of reclassify any of its capital stock or other equity interests (except that a wholly owned Subsidiary issue or authorize the issuance of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or purchase or otherwise acquire, directly or indirectly, any shares of its capital stock or equity interestsexcept from former employees, directors and consultants in accordance with agreements existing as of the date hereof providing for the repurchase of shares in connection with any termination of service by such party;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiif) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any interest or any assets or otherwise) in any corporation, limited liability company, partnership, joint venture or other business organization or any division thereof;
(ixg) incur incur, other than to Parent or any Company Stockholders, any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse endorse, or otherwise as an accommodation become responsible for for, the obligations of any Personperson, or make any loansloans or advances;
(h) authorize any capital expenditure in excess of $100,000, advances or in the aggregate;
(i) enter into any financial commitmentslease or contract for the purchase or sale of any property, real or personal, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreementbusiness, consistent with past practice;
(xj) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take increase, or permit agree to be taken any action to: (A) increase increase, the compensation payable payable, or to become payable, to its directors, officers or employees or grant any bonuses to its officers, directors or employees, except for increases in salary or wages grants in accordance with agreements entered into prior to the date past practice in salaries or wages of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay toits employees who are not its officers, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into or modify any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement its directors, officers or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; other employees, or (E) establish, adopt, enter into or amend in any material respect any collective bargaining, bonus, profit sharing, thrift, compensation, stock optionoption (other than as expressly contemplated in Section 2.05 above), restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other planPlan, agreement, trust, fund, policy or arrangement for the benefit of any director, officer or employee; provided, however, that the foregoing provisions of its directors, officers or employeesthis subsection shall not apply to any amendments to employee benefit plans described in Section 3(3) of ERISA that may be required by Law;
(xiik) accelerate, amend or change the period of exercisability or the vesting schedule of restricted stock or Outstanding Company Options granted under any accounting policies option plan, employee stock plan or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, other agreement or authorize cash payments in exchange for any Outstanding Company Options granted under any of accounts payable and collection of accounts receivable), unless such plans except as specifically required by statutory accounting principles the terms of such plans or GAAP any such agreement or any related agreement in connection with effect as of the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension date of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth this Agreement and disclosed in the Company Disclosure Schedules, pay, discharge, satisfy Schedule;
(l) extend any offers of employment to potential employees who would receive cash compensation at a rate of $100,000 per year or settle more or extend any material litigation consulting or waive, assign independent contracting offers that are not cancelable on prior notice of 30 days or release less; or
(m) amend or modify any rights or claims with respect thereto, Material Contract other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made consistent with respect to past practice (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take amend or modify any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract with MOVA or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingAbt Associates Clinical Trials/AACT).
Appears in 1 contract
Samples: Merger Agreement (Mgi Pharma Inc)
Conduct of Business Pending the Merger. 4.1 Section 6.1. Conduct of Business of by the Company Pending the Merger.. Prior to the Effective Time, unless Parent shall otherwise agree in writing, or as set forth on Schedule 6.1 or as otherwise expressly contemplated by this Agreement:
(a) The Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by this Agreement or unless Parent shall otherwise consent in writing, which consent shall not be unreasonably withheld, each of the Company shall, and shall cause its Subsidiaries:
(i) shall Subsidiaries to, conduct its business their respective businesses only in the ordinary and usual course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its their reasonable best efforts to preserve intact its their present business organization, properties and assets, keep available the services of their officerspresent officers and key employees, employees and consultants and maintain in effect all Company Material Contracts. By way preserve the goodwill of amplification and not limitation, except as expressly permitted by this Agreement, neither those having business relationships with them; the Company nor shall not, and shall not permit any of its Subsidiaries shall Subsidiary to, during hire any person to any position as an employee or as a consultant to the Interim Period, directly Company or indirectly, do any a Subsidiary of the following without Company where the prior written consent of Parent:total annual compensation payable to such person, whether in cash or otherwise, would exceed $100,000;
(b) the Company shall not, and shall not permit any Subsidiary to, (i) amend its Certificate of Incorporationtheir respective charters, Bylaws By-laws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issuesplit, sell, transfer, pledge, dispose of combine or encumber reclassify 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 their outstanding capital stock, or any other ownership interest of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether payable in cash, stock or other securities or property, or (iv) directly or indirectly redeem or otherwise acquire any combination thereof) in respect shares of any of its their capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company)stock;
(vic) splitthe Company shall not, combine and shall not permit any Subsidiary to, (i) authorize for issuance, issue or reclassify sell or agree to issue or sell any shares of, or rights or securities of its any kind to acquire, rights or securities convertible into any shares of, their respective capital stock (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), except for the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date of this Agreement, (ii) merge or consolidate with another entity, (iii) acquire or purchase an equity interest in or a substantial portion of the assets of another corporation, partnership or other securities business organization or equity interestsotherwise acquire any material assets outside the ordinary and usual course of business and consistent with past practice or otherwise enter into any material contract, commitment or issue any other securities in respect oftransaction outside the ordinary and usual course of business consistent with past practice, in lieu of or in substitution for shares of its capital stock or equity interests;
(viiiv) except as noted on Schedule 6.1(c)(iv), sell, transfer, lease, license, sublicensewaive, mortgagerelease, pledgetransfer, dispose of, encumber, grant encumber or otherwise dispose of any of its material assets outside the ordinary and usual course of business and consistent with past practice, including any shares the Company Intellectual Propertyholds of HealxxXxxx.xxx, Xxc., (v) incur, assume or prepay any material indebtedness or any other material liabilities other than in the ordinary course of business and consistent with past practice, (vi) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of a material nature any other person other than in the ordinary course of business and consistent with past practice, (vii) make any loans, advances or capital contributions to, or amend investments in, any other person, (viii) authorize or modify make capital expenditures in excess of the amounts currently budgeted therefor, (ix) permit any material respect insurance policy naming the Company as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of business, or (x) enter into any existing agreements contract, agreement, commitment or arrangement with respect to any of the foregoing;
(d) the Company Intellectual Property shall not, and shall not permit any Subsidiary to, (i) adopt, enter into, terminate or amend (except as may be required by applicable law) any Company Plan or other than arrangement for the current or future benefit or welfare of any director, officer or current or former employee, (ii) increase in any manner the compensation or fringe benefits of, or pay any bonus to, any director, officer or employee (except for normal increases in base compensation in the ordinary course of business consistent with past practice), or (iii) take any action to fund or in any other way secure, or to accelerate or otherwise remove restrictions with respect to, the payment of compensation or benefits under any employee plan, agreement, contract, arrangement or other Company Plan (including the Company Stock Options);
(viiie) acquire (by mergerthe Company shall not, consolidationand shall not permit any Subsidiary to, acquisition of stock or assets or otherwise) take any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Personaction with respect to, or make any loansmaterial change in, advances their respective accounting policies or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreementprocedures;
(xf) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to from the date of this Agreement or otherwise in hereof through the ordinary course of business consistent with past practice; (B) grant Effective Time, the Company shall not, and shall not permit any additional severance or termination pay Subsidiary to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign income Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect liability prior to the Atari litigation set forth last day (including extensions) prescribed by law, in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course case of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein , material to the contrarybusiness, Parent's consent shall not be required with respect to any currently proposed financial condition or contemplated business transaction with Take 2.
4.2 Conduct results of Business operations of Parent Pending the Merger.Company; and
(ag) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writingnot, which consent and shall not be unreasonably withheldpermit any Subsidiary to, propose, adopt, approve or implement any Stockholder Rights Plan which could have the Parent: (i) shall conduct its business only in the ordinary course effect of businessrestricting, consistent with past practice; (ii) shall not take any actionprohibiting, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, impeding or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose affecting the consummation of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement or the Voting Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under by the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingrespective parties thereto.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Uici)
Conduct of Business Pending the Merger. 4.1 6.1 Conduct of the Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, between . Between the date hereof of this Agreement and the earlier to occur of (1) the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII and (such period being hereinafter referred 2) the date upon which Purchaser’s designees constitute a majority of the members on the Company Board pursuant to as Section 7.3 (the "Interim Period"“Control Date”), except as expressly required by this Agreement or unless Parent (i) the Company shall, and shall otherwise consent in writingcause the Company Subsidiaries to, which consent shall not be unreasonably withheld, each conduct the businesses of the Company and its Subsidiaries:
(i) shall conduct its business the Company Subsidiaries only in the ordinary course of business, business and in a manner consistent with past practicepractice and in compliance in all material respects with all applicable Laws; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) Company shall use its reasonable best efforts to preserve substantially intact its the business organizationorganization of the Company and the Company Subsidiaries, properties and assets, to keep available the services of their the current officers, employees and consultants of the Company and the Company Subsidiaries and to preserve the current relationships of the Company and the Company Subsidiaries with its customers, suppliers, distributors, licensors, licensees and other persons with which the Company or any of the Company Subsidiaries has business relations; (iii) the Company shall, and shall cause the Company Subsidiaries to, maintain the Company Owned Real Property and Company Leased Real Property in effect all substantially the same condition as the same exist on the date of this Agreement (reasonable wear and tear excepted), (iv) upon reasonable request by Purchaser, the Company Material Contractsshall, or shall cause the Company Subsidiaries to, deliver any written notice necessary to exercise a renewal option with respect to those leases of Company Leased Real Property that require that such notice of renewal be delivered prior to the Effective Time, and (v) the Company shall not, and shall cause the Company Subsidiaries not to, take any action that would adversely affect or delay in any material respect the ability of either Parent or the Company to obtain any necessary approvals of any regulatory agency or other Governmental Authority required for the Transactions. By way of amplification In addition, and not limitationin limitation of the foregoing, except as (x) expressly permitted contemplated by this Agreement, (y) set forth in Section 6.1 of the Disclosure Schedule or (z) as required in compliance with all applicable Laws, neither the Company nor any of its the Company Subsidiaries shall shall, during between the Interim Perioddate of this Agreement and the Effective Time, directly or indirectly, do do, or propose to do, any of the following without the prior written consent of Parent:Parent (which shall not be unreasonably withheld or delayed):
(ia) amend or otherwise change its Certificate of Incorporation, Bylaws Incorporation or other By-laws or equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(iib) issue, sell, transferpledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, dispose of disposition, grant or encumber encumbrance of, any shares of any class of capital stock of the Company or any classof the Company Subsidiaries, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including any phantom interest and including any Company RSUs or voting securities), of the Company or any of its the Company Subsidiaries, except for (i) the issuance in the ordinary course of business of Company Stock Options for the purchase of up to 25,000 Company Shares and Company RSUs for the issuance of up to 10,000 Company Shares for employees hired after the date hereof, (ii) the issuance of Company Shares pursuant to exercises of the Company Stock Options or vesting of Company RSUs outstanding on the date hereof as disclosed in Section 4.3(b) in accordance with the terms of those options or Company RSUs on the date of this Agreement) and (iii) subject to Section 3.7, issuance of Company Shares pursuant to the Company ESPP;
(iiic) transfer, lease, sell, pledge, license, dispose of or encumber any material assets or properties of the Company or any of the Company Subsidiaries, except in the ordinary course of business and in a manner consistent with past practice;
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock (other than dividends or distributions made by a Company Subsidiary to the Company or another Company Subsidiary);
(e) reclassify, combine, split, subdivide or redeem, repurchase or purchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiariescapital stock;
(ivi) sellacquire, transfer, pledge, dispose of directly or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
indirectly (v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (including by merger, consolidation, or acquisition of stock or assets or otherwise) any other business combination), any corporation, limited liability company, partnership, joint venture or other business organization or any division thereof;
thereof or any other business, or any equity interest in any person or any material amount (ixindividually or collectively) of assets; (ii) incur any indebtedness for borrowed money or issue any debt securities securities, or assume, guarantee or endorse, or otherwise become responsible for (contingently or otherwise), the obligations of any person, in the aggregate in excess of $500,000; (iii) make any loans, advances or capital contributions, except for employee loans or advances for travel expenses and extended payment terms for customers, in each case subject to applicable Law and only in the ordinary course of business; (iv) make, authorize, or make any commitment with respect to (A) any single capital expenditure or other expenditure that is, individually, in excess of $500,000 or (B) collectively, in the aggregate for the Company and the Company Subsidiaries taken as a whole in excess of $2,000,000; (v) make or direct to be made any capital investments or equity investments in any entity, other than guarantees investments in any wholly-owned Company Subsidiary; or (vi) enter into or amend any Contract, commitment or arrangement with respect to any matter set forth in this Section 6.1(f);
(g) (i) increase the compensation payable or to become payable (including bonus grants) or increase or accelerate the vesting of bank debt any benefits provided, or pay or award any payment or benefit not required as of the Company's Subsidiaries date hereof by a Plan as existing on the date hereof and disclosed in Section 4.10(a) of the Company Disclosure Schedule, to its directors, officers or employees or other service providers, (ii) grant any severance or termination pay or benefits to, or enter into any employment, severance, retention, change in control, consulting or termination Contract with, any director, officer or other employee or other service providers of the Company or of any Company Subsidiary, subject to sub-Section 6.1(g)(v) below, other than offer letters, employment agreements, or consulting agreements entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business that are terminable at will and as otherwise permitted under any loan or credit agreement without liability to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
Company Subsidiary, (x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (Eiii) establish, adopt, enter into or amend in any material respect any collective bargaining, bonus, profit profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other planContract, trust, fund, policy or arrangement for the benefit of any director, officer or employee or other service providers, (iv) pay or make, or agree to pay or make, any accrual or other arrangement for, or take, or agree to take, any action to fund or secure payment of, any severance pension, indemnification, retirement allowance, or other benefit, or (v) hire, elect or appoint any officer, director or employee holding a position of its directors, officers vice president or employeesabove;
(xih) change except as publicly announced prior to the date hereof, announce, implement or effect any reduction in labor force greater than five percent (5%) of the total Company headcount, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company or any Company Subsidiary, other than routine employee terminations;
(i) enter into a new line of business that (A) is material to the Company and the Company Subsidiaries taken as a whole, or (B) represents a category of revenue that is not discussed in Item 1 of the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2009;
(j) take any action, other than reasonable actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including, without limitation, including procedures with respect to reserves, revenue recognition, payments the payment of accounts payable and collection of accounts receivable, and the revaluation of any assets), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiiik) make or change any election, change an annual accounting period, adopt or change any accounting period, adopt or change any accounting method, file any amended Tax Return, enter into any closing agreement, settle any Tax election claim or settle or compromise any material federal, state, local or foreign Tax liability, or agree assessment relating to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely the Company Subsidiaries, surrender any right to prevent the Merger from qualifying as claim a reorganization within the meaning refund of Section 368(a) Taxes, consent to any extension or waiver of the Codelimitation period applicable to any Tax claim or assessment relating to the Company or any of the Company Subsidiaries, destroy or dispose of any books and records with respect to Tax matters relating to periods beginning before the Effective Time and for which the statute of limitations is still open or under which a record retention agreement is in place with a Governmental Authority if such election, adoption, change, amendment, agreement, settlement, surrender, consent, waiver, destruction or disposal would have the effect of materially increasing the Tax liability of the Company or any of the Company Subsidiaries for any period ending after the Effective Time or materially decreasing any Tax attribute of the Company or any of the Company Subsidiaries existing on the Effective Time;
(xviil) take settle, pay, discharge or satisfy any action claim, liability or fail obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), including any litigation, arbitration or other Action, other than (i) the payment, discharge or satisfaction, in the ordinary course of business and consistent with past practice, of liabilities reflected or reserved against in the 2009 Balance Sheet or subsequently incurred in the ordinary course of business and consistent with past practice, (ii) those that involve only the payment or receipt of money (and not the assumption of any liability or obligation, including, the grant to take any reasonable action permitted Third Party of any license, covenant not to xxx, immunity or other right with respect to or under any of the Owned Company Intellectual Property) in an amount less than $500,000; provided, that in connection with such payment the Company shall have received a complete and unconditional release against the Company and the Company Subsidiaries, or (iii) settlements in connection with routine customer audits that involve (x) the receipt of $500,000 or less by the Company and (y) the granting of continued use rights with respect to Company Products or products or services of the Company or any Company Subsidiary;
(m) enter into any Contract or amendment that would be a Company Material Contract, amend or modify in any material respect or consent to the termination of any Company Material Contract, or amend or modify in any material respect, waive or consent to the termination of the Company’s or any Company Subsidiary’s rights thereunder or waive, release, or consent to the termination of any claims or rights of material value to the Company or any Company Subsidiary; provided, however, that for all purposes of this Agreement if Section 6.1(m), the definition of “Material Contract:”
(i) shall not include the category of Contracts referenced in Section 4.17(a)(xvi);
(ii) shall not include Contracts entered into with customers of the Company on terms consistent with the Company’s past contracting practices with similarly situated customers; and
(iii) all references to $500,000 in Section 4.17(a)(i) and Section 4.17(a)(vii) with respect to any customer contracts shall be deemed to refer to $2,000,000;
(n) enter into (i) any material Contract with new or existing suppliers or customers with a term of greater than thirty-six (36) months, (ii) any Contract with existing suppliers or customers other than on terms consistent with the Company’s or the applicable Company Subsidiary’s existing Contracts with such action suppliers or failure customers, as applicable, as disclosed to take action could reasonably be expected Parent prior to result the date hereof, or (iii) any Contract with new suppliers or customers other than on terms that are consistent with the Company’s past contracting practices with similarly situated suppliers or customers, as applicable;
(o) enter into any Contracts (i) under which Company or any Company Subsidiary grants or agrees to grant to any Third Party any assignment, license, covenant, release, immunity or other right with respect to any Intellectual Property or Intellectual Property Rights (other than non-exclusive licenses of Software granted to customers in either the ordinary course of business consistent with Company’s past practice), (ii) under which Company or any Company Subsidiary establishes with any Third Party a joint venture, strategic relationship, or partnership pursuant to which Company agrees to develop or create any Intellectual Property, products or services; (iii) under which Company or any Company Subsidiary agrees to create or develop any Intellectual Property, products, or services with any Third Party that designs, develops, or manufactures or has manufactured microprocessors, microprocessor cores, netbooks, or personal computers; (iv) that will cause or require (or purport to cause or require) the Surviving Corporation or Parent or any of its Affiliates to (A) grant to any Third Party any license, covenant not to xxx, immunity or other right with respect to or under any of the representations and warranties Intellectual Property or Intellectual Property Rights of Parent or any of its Affiliates; or (B) be obligated to pay any royalties or other amounts, or offer any discounts, to any Third Party (other than, with respect to the Surviving Corporation only, in connection with non-exclusive licenses of Software entered into in the ordinary course of business consistent with past practice);
(p) enter into or amend any Contract pursuant to which any other party is granted, or that otherwise constrains or subjects the Company or any Company Subsidiary or Parent or any of its Subsidiaries set forth in Article III to, any non-competition, “most-favored nation”, exclusive marketing or other exclusive rights of this Agreement becoming untrue any type or scope or that otherwise restricts the Company or any Company Subsidiary or, upon completion of the Offer or any other Transaction, Parent or any of its subsidiaries, from engaging or competing in any material respect line of business or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract location; or enter into or extend amend any Contract with respect to joint ventures, partnerships or material strategic alliances; or, other than in the ordinary course of business consistent with past practices, enter into or amend any Contract with respect to future services requirements;
(q) enter into any lease, sublease or license for real property or material operating lease other than the entry into leases with respect to real propertyproperty spaces of less than 8,000 square feet and a term of less than two (2) years;
(r) terminate, cancel, amend or modify any insurance coverage policy maintained by Company or any of the Company Subsidiaries that is not promptly replaced by a comparable amount of insurance coverage;
(s) enter into or amend or otherwise modify any Contract or arrangement with persons that are affiliates or are executive officers or directors of the Company;
(t) commence any material Action;
(u) enter into, participate in, establish or join any new standards-setting organization, university or industry bodies or consortia, or other multi-party special interest groups or activities;
(v) incur any non-employee expense (travel, facilities, other) that was not previously budgeted in the FY 2010 Annual Operating Plan set forth in Section 6.1(v) of the Disclosure Schedule; or
(xixw) authorizeannounce an intention, recommend, propose, announce or enter into any agreement, contract, formal or informal Contract or otherwise make a commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 SECTION 6.1. Conduct of Business of the Company Pending the Merger.
(a) . The Company covenants and agrees that, between the date hereof and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required permitted or contemplated by this Agreement or as set forth in Section 6.1 of the Company Disclosure Letter, until the Effective Time, unless the Parent shall otherwise consent agree in writingwriting prior to the taking of any action otherwise prohibited by the terms of this Section 6.1, which consent shall not be unreasonably withheld, each of the Company shall, and its Subsidiaries:
(i) shall cause REI Barbados to, conduct its operations and business only in the ordinary and usual course of business, business and consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; practice and (iii) shall use its reasonable best efforts to preserve intact its business organizationorganizations' goodwill, properties maintain in effect all existing material qualifications, licenses, permits, approvals and assetsother authorizations, substantially comply with all applicable Laws, keep available the services of their officersits present executive officers and key employees, employees and consultants preserve the goodwill and maintain in effect all Company Material Contractsbusiness relationships with suppliers, distributors, customers and others having business relationships with it. By way Without limiting the generality of amplification the foregoing, and not limitation, except as otherwise expressly permitted by this Agreement, neither Agreement or as set forth in Section 6.1 of the Company nor any of its Subsidiaries shall Disclosure Letter, during prior to the Interim PeriodEffective Time, directly or indirectly, do any of the following without the prior written consent of the Parent, the Company will not, and will cause REI Barbados not to:
(ia) except to the extent required by Law or the rules and regulations of The Nasdaq Stock Market, amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring change the articles of incorporation or otherwisebylaws of the Company;
(iib) issueissue or authorize or propose the issuance of, sell, transferpledge or dispose of, pledgegrant or otherwise create, dispose of or encumber agree to issue or authorize or propose the issuance, sale, pledge or disposition of, grant or otherwise create any additional shares of capital stock of any classof, or any options, warrants, convertible securities or other rights of any kind Options to acquire any shares of of, its capital stock, stock or any other ownership interest debt or equity securities convertible into or exchangeable for such capital stock or accelerate any right to convert or exchange or acquire any securities of the Company for any such shares or ownership interest or take any action to cause to be exercisable any otherwise unexercisable option under any Company Stock Option granted under any Company Option Plan, other than (i) the issuance of 1,010,101 shares of Company Common Stock upon the conversion of the Convertible Notes, (ii) any such issuance pursuant to the exercise of Company Stock Options granted prior to the date hereof under the Company Option Plans, in accordance with their respective terms as in effect on the date hereof, (iii) the issuance of shares of Company Common Stock pursuant to the Company ESPP in accordance with its terms as in effect on the date hereof in accordance with Section 3.2(g).
(c) purchase, redeem or otherwise acquire or retire, or offer to purchase, redeem or otherwise acquire or retire, (i) any shares of its Subsidiariescapital stock (including any Options with respect to its capital stock and any security convertible or exchangeable into its capital stock), or (ii) any long-term debt;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(vd) declare, set aside aside, make or pay any dividend or other distribution (whether distribution, payable in cash, stock stock, property or other securities or propertyotherwise, or any combination thereof) in with respect of to any of its capital stock stock, or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) subdivide, reclassify, recapitalize, split, combine or reclassify exchange any of its shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of otherwise change its capital stock or equity interestscapitalization as it exists on the date hereof;
(viie) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant incur or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements become contingently liable with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or the deferred purchase price for property or services or pursuant to any capital lease or other financing or guarantee any such indebtedness or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreementsecurities;
(xf) authorize any capital expenditures in excess of $175,000 in the aggregate;
except as may be required by applicable Laws, or as contemplated by this Agreement, (xi) take or permit to be taken any action to: (Ai) increase the compensation payable or to become payable to, or enter into any employment agreement with, its executive officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise non-executive officers in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (Cii) grant any severance or termination pay to any director, executive officer or employee of the Company or REI Barbados, except pursuant to existing Company Benefit Plans; (iii) enter into any severance agreement with any director, executive officer or employee; or (iv) except as required by applicable Laws, establish, adopt, enter into, terminate, withdraw from or amend in any material respect or take action to accelerate or waive (or otherwise diminish) any rights or benefits under any Company Benefit Plan or any other plan, program or arrangement, or any material employment policy;
(g) take any action, other than reasonable actions in the ordinary course of business and consistent with past practice, with respect to accounting policies or procedures (including Tax accounting policies, procedures and elections relating to Taxes that would apply to the Company after the Merger), except as may be required by generally accepted accounting principles, or settle any material Audit, make any material Tax election or settle any material Tax liability or, except as required by Law, amend in any material respect any material Tax Return;
(h) acquire or agree to acquire by merging or consolidating with, or by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business entity;
(i) mortgage or otherwise encumber or subject to any Lien, or sell, transfer or otherwise dispose of (by merger or otherwise), any of its properties or assets, other than encumbrances and Liens that are incurred in the ordinary course of business and consistent with past practice and sales, transfers and dispositions of inventory in the ordinary course of business and consistent with past practice;
(j) settle or compromise any material pending or threatened Litigation;
(k) make any advance, loan, extension of credit or capital contribution to, or purchase or acquire (by merger or otherwise) any stock, bonds, notes, debentures or other securities of, or any assets constituting a business unit of, or make any other investment in, any person, firm or entity, except (a) extensions of trade credit and endorsements of negotiable instruments and other negotiable documents in the ordinary course of business, (b) investments in cash and cash equivalents, and (c) payroll and travel advances in the ordinary course of business;
(l) make any capital expenditures in the aggregate for the Company and REI Barbados in excess of the amounts specified in the Company's budget for capital expenditures, a true and complete copy of which has previously been delivered to the Parent;
(m) waive, amend or allow to lapse any term or condition of any confidentiality or "standstill" agreement to which the Company is a party;
(n) enter into (a) any Contracts with distributors or sales agents other than Contracts terminable without penalty on less than 30 days' notice, (b) any Contracts to distribute products for others or which restrict the ability of the Company, REI Barbados or the Company's affiliates to compete or (c) any other Contracts that would constitute Material Contracts; or amend any of the foregoing agreements as they exist on the date hereof;
(o) amend, change or waive (or exempt any person or entity from the effect of) the Rights Agreement, or redeem the Rights, except in connection with the transactions contemplated under this Agreement or the Ancillary Documents;
(p) change any of the accounting principles or practices used by the Company;
(q) effect any material change in the Company's advertising, product promotion or brand support policies or programs or commit to any significant new product promotion or advertising campaign;
(r) effect any material change in the Company's billing practices or sales terms, or cause or permit a material acceleration or delay in the manufacture, shipment or sale of inventory, the collection of accounts or notes receivable or the payment of accounts or notes payable;
(s) enter into any employment Contracts for Derivatives;
(t) waive, relinquish, release or severance agreement withterminate any right or claim, including any employee such right or claim under any Material Contract, except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with the customary past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for practice of the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effectCompany, or permit any rights of the coverage thereunder material value to lapse, in each case without simultaneously securing replacement insurance policies which will use any Intellectual Property to lapse or be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policiesforfeited;
(xviu) take any action to cause the Company Common Stock to be delisted from the NASDAQ National Market prior to the completion of the Offer;
(v) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could would reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions contained in Section 8.2(a) or 8.2(b) not to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Datebe satisfied; or
(xviiiw) authorize, recommend, propose, announce or enter into authorize any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any actionof, or fail commit or agree to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreementof, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingforegoing actions.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 SECTION 5.01. Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between the date hereof of this Agreement and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Time, except as expressly required by this Agreement or unless Parent shall otherwise consent agree in writingwriting (requests for which may be made by telephone request to Xxxxxx Xxxxxxx at (631) 962-2000, which consent the businesses of the Company and its Subsidiaries shall be conducted only in, and the Company and its Subsidiaries shall not be unreasonably withheldtake any action except in, each the ordinary course of business and in a manner consistent with past practice; and the Company shall use its commercially reasonable efforts to preserve substantially intact the business of the Company and its Subsidiaries:
(i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, keep available the services of their the current officers, employees and consultants of the Company and maintain in effect all its Subsidiaries and to preserve the current relationships of the Company Material Contractsand its Subsidiaries with customers, suppliers and other persons with which the Company or any of its Subsidiaries has significant business relations. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, neither the Company nor any of its Subsidiaries shall shall, during between the Interim Perioddate of this Agreement and the Effective Time, directly or indirectly, do do, or propose to do, any of the following without the prior written consent of Parent:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, conditioned or delayed:
(a) issue, sell or contract for the Parent: issuance or sale, of any of the capital stock of the Company or any securities convertible into or exchangeable for shares of capital stock of the Company or any securities, warrants, options or rights to purchase any of the foregoing (iexcept pursuant to the exercise of options currently outstanding under the Company Stock Option Plans and pursuant to the exercise of options to purchase shares of Company Common Stock under the Employee Stock Purchase Plan);
(b) shall conduct amend the terms of the Plans or any outstanding security, option or warrant;
(c) purchase or redeem any shares of capital stock of the Company (except for the acquisition of shares from holders of options in full or partial payment of the exercise price payable by such holder upon exercise of such options to the extent permitted under the terms of such options as in effect on the date hereof);
(d) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock or other securities, property or otherwise, with respect to any of the Company's capital stock;
(e) amend any of the charter documents, bylaws or other organizational documents of the Company or its business only Subsidiaries;
(f) enter into any contract which if entered into prior to the date hereof would be a Material Contract;
(g) incur or guarantee any material indebtedness or incur any other liabilities outside the ordinary course of business;
(h) except as required to comply with applicable Laws or pursuant to the terms of existing plans or policies, adopt or amend any employee benefit plan, enter into any employment contract, settle any employment dispute, pay or agree to pay any severance, special bonus or special remuneration, including but not limited to change of control payments, to any director or employee, or increase the salaries, wage rates or compensation of its directors or, other than in the ordinary course of business, consistent its employees;
(i) enter into any material agreement with past practice; respect to the Company's Intellectual Property or with respect to the Intellectual Property of any third party;
(iij) shall not take make or change a material election in respect of Taxes, amend a Tax Return, adopt or change an accounting method in respect of Taxes, enter into a Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement or closing agreement, settle or compromise any actionclaim or assessment in respect of Taxes, or fail consent to take any action, extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes with any Governmental Authority;
(k) acquire an equity interest in any entity;
(l) authorize or make any capital expenditures in excess of $50,000 in the aggregate;
(m) make any loans to any third party;
(n) initiate or participate in any new clinical trials;
(o) make any material changes to personnel or other business policies of the Company;
(p) hire any employees except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xixq) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement agree to do any of the foregoing. Notwithstanding the foregoing, the Company shall be permitted prior to the Effective Time to distribute $250,000 among all of its employees as of the date hereof (other than any employee that is a party to a change of control agreement with the Company), which amount will be allocated between all such employees in amounts to be determined by the CEO of the Company, in consultation with the CEO of the Parent.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 SECTION 5.01. Conduct of Business of by the Company Pending the Merger.
(a) The Company covenants and agrees that, between the date hereof of this Agreement and the earlier to occur of the Effective Time or such earlier time as and the termination of this Agreement is terminated in accordance with pursuant to Article VII (such period being hereinafter referred to as the "Interim Period")VIII, except as set forth in Section 5.01 of the Company Disclosure Schedule or as expressly required contemplated by any other provision of this Agreement or Agreement, unless Parent shall otherwise consent in writing, writing (which consent shall not be unreasonably withheldwithheld or delayed):
(i) the Company shall, and shall cause each Company Subsidiary to, use its reasonable best efforts to conduct the business of the Company and its the Company Subsidiaries:
(i) shall conduct its business only , in all respects material to the Company and the Company Subsidiaries, taken as a whole, in the ordinary course of business, business and in a manner consistent with past practice; and
(ii) the Company shall, and shall not take any actioncause each Company Subsidiary to, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve substantially intact its the business organizationorganization of the Company and the Company Subsidiaries, properties and assets, to keep available the services of their the current officers, employees and consultants of the Company and maintain in effect all the Company Material Contracts. Subsidiaries and to preserve the current relationships of the Company and the Company Subsidiaries with customers, suppliers and other persons with which the Company or any Company Subsidiary has significant business relations.
(b) By way of amplification and not limitationlimitation of Section 5.01(a), except as expressly permitted contemplated by any other provision of this AgreementAgreement or as set forth in Section 5.01 of the Company Disclosure Schedule, neither the Company nor any Company Subsidiary shall, between the date of its Subsidiaries shall , during this Agreement and the Interim Periodearlier of the Effective Time and the termination of this Agreement pursuant to Article VIII, directly or indirectly, do do, or propose to do, any of the following without the prior written consent of Parent:Parent (which consent shall not be unreasonably withheld or delayed):
(i) amend or otherwise change its Certificate of Incorporation, Bylaws Incorporation or other By-laws or equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transferpledge, dispose of, grant or encumber, or authorize the issuance, sale, pledge, dispose of disposition, grant or encumber encumbrance of, (A) any shares of any class of capital stock of the Company or any classCompany Subsidiary, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest), of the Company or any Company Subsidiary (except for the issuance of its Subsidiariesup to a maximum of 6,715,239 shares of Company Class A Common Stock issuable pursuant to employee stock options or up to a maximum of 23,625,885 shares of Company Class A Common Stock issuable pursuant to the terms of the Company Convertible Subordinated Notes outstanding on the date hereof, in the ordinary course of business and in a manner consistent with past practice in accordance with the terms of the Company Stock Option Plans or such notes as in effect as of the date hereof) or (B) any assets of the Company or any Company Subsidiary, except in the ordinary course of business and in a manner consistent with past practice;
(iii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for dividends by any direct or indirect wholly owned Company Subsidiary to the Company or any other Company Subsidiary;
(iv) reclassify, combine, split, subdivide or redeem, repurchase or purchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiariescapital stock;
(ivA) sellacquire (including, transferwithout limitation, pledgeby merger, dispose consolidation, or acquisition of stock or encumber assets or any other business combination) any corporation, partnership, other business organization or any division thereof or any material properties, facilities, equipment or other amount of assets, ; (B) except for borrowings under existing credit facilities in the ordinary course of business and in a manner consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse endorse, or otherwise as an accommodation become responsible for for, the obligations of any Personperson, or make any loansloans or advances, advances or grant any security interest in any of its assets; (C) enter into any financial commitments, except contract or agreement other than in the ordinary course of business and in a manner consistent with past practice that, if in effect on the date hereof, would qualify as otherwise permitted under a Company Material 49 Contract; (D) make, authorize or make any loan or credit agreement commitment with respect to which any capital expenditure, except for capital expenditures that, in the aggregate for each quarter, do not exceed 125% of the budgeted amounts set forth in the Company's capital expenditure budget attached as Section 5.01(b)(v) of the Company Disclosure Schedule; or (E) enter into or amend any of its Subsidiaries is a party as of the date of contract, agreement, commitment or arrangement with respect to any matter set forth in this AgreementSection 5.01(b)(v);
(xvi) authorize make any capital expenditures investment in any entity (other than a subsidiary) in excess of $175,000 in the aggregate25 million;
(xi) take or permit to be taken any action to: (Avii) increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases in salary the ordinary course of business and in a manner consistent with past practice or as required by applicable Law in salaries or wages of employees of the Company or any Company Subsidiary who are not directors or officers of the Company, or grant any severance or termination pay to (other than pursuant to existing contractual obligations disclosed in accordance with agreements entered into prior to Section 3.10(a) of the date of this Agreement Company Disclosure Schedule or otherwise in the ordinary course of business and in a manner consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to), or enter into any employment or severance agreement withwith any director, officer or other employee of the Company or of any employee Company Subsidiary, or, except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) as required by Law, establish, adopt, enter into or amend in any material respect any collective bargaining, bonus, profit profit-sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any director, officer or employee; provided that the Company and Parent hereby agree that, notwithstanding the foregoing, award grants may be made to employees of its directorsthe Company and the Company Subsidiaries pursuant to the ChipPAC, officers or employeesInc. Employee Retention Plan and the ChipPAC, Inc. Special Bonus Plan as contemplated in Section 6.05(c);
(xiA) change any accounting policies or procedures (including, without limitation, procedures exercise its discretion with respect to reservesor otherwise voluntarily accelerate the vesting of any Company Stock Award as a result of the Merger, revenue recognitionany other change of control of the Company (as defined in the Company Stock Option Plans) or otherwise; or (B) exercise its discretion with respect to or otherwise amend, payments modify or supplement the Purchase Plan;
(ix) make any change in any material method of accounts payable and collection accounting, method of accounts receivable), unless required by statutory accounting principles or GAAPpractice, except for such change required by reason of a concurrent change in GAAP or compliance with the applicable requirements of the rules and regulations promulgated by the SEC;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiiix) make any Tax tax election inconsistent with past custom and practice or settle or compromise any material United States federal, state, local or foreign Tax liabilitynon-United States income tax liability inconsistent with any accrual or reserve therefor on the consolidated balance sheet of the Company and the consolidated Company Subsidiaries as of September 30, 2003; 50
(xi) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business and in a manner consistent with past practice, of liabilities reflected or reserved against in the consolidated balance sheet of the Company and the consolidated Company Subsidiaries as at September 30, 2003 or subsequently incurred in the ordinary course of business and in a manner consistent with past practice;
(xii) amend, modify or consent to the termination of any Material Company Contract, or agree amend, waive, modify or consent to an extension the termination of a statute the Company's or any Company Subsidiary's material rights thereunder;
(xiii) commence any Action (except in the ordinary course of limitations with respect theretobusiness against third parties) or settle any Action (except in the ordinary course of business, it being understood that any settlement involving the payment by the Company or any Company Subsidiary of more than $500,000 is not in the ordinary course of business);
(xiv) paypermit any item of Company Owned Intellectual Property to lapse or to be abandoned, dischargededicated or disclaimed, satisfy by failing to perform or settle make any litigation applicable filings, recordings or waiveother similar actions or filings, assign or release any rights by failing to pay all required fees and taxes required or claims with respect theretoadvisable to maintain and protect its interest in each and every item of Company Owned Intellectual Property, except where the failure to make such filings and payments results from the exercise of reasonable business judgment;
(xv) fail to maintain in full force and effect all insurance policies currently in effectsell, assign or permit license any of the coverage thereunder to lapseCompany Owned Intellectual Property, except for licensing of Company Owned Intellectual Property in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policiesordinary course of business consistent with past practice;
(xvi) take fail to make in a timely manner any action that (without regard to any action taken, filings with the SEC required under the Securities Act or agreed to be taken, by Company the Exchange Act or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;rules and regulations promulgated thereunder; or
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waiveannounce an intention, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, formal or informal agreement or otherwise make a commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Agreement and Plan of Merger and Reorganization (St Assembly Test Services LTD)
Conduct of Business Pending the Merger. 4.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, except as contemplated by this Agreement, between the date hereof of this Agreement and the earlier to occur of Effective Time, unless the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by this Agreement or unless Parent Buyer shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, each the Business of the Company and its Subsidiaries:
(i) shall conduct its business be conducted only in the ordinary course of businessCompany, consistent with past practice; (ii) and the Company shall not take any actionaction except in, or fail to take any actionthe usual, except in the regular and ordinary course of businessbusiness and the Company will generally conduct its business in substantially the same way as heretofore conducted, consistent with past practice; and (iii) without limiting the foregoing, the Company will continue to operate in the same geographic markets serving the same market segments. The Company shall use its reasonable best efforts to preserve substantially intact its the business organizationorganization of the Company, properties and assets, to keep available the present services of their the officers, employees and consultants of the Company and to preserve the current relationships and goodwill of the Company with customers, suppliers and other persons with which the Company has business relationships. Without limiting the generality of the foregoing, the Company shall:
(i) maintain in full force and effect all contracts of insurance and indemnity specified in any Schedule hereto;
(ii) repair and maintain all of its tangible properties and assets in effect all accordance with its usual and ordinary repair and maintenance standards;
(iii) continue to apply in full the same rigorous credit review process used by the Company Material Contracts. prior to the Closing in determining the extent to which it will extend credit to customers or potential customers in the ordinary course of business;
(iv) notify the Buyer of any material emergency or other material change in the operation of its business or properties and of any governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated).
(b) By way of amplification and not limitationlimitation of clause (a) above, except as expressly permitted by this Agreement, neither the Company nor any shall not between the date of its Subsidiaries shall , during this Agreement and the Interim PeriodEffective Time, directly or indirectlyindirectly do, do or publicly announce an intention to do, any of the following without the prior written consent of Parent:Buyer through one of its authorized representatives (which representatives shall be each of its Chief Executive Officer, President and Chief Financial Officer):
(i) amend or otherwise change its Certificate of Incorporation, Bylaws Organizational Documents or other By-laws or equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, deliver, sell, transfer, pledge, dispose of, grant, encumber, or authorize the issuance, delivery, sale, pledge, disposition, grant or encumbrance of, any Equity Interests of or encumber any shares of capital stock of any classthe Company, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stocksuch Equity Interests, or any other ownership interest interest, of the Company, or enter into any agreement with respect to any of the foregoing, other than in connection with the Stock Warrant Agreement and upon exercise of the Company or any of its SubsidiariesStock Options;
(iii) redeem, repurchase make any distribution (by way of dividend or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of otherwise) with respect to its SubsidiariesEquity Interests;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, Equity Interests or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares its Equity Interests;
(v) repurchase, redeem or otherwise acquire any Equity Interests of its capital stock the Company, or equity interestsany securities convertible into or exercisable for any of the Equity Interests of the Company;
(vi) enter into any new line of business or materially expand the business currently conducted by the Company;
(vii) sellacquire or agree to acquire, transferby merging or consolidating with, lease, license, sublicense, mortgage, pledge, dispose or by purchasing an equity interest in or a portion of the assets of, encumberor by any other manner, grant any business or otherwise dispose of any Company Intellectual Propertycorporation, partnership, other business organization or amend any division thereof or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course amount of business consistent with past practiceassets;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money money, increase the aggregate amounts owed under the Company's existing credit facilities or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse endorse, or otherwise as an accommodation become responsible for for, the obligations of any Personindividual, corporation or other entity, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or advance;
(ix) lower or otherwise alter its credit agreement to which the Company or any of its Subsidiaries is a party card fraud review process (as of the date of this Agreementmore fully described in Exhibit 6.01);
(x) authorize any capital expenditures in excess of more than $175,000 25,000 in the aggregateaggregate approved by Buyer);
(xi) take or permit to be taken any action to: (A) increase (x) adopt, amend, renew or terminate any plan or any agreement, arrangement, plan or policy between the compensation payable to Company and one or more of its current or former directors, officers or employees, except for increases or (y) increase in salary any manner the compensation or wages fringe benefits of any director, officer or employee or pay any benefit not required by any plan or agreement as in accordance with agreements entered into prior to effect as of the date hereof (including, without limitation, the granting of this Agreement stock options, stock appreciation rights, restricted stock, restricted stock units or otherwise in the ordinary course of business consistent with past practiceperformance units or shares); or (B) grant enter into, modify or renew any additional employment, severance or termination pay toother agreement with any director, officer or employee of the Company, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance severance, retention or other plan, agreement, trust, fund, policy or arrangement providing for the any benefit of to any of its directorsdirector, officers officer or employeesemployee;
(xii) change pay any accounting policies bonus or procedures (includingany compensation other than base compensation, without limitation, procedures with respect to reserves, revenue recognition, except for payments of accounts payable bonuses and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection other incentive compensation to sales personnel pursuant to and consistent with the Mergerwritten sales incentive plan which has been provided to and approved by Buyer;
(xiii) take any action with respect to accounting methods, principles or practices, other than changes required by applicable law or GAAP or regulatory accounting as concurred in by the Company's independent accountants;
(xiv) make any Tax tax election or settle or compromise any material federal, state, local or foreign Tax tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xivxv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, dischargedischarge or satisfy any claim, satisfy liability or settle any material litigation or waive, assign or release any rights or claims with respect theretoobligation, other than settlements the payment, discharge or satisfaction, in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made consistent with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policiespast practice;
(xvi) take any action that (without regard to any action takensell, lease, encumber, assign or otherwise dispose of, or agreed agree to be takensell, by Parent lease, encumber, assign or otherwise dispose of, any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Codematerial assets, properties or other rights or agreements;
(xvii) take any action that is intended or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably can be expected to result in either (A) any of the its representations and warranties of the Company set forth in Article II of this Agreement being or becoming untrue in any material respect respect, or (B) any of the conditions to the Closing consummation of the Merger and the other transactions contemplated by this Agreement set forth in Article VI of this Agreement IX not being satisfied in any material respect as respect, or in any material violation of the Closing Date; orany provision of this Agreement;
(xviii) authorize, recommend, propose, announce or enter into or renew, amend or terminate, or give notice of a proposed renewal, amendment or termination of or make any agreementcommitment with respect to, (A) any contract, commitment agreement or arrangement lease for office space or operations space to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless which the Company shall otherwise consent in writingis a party or by which the Company or its properties is bound; (B) any lease, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only contract or agreement other than in the ordinary course of business, business consistent with past practicepractice including renewals of leases to existing tenants of the Company ; (iiC) shall not take any action, or fail to take any action, except in the ordinary course regardless of business, whether consistent with past practice; and (iii) shall use its reasonable best efforts practices, any lease, contract, agreement or commitment involving an aggregate payment by or to preserve intact its business organization, properties and assets, and keep available the services Company of their officers, employees and consultants. By way more than $10,000 or requiring performance by the Company of amplification and not limitation, except as expressly permitted by this Agreement, any obligations at any time more than one year after the Parent shall not, during the Interim Period, directly or indirectly, do any time of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseexecution;
(iixix) issueenter into an agreement, sell, transfer, pledge, dispose of or encumber any shares of capital stock of any classcontract, or any optionscommitment that, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements if entered into prior to the date hereof, would be required to be listed on a Schedule delivered to Buyer pursuant to the terms of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement withincluding without limitation, any employee except in accordance arrangement or contract with agreements entered into before the date of this Agreementrespect to web site development or operations; (D) enter into any collective bargaining agreementmarketing, promotion, affiliate and advertising, including search engine referrals and Internet private labeling; fulfillment operations; or telephone, credit card or freight carrier services;
(Exx) establishamend, adopt, enter into terminate or amend change in any material respect any bonuslease, profit sharingcontract, thriftundertaking, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance arrangement or other plancommitment listed in any Schedule (including without limitation its arrangements and contracts with respect to web site development and operations; marketing, trustpromotion, fundaffiliate and advertising, policy including search engine referrals and Internet private labeling; fulfillment operations; and telephone, credit card or arrangement for the benefit freight carrier services) or knowingly do any act or omit to do any act, or permit an act or omission to act, that will cause a breach of any of its directorssuch lease, officers contract, undertaking, arrangement or employeesother commitment;
(xixxi) change any accounting its pricing policies or procedures (including, without limitation, procedures its policies with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAPfreight rates charged to customers;
(xiixxii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease transaction with respect to real propertyan Insider; or
(xixxxiii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement agree to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Pc Connection Inc)
Conduct of Business Pending the Merger. 4.1 Section 5.01 Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between from the date hereof and of this Agreement until the earlier to occur of the Effective Time or such earlier time as and termination of this Agreement is terminated in accordance with Article VII (such period being hereinafter referred pursuant to as the "Interim Period")Article VIII, except as expressly (x) required by applicable Law, (y) set forth in Section 5.01 of the Company Disclosure Schedule, or (z) permitted by or contemplated in this Agreement or Agreement, unless Parent shall may otherwise consent in writing, writing (which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries:
delayed or conditioned), (i) the businesses of the Group Companies shall conduct its business only be conducted in the ordinary course of business, business consistent with past practice; practice or as contemplated by the forecast of the Company delivered by the Company to Parent prior to the date hereof, and (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) Company shall use its reasonable best efforts to preserve substantially intact its the assets and the business organizationorganization of the Group Companies, properties and assets, to keep available the services of their officers, the current executive officers and key employees of the Group Companies and consultants and to maintain in effect all Company Material Contractsmaterial respects the current relationships of the Group Companies with existing customers, suppliers and other Persons with which any Group Companies has material business relations as of the date hereof. By way Without limiting the generality of amplification the foregoing, from the date of this Agreement until the earlier of the Effective Time and not limitationtermination of this Agreement pursuant to Article VIII, except as expressly (A) required by applicable Law, (B) set forth in Section 5.01 of the Company Disclosure Schedule, or (C) permitted by or contemplated in this Agreement, neither Agreement or contemplated by the forecast of the Company nor delivered by the Company to Parent prior to the date hereof, the Company shall not, and shall not permit any of its Subsidiaries shall , during the Interim PeriodGroup Company to, directly or indirectly, do or propose to do any of the following without the prior written consent of Parent:Parent (which consent shall not be unreasonably withheld, delayed or conditioned):
(ia) amend or otherwise change its Certificate memorandum and articles of Incorporation, Bylaws association or other equivalent organizational documents, other than those changes to the registered address or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwisebusiness scope of a Group Company as reasonably needed within the ordinary course of business of such Group Company;
(iib) issue, sell, transfer, lease, sublease, license, pledge, dispose of of, grant or encumber encumber, or authorize the issuance, sale, transfer, lease, sublease, license, pledge, disposition, grant or encumbrance of, (i) any shares of capital stock any class of any classGroup Company (other than in connection with (A) the issuance of Shares upon the exercise of any Company Options or Company RSUs in accordance with their respective terms, (B) the withholding of securities of the Company to satisfy Tax obligations with respect to Company Options or Company RSUs, (C) the acquisition by the Company of its securities in connection with the forfeiture of Company Options or Company RSUs, (D) the acquisition by the Company of its securities in connection with the net exercise of Company Options in accordance with the terms thereof, (E) any transaction between or among the Company and its direct or indirect wholly owned Subsidiaries, or (F) the issuance of Class A Shares to holders of Class B Shares in connection with the conversion of such Class B Shares in accordance with the memorandum and articles of association of the Company), (ii) any optionsproperty or assets (whether real, warrantspersonal or mixed, convertible securities and including leasehold interests and intangible property) of any Group Company with a value or purchase price (including the value of assumed liabilities) in excess of $2,000,000, except in the ordinary course of business or pursuant to existing Contracts, or (iii) any material Intellectual Property owned by or licensed to any Group Company, except in the ordinary course of business or pursuant to existing Contracts;
(c) declare, set aside, make or pay any dividend or other rights distribution, payable in cash, shares, property or otherwise, with respect to any of its shares (other than dividends or other distributions from any kind Subsidiary of the Company to acquire any shares of capital stock, or any other ownership interest of the Company or any of its other Subsidiaries);
(iiid) reclassify, combine, split, subdivide or redeem, repurchase or purchase or otherwise acquire, directly or indirectly, any shares of its share capital stock of the Company or interest in or securities of or other rights exchangeable into or convertible or exercisable for any of its Subsidiariesshare capital (other than (i) the purchase of Shares to satisfy obligations under the Company Share Plans, including the withholding of Shares in connection with the exercise of Company Options or Company RSUs in accordance with the their respective terms, and (ii) the cancellation, repurchase and redemption or re-designation and reclassification of Class B Shares in connection with the conversion thereof to Class A Shares in accordance with the memorandum and articles of association of the Company);
(ive) selleffect or commence any liquidation, transferdissolution, pledgescheme of arrangement, dispose of merger, consolidation, amalgamation, restructuring, reorganization, or encumber similar transaction involving any material Group Company, or create any new Subsidiary, other than the Transactions;
(f) acquire any assets, securities or properties, facilitiesin any single transaction or related series of transactions, equipment for consideration in excess of $2,000,000, except for acquisitions in the ordinary course of business or pursuant to existing Contracts;
(g) make any capital contribution or investment in any corporation, partnership, other business organization or any division thereof in excess of $2,000,000 in any single transaction or related series of transactions other than (i) in the ordinary course of business, or (ii) pursuant to existing Contracts;
(h) incur, assume, alter, amend or modify any Indebtedness, or guarantee any Indebtedness, in each case, with an amount in excess of $2,000,000 in a single transaction or related series of transactions, except for (i) the incurrence or guarantee of Indebtedness under any Group Company’s existing credit facilities or other assetsContracts as in effect on the date hereof in an aggregate amount not to exceed the maximum amount authorized under the Contracts evidencing such Indebtedness, except (ii) any amendments to the Contracts related to any Group Company’s existing credit facilities which are requested by the applicable lender(s) in connection with the Transactions, (iii) in the ordinary course of business consistent with past practicepractice (including the renewal, extension or amendment of Contracts related to the Group Companies’ existing loans, or any drawdown or repayment of loans under such Contracts), or (iv) any Indebtedness between the Company and its Subsidiaries, or between two or more Subsidiaries of the Company;
(vi) declaremake any changes with respect to financial accounting policies or procedures in any material respect, including changes affecting the reported consolidated assets, liabilities or results of operations of the Group Companies, except as required by changes in statutory or regulatory accounting rules or GAAP or regulatory requirements with respect thereto;
(j) settle any pending or threatened in writing Action of or against any Group Company (A) by making payments for an amount in excess of $1,000,000 for any single Action, (B) that would impose any material restrictions on the business or operations of any Group Company, or (C) that is brought by or on behalf of any current, former or purported holder of any share capital or debt securities of any Group Company relating to the Transactions, except for, in each case, any Actions occurring in the ordinary course of business;
(k) make or change any material Tax election, amend any material Tax Return, enter into any closing agreement or seek any ruling from any Governmental Authority with respect to material Taxes, or make any material change in any method of Tax accounting or Tax accounting period;
(l) authorize or make any capital expenditures which are, in the aggregate, in excess of $2,000,000, other than as set aside forth in the annual budget of the Company duly approved by the Company Board;
(m) (x) enter into any Contract that would have been a Material Contract if it had been in effect as of the date hereof, or pay (y) modify or amend in any dividend material respect, terminate, or waive, release, compromise or assign any rights or claims under, any Material Contract in each case not in the ordinary course of business, other than (A) any termination or renewal in accordance with the terms of any existing Material Contract that occur automatically without any action by the Company or any of its Subsidiaries, (B) as may be reasonably necessary to comply with the terms of this Agreement, or (C) as required or contemplated by the terms of any Material Contract in effect as of the date hereof in accordance with its terms as of the date hereof;
(n) except as required by Law or as required pursuant to this Agreement or the terms of any Company Employee Plan as in effect on the date hereof, (A) increase the compensation or benefits (including change in control, retention, severance termination pay, deferred compensation or other distribution (whether in cash, stock or other securities or property, or any combination thereofsimilar arrangement) in respect of any of its capital stock directors, officers, employees, contractors, consultants, or other equity interests service providers (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vix) split, combine base salary or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution wage increases for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than employees in the ordinary course of business consistent with past practicepractices, or (y) increases that would not in the aggregate cause an increase in the labor costs of the Company and its Subsidiaries, taken as a whole, by more than 10% compared with the labor costs of the Company and its Subsidiaries, taken as a whole, as of the date hereof), (B) make, announce or grant any incentive compensation (including equity-based incentive compensation) bonus, change in control, retention, severance, termination pay or other similar arrangement to any current or former directors, officers, employees, contractors, consultants, or service providers (other than in connection with an ordinary course hiring of employees), (C) establish, adopt, enter into, materially amend or terminate any Company Employee Plan, (D) loan or advance any money or any other property to any present or former director, officer, employee, contractor, consultant, or service provider of the Company or any subsidiary, (E) hire (other than in connection with an ordinary course replacement hiring for employees whose annual compensation is less than $250,000) or terminate (other than for cause) any employee, contractor, consultant or service provider with an annual compensation in excess of $250,000 or enter into an agreement with respect to the foregoing, or (F) take any action to accelerate the vesting, funding or payment of any compensation, or benefits under, any Company Employee Plan or otherwise;
(viiio) acquire (by mergerterminate or cancel, consolidationlet lapse, acquisition of stock or assets amend or otherwise) modify in any corporationmaterial respect, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into renewals in the ordinary course of business, any material insurance policies maintained by the Company and its Subsidiaries which are not promptly replaced by a comparable amount of insurance coverage;
(p) enter any new line of business outside of its existing business as of the date hereof that is material to the Company and its Subsidiaries, taken as a whole;
(q) grant or endorse issue any new Company Options or otherwise as an accommodation become responsible for Company RSUs pursuant to the obligations of any Person, or make any loans, advances Company Share Plans; and
(r) agree to or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement Contract or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay tomake a legally binding commitment, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein Solely for the purposes of this Section 5.01, pandemic or epidemic-related measures reasonably taken by the Group Companies for the purposes of reducing any adverse impact on the businesses and assets of the Group Companies, including those responding to the contraryCOVID-19, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date constitute a breach of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingSection 5.01.
Appears in 1 contract
Samples: Merger Agreement (iClick Interactive Asia Group LTD)
Conduct of Business Pending the Merger. 4.1 Section 5.1 Conduct of Business of by the Company Pending the Merger.
(a) The Company covenants and agrees that, between the date hereof and the earlier . Prior to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Time, except as expressly required by this Agreement or unless Parent shall otherwise consent agree in writing, writing (which consent agreement shall not be unreasonably withheld), each or as set forth in Section 5.1 of the Company Disclosure Schedule, the Company shall conduct, and cause each of its Subsidiaries:
(i) shall conduct Subsidiaries to conduct, its business only in the ordinary and usual course of business, consistent with past practice; (ii) , and the Company shall not take any actionuse, or fail and cause each of its Subsidiaries to take any actionuse, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its the present business organization, properties and assets, keep available the services of its present officers and key employees, and preserve their officersexisting business relationships. Without limiting the generality of the foregoing, employees and consultants and maintain unless Parent shall otherwise agree in effect all Company Material Contracts. By way writing (which agreement shall not be unreasonably withheld), or as set forth in Section 5.1 of amplification and not limitation, except as expressly permitted by this Agreement, neither the Company Disclosure Schedule, prior to the Effective Time the Company shall not, nor shall it permit any of its Subsidiaries shall , during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parentto:
(a) (i) amend its Certificate of Incorporation, Bylaws as amended, By-Laws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issuesplit, sell, transfer, pledge, dispose of combine or encumber reclassify 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 its outstanding capital stock, or any other ownership interest of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether payable in cash, stock or property (other securities or property, or any combination thereof) in respect than regular quarterly dividends with record dates and payment dates substantially consistent with past practice of any not more than $.02 per share of its capital stock or other equity interests Class A Common Stock and $.0167 per share of Class B Common Stock (except it being the express understanding of Parent and the Company that a wholly owned Subsidiary the share holders of the Company may shall be entitled to either a dividend on the Shares or on the shares of Parent Common Stock, but not both, for the quarter in which the Closing shall occur, and the Board of Directors of the Company shall not declare and pay a cash any dividend to the Companyor fix any record therefor which would have such effect);
), or (viiv) split, combine directly or reclassify indirectly redeem or otherwise acquire any shares of its capital stock or other securities shares of the capital stock of any of its Subsidiaries;
(b) authorize for issuance, issue (except upon the exercise of outstanding stock options or equity interestswarrants) or sell or agree to issue or sell any shares of, or issue rights to acquire or convertible into any other securities in respect shares of, in lieu of or in substitution for shares of its capital stock (other than pursuant to the terms of the Company's Employee Stock Purchase Plan, as amended in accordance with Section 6.14 hereof) or equity interestsshares of the capital stock of any of its Subsidiaries (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise);
(viic) (i) merge, combine or consolidate with another entity, (ii) acquire or purchase an equity interest in or a substantial portion of the assets of another corporation, partnership or other business organization or otherwise acquire any assets outside the ordinary course of business and consistent with past practice or otherwise enter into any material contract, commitment or transaction outside the ordinary course of business and consistent with past practice or (iii) sell, transfer, lease, license, sublicensewaive, mortgagerelease, pledgetransfer, dispose of, encumber, grant encumber or otherwise dispose of any Company Intellectual Propertyof its material assets outside the ordinary course of business and consistent with past practice;
(d) (i) incur, assume or amend prepay any indebtedness, obligations or modify liabilities other than in each case in the ordinary course of business and consistent with past practice, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any material respect any existing agreements with respect to any Company Intellectual Property other person other than a Subsidiary of the Company, in each case other than in the ordinary course of business and consistent with past practice;
practice or (viiiiii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into capital contributions to, or investments in, any financial commitmentsother person, except other than to any Subsidiary of the Company;
(e) pay, satisfy, discharge or settle any material claim, liabilities or obligations (absolute, accrued, contingent or otherwise), other than in the ordinary course of business and as otherwise permitted under consistent with past practice or pursuant to mandatory terms of any loan Company Contract in effect on the date hereof;
(f) modify or credit amend, or waive any benefit of, any non-competition agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreementparty;
(xg) authorize any or make capital expenditures in excess of $175,000 200,000 individually, or in excess of $1,000,000 in the aggregateaggregate except for those projects currently in progress as set forth in Section 5.1(g) of the Company Disclosure Schedule;
(xih) take permit any insurance policy naming the Company or permit any Subsidiary of the Company as a beneficiary or a loss payee to be taken cancelled or terminated other than in the ordinary course of business;
(i) (i) adopt, enter into, terminate or amend (except as may be required by Applicable Law) any action to: employee plan, agreement, contract, arrangement or other Company Plan, including the Company's Employee Stock Purchase Plan, for the current or future benefit or welfare of any director, officer or employee, (Aii) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant , increase in any additional severance manner the compensation or termination fringe benefits of, or pay any bonus to, any director, officer or enter into any employment employee; provided, however, that no such increase or severance agreements with, its officers; (C) grant any severance payment shall be made to or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any person listed in Section 5.1(i) of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liabilityCompany Disclosure Schedule, or agree to an extension of a statute of limitations with respect thereto;
(xiviii) other than with respect pursuant to the Atari litigation set forth Section 2.7 hereof, take any action to fund or in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability ofway secure, or any infringement to accelerate or otherwise remove restrictions with respect to, the payment of compensation or benefits under any employee plan, agreement, contract, arrangement or other Company Intellectual Property RightsPlan;
(xvj) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in make any material respect change in its accounting or (B) any of the conditions tax policies or procedures, except as required by Applicable Law or to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Datecomply with GAAP; or
(xviiik) authorize, recommend, propose, announce or enter into any contract, agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Hudson James T)
Conduct of Business Pending the Merger. 4.1 Section 6.01 Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between the date hereof of this Agreement and the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Time, except as expressly required required, permitted or otherwise contemplated by this Agreement or unless Parent shall otherwise as set forth in Section 6.01 of the Disclosure Schedule and except with the prior written consent in writingof Parent, which consent shall not be unreasonably withheld, each conditioned or delayed, the businesses of the Company Company, the Operating Partnership and its Subsidiaries:
(i) the Company's other Subsidiaries shall conduct its business only be conducted, and the Company, the Operating Partnership and the Company's other Subsidiaries shall not take any action except, in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, business consistent with past practice; and (iii) the Company shall use its commercially reasonable best efforts to preserve (i) substantially intact its the business organizationorganization of the Company, properties the Operating Partnership and assetsthe Company's other Subsidiaries, to keep available the services of their its present officers, managers and employees and consultants to preserve the current relationships of the Company, the Operating Partnership and maintain in effect all the Company's other Subsidiaries with lessees and other Persons with which the Company, the Operating Partnership or any other Subsidiary of the Company Material Contractshas significant business relations and (ii) the Company's status as a REIT within the meaning of the Code. By way of amplification and not limitationExcept as required, except as expressly permitted or otherwise contemplated by this AgreementAgreement or as set forth on Section 6.01 of the Disclosure Schedule, neither none of the Company nor any Company, the Operating Partnership and the Company's other Subsidiaries shall, between the date of its Subsidiaries shall , during this Agreement and the Interim Period, directly or indirectlyEffective Time, do any of the following without the prior written consent of Parent:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of businessconditioned or delayed; provided, consistent with past practice; (ii) shall not take any actionhowever, or fail to take any actionthat, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless consents required by statutory accounting principles or GAAP;
(xii) createthe Company under this Section 6.01, incur, suffer the Company shall send to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any Consent Addressees identified in Section 10.03 a written request for such consent and if Parent does not object in writing within two (2) Business Days after delivery of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of such initial request for consent, the conditions Company shall send to the Closing set forth Parent Consent Addressees identified in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.Section
Appears in 1 contract
Samples: Merger Agreement (Eagle Hospitality Properties Trust, Inc.)
Conduct of Business Pending the Merger. SECTION 4.1 Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between during the period from the date hereof of this Agreement and continuing until the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by termination of this Agreement or the Effective Time, unless Parent shall otherwise consent agree in writing, which consent agreement shall not be unreasonably withheld, each of the Company and its Subsidiaries:
(i) shall conduct its business only in in, and the Company shall not take any action except in, the ordinary course of business, business and in a manner consistent with past practice; (ii) shall not take any action, or fail to take any action, except practice other than actions taken by the Company in contemplation of the ordinary course of business, consistent with past practiceMerger; and (iii) the Company shall use its all reasonable best commercial efforts to preserve substantially intact its the business organizationorganization of the Company, properties and assets, to keep available the services of their the present officers, employees and consultants of the Company and maintain in effect all to preserve the present relationships of the Company Material Contractswith customers, suppliers and other persons with which the Company has business relations. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, neither the Company nor any of its Subsidiaries shall not, during the Interim Periodperiod from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectlyindirectly do, do or propose to do, any of the following without the prior written consent of Parent:
(ia) amend its Certificate the Articles of Incorporation, Bylaws Incorporation or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseBy-Laws of the Company except pursuant to the Merger Agreement;
(iib) issue, sell, transfer, pledge, dispose of or encumber encumber, or authorize the issuance, sale, pledge, disposition or 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 of (including, without limitation, any phantom interest) in the Company or any of its SubsidiariesCompany;
(iiic) redeemexcept in the ordinary course of business, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment assets (tangible or other assets, intangible) of the Company except for (i) dispositions of obsolete or worthless assets and (ii) sales of assets not in excess of $50,000 in the ordinary course of business consistent with past practiceaggregate;
(vi) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests stock, (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(viii) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests(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;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiii) acquire (by merger, consolidation, or acquisition of stock or assets or otherwiseassets) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereof;
; (ixii) except in the ordinary course of business and only under the Company's revolving line of credit, incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for for, the obligations of any Person, or make any loans, advances or enter into any financial commitmentsperson or, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice, make any loans or advances; (Biii) grant enter into or amend any additional severance material contract or termination pay toagreement; (iv) authorize any capital expenditures or purchases of fixed assets which are, in the aggregate, in excess of $100,000; or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(e);
(f) increase the compensation payable or to become payable to its officers, increase compensation payable or to become payable to its employees other in the ordinary course of business, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement withwith any director, any officer or other employee except in accordance with agreements entered into before of the date of this Agreement Company, or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any of its current or former directors, officers or employees, except, in each case, as may be required by law;
(xiig) take any action to change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiiih) make any Tax material tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability, tax liability or agree to an extension of a statute of limitations with respect theretolimitations;
(xivi) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, dischargedischarge or satisfy any claims, satisfy liabilities or settle any material litigation obligations (absolute, accrued, asserted or waiveunasserted, assign contingent or release any rights or claims with respect theretootherwise), other than settlements the payment, discharge or satisfaction in the ordinary course of business that involve only and consistent with past practice of liabilities reflected or reserved against in the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing Financial Statements or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only incurred in the ordinary course of business, business and consistent with past practice; or
(iij) shall not take any actiontake, or fail agree in writing or otherwise to take any actiontake, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
actions described in Sections 4.1 (a) through (i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber any shares of capital stock of any classabove, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) 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 action which would make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and or warranties of the Parent or any of its Subsidiaries set forth Company contained in Article III of this Agreement becoming untrue in any material respect or (B) any of incorrect or prevent the conditions Company from performing or cause the Company not to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingperform its covenants hereunder.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, between From the date hereof and until the earlier to occur of (i) the Effective Time or such earlier time as and (ii) the date of any termination of this Agreement is terminated in accordance with Article VII (such period being hereinafter referred pursuant to as the "Interim Period")Section 8.1, except as expressly required otherwise consented to by this Agreement or unless Parent shall otherwise in writing (such consent in writing, which consent shall not to be unreasonably withheld, each of the Company conditioned or delayed), and its Subsidiaries:
(i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, keep available the services of their officers, employees and consultants and maintain in effect all Company Material Contracts. By way of amplification and not limitation, except as expressly otherwise contemplated, required or permitted by this Agreement, neither (A) the Company nor any of shall conduct business only in, and the Company and its Subsidiaries shall not take any action except in, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practicepractice and (B) the Company shall use its commercially reasonable efforts to keep available the services of its current officers and employees and preserve, in all material respects, the current relationships of the Company with customers, suppliers, licensors, licensees, distributors and other Persons with which the Company has business dealings.
(b) Without limiting the generality of the foregoing, except as set forth in Section 6.1(b) of the Company Disclosure Letter or as otherwise contemplated, required or permitted by this Agreement, applicable Law or the terms of any Company Benefit Plan or as consented to by Parent in writing (such consent not to be unreasonably withheld, conditioned or delayed), at all times during the period commencing with the execution and delivery of this Agreement and continuing until the earlier of (i) the Effective Time and (ii) the date of any termination of this Agreement pursuant to Section 8.1, the Company shall not do any of the following and shall not permit its Subsidiaries to do any of the following:
(i) amend, or propose to adopt any amendments to, the Company’s or its Subsidiaries’ respective certificate of incorporation or bylaws or comparable organizational documents;
(vii) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase, convertible, exchangeable or exercisable securities, rights of any kind to purchase or otherwise) any securities in respect of, in lieu of or in substitution for shares of its capital stock, voting securities or any other equity interests or Company Stock Rights or other interests or securities in Subsidiaries that would be Company Stock Rights if they were interests or securities in the Company;
(iii) acquire or redeem, directly or indirectly, or amend any securities in respect of, in lieu of or in substitution for shares of its capital stock, except to the extent that such acquisition or redemption is required pursuant to the terms of any Company Benefit Plan (as then in effect) or any agreement subject to any such Company Benefit Plan (as then in effect);
(iv) other than dividends or distributions made by any direct or indirect wholly-owned Subsidiary of the Company to the Company or one of its Subsidiaries, set any record or payment dates for the payment of any dividends or distributions on capital stock or other equity interests, split, combine or reclassify any shares of capital stock or other equity interests of the Company or its Subsidiaries, declare, set aside or pay any dividend or other distribution (whether in cash, stock shares or other securities or property, property or any combination thereof) in respect of any such shares of capital stock or other equity interests, or make any other distribution in respect of such shares of capital stock or other equity interests;
(v) propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;
(vi) (A) except as reasonably necessary or appropriate in order to comply with municipal platting, planning, construction and development codes or requirements in the ordinary course of business (but in no event for an amount that exceeds $100,000), incur Indebtedness for borrowed money or issue any debt securities, except for loans or advances to or from Subsidiaries, or assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, in each case, other than the incurrence of Indebtedness under, and in accordance with, the Existing Loan Documents secured solely by Owned Real Property, Leased Real Property or JV Owned Real Property in the ordinary course of business consistent with past practice (provided that, in the event that any borrowing will exceed $500,000 under any Existing Loan Document, the Company shall give Parent reasonable advance notice prior to the incurrence of any such Indebtedness), (B) make any loans or advances to any Person, make any material change in its existing borrowing or lending arrangements for or on behalf of any Person or enter into any “keep well” or similar agreement to maintain the financial condition of another entity, (C) acquire, or make any capital contributions to or investments in any other Person (other than direct or indirect wholly-owned Subsidiaries of the Company), by purchase or other acquisition of stock or other equity interests (except that other than in a wholly owned Subsidiary fiduciary capacity in the ordinary course of business consistent with past practice), whether by merger, consolidation, asset purchase or other business combination, or by formation of any joint venture or other business organization or by contributions to capital; (D) mortgage or pledge any of its or its Subsidiaries assets, tangible or intangible, or create or suffer to exist any material Lien (other than Permitted Liens) thereupon; or (E) prepay any Indebtedness for borrowed money or issue or amend the terms of any debt securities of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interestsSubsidiaries;
(vii) (A) enter into, adopt, amend, modify or terminate any employment, bonus, profit sharing, compensation, severance, termination, option, appreciation right, performance unit, stock equivalent, share purchase agreement, pension, retirement, deferred compensation, severance or other Company Benefit Plan or employee benefit arrangement, agreement, trust, plan, fund, Contract or other arrangement for the compensation, benefit, or welfare of any current or former employee, director or consultant of the Company or any of its Subsidiaries, (B) otherwise take any action to cause to accelerate the payment, funding, right to payment or vesting of any compensation or benefits (except as required pursuant to this Agreement) or grant any increases to the compensation, severance or benefits of any current or former employee, director or consultant of the Company or any of its Subsidiaries or pay any bonus or special remuneration (whether in cash, equity or otherwise) to any current or former employee, consultant, independent contractor or director; (C) hire or terminate (without cause) any employee or service provider of the Company or its Subsidiaries with an aggregate annual compensation opportunity of $100,000 or more; or (D) appoint any Person to a position of executive officer or director of the Company or its Subsidiaries;
(viii) except as may be specifically required under a Company Benefit Plan, grant, confer, award, or modify the terms of any options, convertible securities, restricted stock, phantom shares, equity-based compensation or other rights to acquire, or denominated in, any of the Company’s or any of its Subsidiaries’ capital stock or other voting securities or equity interests (except as may be required by the terms of any unexercisable options or other equity awards outstanding on the date of this Agreement);
(ix) other than as contemplated by the forecast set forth in Section 6.1(b)(ix) of the Company Disclosure Letter or transactions required pursuant to existing Contracts as in effect on the date hereof and disclosed in the Company Disclosure Letter, (A) acquire, lease (as lessee) or license (as licensee) any property or assets; or (B) sell, transferlease (as lessor), lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant license (as licensor) or otherwise dispose of any property or assets (including, for the avoidance of doubt, any Owned Real Property), in each case, with an individual value greater than $100,000 (provided that, with respect to the sale of lots in the ordinary course of business consistent with past practice which would otherwise require the consent of Parent pursuant to this clause (ix), the Company Intellectual Propertyshall only be required to provide Parent with 48 hours’ advance notice of any such sale and, in the event Parent fails to respond within such period, Parent’s consent shall be deemed to have been granted);
(x) except as may be required as a result of a change in applicable Laws or amend in GAAP, make any change in any of the accounting principles or modify practices used by it or fail to maintain all financial books and records in all material respects in accordance with GAAP;
(xi) (A) make, change or revoke any Tax election that would be reasonably expected to adversely affect in any material respect the Tax liability of the Company or any existing agreements of its Subsidiaries, (B) change any material Tax accounting method, (C) settle or compromise any material U.S. federal, state, local or non-U.S. Tax liability, (D) consent to any extension or waiver of any limitation period with respect to any claim or assessment for material Taxes, (E) file any amended material Tax Return with respect to any Tax, or (F) surrender any right to a refund of material Taxes;
(xii) (A) enter into, renew, extend or terminate (other than the termination or expiration of a Material Contract as in effect as of the date hereof pursuant to its terms) any Material Contract (or any Contract that would have been a Material Contract if it had been in effect on the date hereof, but specifically excluding any Material Real Property Leases), except in the ordinary course of business consistent with past practice with respect to (1) any such Material Contract described solely in clause (iv) of the definition of “Material Contract” that does not involve payments to or from the Company Intellectual or any of its Subsidiaries of more than $200,000 during any twelve-month period or (2) subject to clauses (ix) and (xxi) of this Section 6.1(b), any sale agreement; or (B) make any material amendment or change to any such Material Contract (including any waiver, release, compromise or assignment of material rights or claims thereunder, but specifically excluding any Material Real Property Leases), except in the ordinary course of business consistent with past practice with respect to any amendment or change that would not itself alone result in such Contract being a Material Contract (other than pursuant to clause (iv) of the definition of “Material Contract”) and which amendment or change does not involve payments to or from the Company or any of its Subsidiaries of more than $200,000 during any twelve-month period;
(xiii) except as required by applicable Law, recognize or certify any labor union, labor organization, works council, or group of employees of the Company or its Subsidiaries as the bargaining representative for any employees of the Company or its Subsidiaries;
(xiv) except for the Litigation referred to in Section 6.6, settle or compromise any pending or threatened Litigation or pay, discharge or satisfy or agree to pay, discharge or satisfy any claim, liability or obligation, absolute or accrued, asserted or unasserted, contingent or otherwise, other than the settlement, compromise, payment, discharge or satisfaction of Litigation, claims and other liabilities that (A) are reflected or reserved against in full in the Company Financial Statements, (B) are covered by insurance policies or (C) otherwise do not involve the payment of money in excess of $150,000 in the aggregate, in each case where the settlement, compromise, discharge or satisfaction of which does not include any obligation to be performed by the Company or its Subsidiaries following the Effective Time;
(xv) enter into any Contract or arrangement between the Company or any of its Subsidiaries, on the one hand, and any Affiliates of Company (other than its Subsidiaries), on the other hand;
(xvi) fail to use reasonable best efforts to maintain in full force and effect the existing insurance policies or to replace such insurance policies with reasonably comparable insurance policies, to the extent available on commercially reasonable terms, covering the Company, its Subsidiaries and their respective properties, assets and businesses;
(xvii) form any new joint ventures or materially modify the terms of any existing joint ventures with third parties;
(xviii) amend or modify the compensation terms or any other obligations of Company contained in the engagement letter with JMP Securities LLC in a manner adverse to Company or any of its Subsidiaries or the Surviving Entity or engage other financial advisers in connection with the transactions contemplated by this Agreement;
(xix) other than in the ordinary course of business consistent with past practice, initiate or consent to (A) any material zoning reclassification of any Owned Real Property or Leased Real Property or (B) any material change to any approved site plan, special use permit, planned unit development approval or other land use entitlement affecting any Owned Real Property or Leased Real Property;
(viiixx) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; , enter into, renew, modify, amend or terminate, or waive, release, compromise or assign any material rights or claims under, any Material Real Property Lease (Bor any lease for real property that, if existing as of the date of this Agreement, would be a Material Real Property Lease) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; other lease of real property with a term in excess of one year;
(Cxxi) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise other than in the ordinary course of business consistent with past practice; , sell, license, mortgage, pledge, assign, transfer, dispose of, abandon, or encumber, or effect a deed in lieu of foreclosure with respect to, any Owned Real Property or other property or assets (Dexcept for Permitted Liens), in each case, with an individual value greater than $100,000 (or, in the case of Intellectual Property, that is material to the Company);
(xxii) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit new line of any of its directors, officers or employeesbusiness;
(xiixxiii) change (A) purchase any accounting policies “non-core” asset or procedures right (includinge.g., without limitationmineral rights, procedures surface rights, multifamily or other developed residential or commercial property, real property held primarily for the purpose of resource extraction, groundwater leases or timberland assets) or any other asset or right not purchased in furtherance of the Company and its Subsidiaries’ core community development business or (B) invest or spend or commit to invest or spend any amounts with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) such “non-core” assets other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements as may reasonably be required in the ordinary course of business that involve only consistent with past practice or to preserve the payment value of non-material amounts of cash and no admission being made with respect such assets or to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rightsprepare them for sale;
(xvxxiv) fail to maintain in full force and effect all material insurance policies currently in effectmake, authorize, enter into any commitment for, or permit make a capital contribution to any Joint Venture for, any new capital expenditure (such new capital expenditures being referred to hereinafter as the “Capital Expenditures”), other than Capital Expenditures in the ordinary course of the coverage thereunder business consistent with past practice for continuation of development of existing phases of Owned Real Property and JV Owned Real Property currently under construction and in an amount not to lapseexceed, in each case without simultaneously securing replacement insurance policies case, 110% of the aggregate budgeted amount for the applicable quarter as reflected in the applicable property level budget of the Company, copies of which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying are attached as a reorganization within the meaning of Section 368(a6.1(b)(xxiv) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing DateDisclosure Letter; or
(xviiixxv) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement a Contract to do any of the foregoing. Notwithstanding anything contained herein to the contraryforegoing or make any formal or informal arrangement or understanding, Parent's consent shall whether or not be required binding, with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 SECTION 5.01 Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between the date hereof of this Agreement and the earlier to occur of the Effective Time or such earlier time as and the termination of this Agreement is terminated in accordance with Article VII its terms (such period being hereinafter referred to as the "Interim “Pre-Closing Period"”), except as expressly required contemplated by this Agreement or unless Parent as set forth in Section 5.01 of the Company Disclosure Schedule, the Company shall otherwise consent in writing, which consent and shall not be unreasonably withheld, each cause the Company Subsidiaries to conduct the businesses of the Company and its Subsidiaries:
(i) shall conduct its business only the Company Subsidiaries in all material respects in the ordinary course of business, business consistent with past practice; (ii) shall not take any actionpractice and, or fail to take any actionthe extent consistent therewith, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to (i) preserve substantially intact its the business organizationorganization of the Company and the Company Subsidiaries, properties (ii) continue to employ the executive officers and assetsKey Employees of the Company on commercially reasonable terms, keep available the services of their officers, employees and consultants and (iii) maintain in effect all necessary licenses, permits, consents, franchises and approvals and authorizations, and (iv) maintain relationships of the Company Material Contractsand the Company Subsidiaries with its customers, suppliers, lenders and other persons with which the Company or any Company Subsidiary has material business relations and, subject to Section 6.06, with Governmental Authorities having jurisdiction over it business and operation, in each case substantially as favorable to the Company and the Company Subsidiaries as such relationship is as of the date of this Agreement. By way of amplification and not limitation, except Except as expressly permitted contemplated by any other provision of this Agreement, as set forth in Section 5.01 of the Company Disclosure Schedule or as required by applicable Law, neither the Company nor any of its Subsidiaries shall Company Subsidiary shall, during the Interim Pre-Closing Period, directly or indirectly, do any of the following without the prior written consent of Parent, which consent (other than with respect to (b), (c) or (e)(ii) of this Section 5.01) shall not be unreasonably withheld, conditioned or delayed:
(ia) amend or otherwise change its Certificate certificate of Incorporationincorporation, Bylaws bylaws or other equivalent similar organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(iib) issue, sell, grant, award, dispose of, transfer, pledgeexclusively license, dispose of encumber (other than Permitted Liens), or encumber authorize such issuance, sale, grant, award, disposition, transfer, exclusive license or encumbrance of, (i) any shares of any class of share capital stock of the Company or any classCompany Subsidiary, or any Performance Units, options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stocksuch share capital, or any other ownership interest Equity Interests, of the Company or any Company Subsidiary (except for the issuance of Shares issuable pursuant to Company Stock Options that are outstanding on the date of this Agreement pursuant to the terms of the applicable Company Stock Option as in effect immediately prior to the date of this Agreement), or (ii) any of its material properties, assets, licenses, operations, rights, product lines, businesses or interests therein (including Intellectual Property) except, in the case of clause (ii), (A) in the ordinary course of business, (B) pursuant to Contracts as in force on the date of this Agreement, or (C) such dispositions among the Company and the Company Subsidiaries;
(iiic) declare, set aside, make or pay any dividend or other distribution, payable in cash, shares, property or otherwise, with respect to any of its share capital, except for dividends or other distributions by any direct or indirect wholly-owned Company Subsidiary to the Company or any other direct or indirect wholly-owned Company Subsidiary and regular semiannual dividends on Shares declared in cash at times and in amounts consistent with past practice;
(d) reclassify, combine, split, subdivide or redeem, repurchase or purchase or otherwise acquire, directly or indirectly, any shares of share capital stock of the Company or interest in or securities of any of its SubsidiariesCompany Subsidiary;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiii) acquire (including by amalgamation, merger, consolidation, or acquisition of stock equity interests or assets or otherwiseany other business combination) any company, corporation, limited liability company, partnership, joint venture or other business organization (or any division thereof;
), (ixii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases borrowings under existing credit facilities as in salary or wages in accordance with agreements entered into effect immediately prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse endorse, or otherwise as an accommodation become responsible for for, the obligations of any Personperson, (iii) enter into, amend, waive, renew or make terminate any loans, advances Material Contract (or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit other Contract that would be deemed to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements a Material Contract if it had been entered into prior to the date of this Agreement; ), other than in the ordinary course of business, or (Biv) authorize, or make any commitment with respect to, capital expenditures that in the aggregate exceed by 10% the aggregate amount of the annual capital expenditures budget of the Company and the Company Subsidiaries, taken as a whole (a copy of which has been previously provided to Parent, other than in the ordinary course of business);
(f) except as otherwise required under any plan, program, policy, agreement, collective bargaining agreement or other arrangement in existence as of the date of this Agreement, (i) increase the compensation payable or to become payable or the benefits provided to its directors, officers or employees, except for increases in base salary or wages in the ordinary course of business, (ii) grant or take any additional action to accelerate the vesting or payment of any equity awards or retention, severance or termination pay to, or enter into any employment or severance agreements withemployment, its officers; (C) grant any severance or termination pay tobonus, or enter into any employment indemnification, change of control or severance agreement with, any director, officer or other employee of the Company or of any Company Subsidiary, except for the award of cash bonus incentive awards containing all of terms, and made in accordance with agreements entered with, the provisions set forth in subparagraph (f) of Section 5.01 of the Company Disclosure Schedule, (iii) establish, adopt, enter into, terminate or amend any Plan, or establish, adopt or enter into before any plan, agreement, program, policy, trust, fund or other arrangement that would be a Plan if it were in existence as of the date of this Agreement; , for the benefit of any director, officer or employee except as required by Law, (Div) loan or advance any money or other property to any current or former director, officer or employee of the Company or the Company Subsidiaries or (v) enter into any collective bargaining agreement; , memoranda of understanding, side letter agreements or (E) establishother Contract with any labor organization, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employeesthe foregoing;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xvg) fail to maintain in full force and effect all the existing insurance policies currently in effect(or alternative policies with comparable terms and conditions) covering the Company and the Company Subsidiaries and their respective properties, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force assets and effect and provide coverage substantially similar to or greater than under the prior insurance policiesbusinesses;
(xvih) take settle any action Action other than settlements involving not more than $500,000 in the aggregate (net of insurance proceeds) and that (without regard to do not require any action taken, actions or agreed to be taken, by Company impose any material restrictions on the business or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) operations of the Code;
Company and the Company Subsidiaries (xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any or, after the Effective Time, of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in Affiliates);
(i) make, change or revoke any material Tax election, change an annual Tax accounting period, adopt or change any material Tax accounting method, file any material amended Tax Return, enter into any material closing agreement with respect to Taxes, settle any material Tax claim, audit, assessment or dispute, surrender any right to claim a refund of a material amount of Taxes or (Bii) file any U.S. federal income Tax Return relating to the Company or any of the conditions Company Subsidiaries that has been prepared in a manner that is inconsistent with the past practices of the Company or such Company Subsidiary, provided that, the Company will not file any U.S. federal income Tax Return without providing Parent with a draft form of such Tax Return at least fifteen (15) Business Days before filing to the Closing set forth in Article VI of this Agreement extent then available or, if not being satisfied in any material respect then available, as of the Closing Datepromptly as practicable once available;
(xviiij) waiveexcept as required by GAAP, release applicable Law or assign any rights Governmental Authority, make any material change in financial accounting methods, principles or claims under practices used by the Company or any Parent Material Contract Company Subsidiary;
(k) authorize or enter into adopt, or extend publicly propose, a plan or agreement of complete or partial liquidation or dissolution of the Company or any lease with respect to real propertyCompany Subsidiary; or
(xixl) authorizeagree, recommend, proposeresolve, announce or an intention, enter into any agreementformal or informal agreement or otherwise make a commitment, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Merger. SECTION 4.1 Conduct of Business of by the Company Pending the Merger.
(a) The . Each of the Company and the Stockholder covenants and agrees that, between during the period from the date hereof of this Agreement and continuing until the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by termination of this Agreement or the Effective Time, unless Parent shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, each of the Company shall, and its Subsidiaries:
(i) the Stockholder shall cause the Company to, conduct its business only and shall cause the businesses of its subsidiaries to be conducted in all material respects in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) the Company shall, and the Stockholder shall cause the Company to, use its all reasonable best commercial efforts to preserve substantially intact the business organization of the Company and its business organizationsubsidiaries taken as a whole, properties and assets, to keep available the services of their the present key officers, employees and consultants of the Company and maintain in effect all its subsidiaries taken as a whole and to preserve the present relationships of the Company Material Contractsand its subsidiaries with customers, suppliers and other persons with which the Company or any of its subsidiaries has significant business relations. By way of amplification and not limitation, except as expressly permitted contemplated by this Agreement, neither the Company nor any of its Subsidiaries subsidiaries shall, and the Stockholder shall cause the Company not to, during the Interim Periodperiod from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, directly or indirectlyindirectly do, do or propose to do, any of the following without the prior written consent of Parent:
(ia) amend its or otherwise change the Certificate of Incorporation, Bylaws Incorporation or other equivalent organizational documents, By-Laws of the Company or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwiseany of its subsidiaries;
(iib) issueissue (except for the issuance of shares upon the exercise of any outstanding stock options), sell, transfer, pledge, dispose of or encumber encumber, or authorize the issuance (except for the issuance of shares upon the exercise of any outstanding stock options), sale, pledge, disposition or 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 of (including, without limitation, any phantom interest) in the Company or any of its Subsidiaries;subsidiaries.
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(ivc) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment assets of the Company or other assets, any of its subsidiaries (except for (i) sales of assets in the ordinary course of business and in a manner consistent with past practicepractice and (ii) dispositions of obsolete or worthless assets);
(vi) declare, set aside aside, make or pay any dividend or other distribution (whether in cash, stock or other securities or property, property or any combination thereof) in respect of any of its capital stock or other equity interests (stock, except that a wholly owned Subsidiary subsidiary of the Company may declare and pay a cash dividend to the Company);
its parent, (viii) split, combine or reclassify any shares of its capital stock or other securities issue or equity interests, authorize or issue propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock stock, or equity interests(iii) amend the terms or change the period of exercisability of, purchase, repurchase, redeem or otherwise acquire, or permit any subsidiary to purchase, repurchase, redeem or otherwise acquire, any of its securities or any securities of its subsidiaries, including, without limitation, shares of Company Common Stock or any option, warrant or right, directly or indirectly, to acquire shares of Company Common Stock, including the Stock Options, except with respect to Stock Options, to the extent the Company may be otherwise contractually required, or enter into any agreement to do any of the foregoing;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viiii) acquire (by merger, consolidation, or acquisition of stock or assets assets) any business or otherwise) any corporation, limited liability company, partnership, joint venture partnership or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practicedivision; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for for, the obligations of any Personperson, except in each case in the ordinary course of business consistent with past practice, or make any loans, advances loans or advances; (iii) enter into or amend any financial commitments;
contract or agreement other than in the ordinary course of business; (ixiv) authorize any capital expendituresexpenditures or purchase of fixed assets which are, in the aggregate, in excess of $100,000 for the Company and its subsidiaries taken as a whole; or (v) enter into or amend any contract, agreement, commitment or arrangement to effect any of the matters prohibited by this Section 4.1(e);
(x) take or permit to be taken any action to: (Ai) increase the compensation payable or to become payable to its officers executive officers, directors or employees, employees except for increases in salary or wages in accordance the ordinary course of business consistent with agreements entered into prior to the date of this Agreementpast practice; (Bii) grant any additional severance or termination pay to, or enter into any new employment or severance agreements with, any director, executive officer or current employee of the Company or its officerssubsidiaries; (Ciii) grant any severance or termination pay to, or enter into any employment or severance agreement with, with any employee new employees of the Company or its subsidiaries except in accordance the ordinary course of business consistent with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreementpast practice; or (Eiv) establish, adopt, enter into or amend in any material respect any bonuscollective bargaining, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, compensation or severance or other plan, trust, fund, fund or policy or arrangement for the benefit of any of its current or former directors, officers or employeesemployees of the Company or any of its subsidiaries, except, in each case, as may be required by law;
(xig) except as required under generally accepted accounting principles, take any action to change in any material respect the accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable) of the Company or any subsidiary (except in the case of subsidiaries to conform to the Company's policies and procedures), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiiih) make any Tax tax election inconsistent with past practice or settle or compromise any material federal, state, local or foreign Tax liability, tax liability or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapselimitations, in each case without simultaneously securing replacement insurance policies which will would be in full force material to the Company and effect and provide coverage substantially similar to or greater than under the prior insurance policiesits subsidiaries taken as a whole;
(xvii) take pay, discharge or satisfy any action that claims, liabilities or obligations (without regard absolute, accrued, asserted or unasserted, contingent or otherwise) material to any action taken, or agreed to be taken, by the Company or any of and its affiliates) could be considered reasonably likely to prevent the Merger from qualifying subsidiaries taken as a reorganization within whole, other than the meaning payment, discharge or satisfaction in the ordinary course of Section 368(a) business and consistent with past practice of liabilities reflected or reserved against in the Code;
(xvii) take any action or fail financial statements contained in the Company SEC Reports filed prior to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III date of this Agreement becoming untrue or incurred in any material respect or (B) any the ordinary course of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease business and consistent with respect to real propertypast practice; or
(xixj) authorizetake, recommendor agree in writing or otherwise to take, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingactions described in Sections 4.1 (a) through (i) above.
Appears in 1 contract
Samples: Merger Agreement (Registry Inc)
Conduct of Business Pending the Merger. 4.1 SECTION 5.1. Conduct of Business of by the Company Pending the Merger.
(a) The Company covenants and agrees that, between . From ----------------------------------------------------- the date hereof and the earlier of this Agreement to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")Time, except as expressly required contemplated by this Agreement or unless Parent as set forth in Schedule 5.1, the Company shall, and shall otherwise consent in writing, which consent shall not be unreasonably withheld, cause each of the Company and its Subsidiaries:
, to (i) shall conduct carry on its business only respective businesses in the ordinary course of businesscourse, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its current business organization, properties organizations and assets, keep available the services of their officersits current officers and key employees, employees (iii) use reasonable efforts to preserve its relationships with customers, suppliers and consultants other Persons with which it has business dealings, (iv) use reasonable efforts to comply in all material respects with all laws and regulations applicable to it or any of its properties, assets or business and (v) use reasonable efforts to maintain in full force and effect all the Company Material ContractsPermits necessary for such business, provided however that the foregoing shall not prevent the Company from borrowing under its existing credit agreements to satisfy any of its obligations to holders of Options under Section 2.9(a) hereof. By way Without limiting the generality of amplification and not limitationthe foregoing, except as (x) expressly permitted contemplated by this AgreementAgreement or (y) set forth in Schedule 5.1, neither the Company nor any of its Subsidiaries shall not, during the Interim Period, directly or indirectly, do any and shall cause each of the following without the prior written consent of ParentSubsidiaries not to:
(ia) amend its Certificate of IncorporationIncorporation or By-Laws or similar organizational documents or, Bylaws or other equivalent organizational documentsin the case of the Company, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwisechange the number of directors constituting its entire board of directors;
(iii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(vA) declare, set aside or pay any dividend or other distribution (whether payable in cash, stock or other securities property with respect to its capital stock, except that a wholly owned Subsidiary may declare and pay a dividend or propertymake advances to its parent or the Company or (B) redeem, purchase or any combination thereof) in respect of otherwise acquire, directly or indirectly, any of its capital stock or other equity interests securities; (except that a wholly owned Subsidiary ii) issue, sell, pledge, dispose of or encumber any (A) additional shares of its capital stock, (B) securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock, or (C) of its other securities, other than Shares issued upon the Company may declare and pay a cash dividend to exercise of Options outstanding on the Company);
date hereof in accordance with the Option Plans as in effect on the date hereof; or (viiii) split, combine or reclassify any shares of its outstanding capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interestsstock;
(viic) sellacquire or agree to acquire (A) by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof (including entities which are Subsidiaries) or (B) any assets, including real estate, except, with respect to both of clause (A) and (B) above, (x) purchases of inventory, equipment and supplies in the ordinary course of business consistent with past practice and (y) other purchases in the ordinary course of business consistent with past practice in an amount not involving, in the aggregate, more than $5 million for acquisitions in the United States and Canada and $2 million for acquisitions outside the United States and Canada;
(d) authorize or make capital expenditures in the aggregate in excess of $4 million;
(e) except in the ordinary course of business, amend or terminate any Company Material Contract, or waive, release or assign any material rights or claims thereunder;
(f) transfer, lease, license, sublicensesell, mortgage, pledge, dispose of, encumberor encumber any material property or material assets other than (i) excess or obsolete assets or (ii) in the ordinary course of business and consistent with past practice;
(i) except in accordance with the existing policies of the Company, enter into any employment or severance agreement with or, grant any severance or otherwise dispose termination pay to any officer or director of the Company or any Subsidiary; or (ii) hire or agree to hire any new or additional corporate officers;
(h) except as required to comply with the terms hereof or applicable law or as disclosed in any SEC Report or Schedule 5.1, (A) adopt, enter into, terminate, amend or increase the amount or accelerate the payment or vesting of any Company Intellectual Property, material benefit or amend award or modify in any material respect any existing agreements with respect to amount payable under any Company Intellectual Property Employee Benefit Plan or other arrangement for the current or future benefit or welfare of any director, officer, former employee or, other than in the ordinary course of business consistent with past practice;
, current employee, (viiiB) acquire (by mergerincrease in any manner the compensation or fringe benefits of, consolidationor pay any bonus to, acquisition of stock or assets or otherwise) any corporationdirector, limited liability companyofficer or, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice, employee, (C) other than benefits accrued through the date hereof and other than in the ordinary course of business for employees other than officers or directors of the Company, pay any benefit not provided for under any Benefit Plan, (D) other than bonuses earned through the date hereof and other than in the ordinary course of business for employees other than officers and directors, grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Company Employee Benefit Plan; provided that there shall be no grant or award to any director, officer or employee of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or any removal of existing restrictions in any Company Employee Benefit Plans or agreements or awards made thereunder or (E) take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or arrangement or Company Employee Benefit Plan;
(i) except in connection with any acquisition permitted pursuant to this Section 5.1 or to satisfy its obligations to holders of Options pursuant to Section 2.9(a) hereof, or as disclosed on Schedule 5.1, incur or assume any long-term debt, or except in the ordinary course of business in amounts consistent with past practice, incur or assume any short-term indebtedness; (Bii) grant incur or modify any additional severance material indebtedness or termination pay other liability; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; or (iv) except for advances or prepayments in the ordinary course of business in amounts consistent with past practice, make any loans, advances or capital contributions to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement withinvestments in, any employee except other Person (other than to wholly owned Subsidiaries or customary loans or advances to employees in accordance with agreements entered into before past practice);
(j) change of the date of this Agreement or otherwise accounting methods used by it unless required by generally accepted accounting principles;
(k) other than in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in make any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xivi) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy settle or settle compromise any material claim, litigation or waive, assign or release any rights or claims with respect theretoother legal proceeding, other than settlements in the ordinary course of business that involve only consistent with past practice in an amount not involving more than $1 million or (ii) pay, discharge or satisfy any other material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment payment, discharge or satisfaction of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing such other claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or (B) of any such other claims, liabilities or obligations reflected or reserved against in, or contemplated by, the invalidity consolidated financial statements (or unenforceability the notes thereto) of the Company;
(m) except in the ordinary course of business consistent with past practice, waive the benefits of, or agree to modify in any infringement with respect tomanner, any confidentiality, standstill or similar agreement to which the Company Intellectual Property Rightsor any Subsidiary is a party;
(xvn) fail to maintain in full force and effect all permit any material insurance policies currently policy naming the Company or any Subsidiary as a beneficiary or a loss payable payee to be canceled or terminated without notice to Parent, except in effect, the ordinary course of business and consistent with past practice or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policiesconnection with replacing such policy with a policy providing comparable coverage;
(xvio) take any action that (without regard to any action takenwhich, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail omit to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) action, the omission of which, would make any of the representations and or warranties of the Company set forth contained in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied and incorrect in any material respect as of the Closing Datedate when made if such action or omission had then been made, or would result in any of the conditions set forth in Annex I hereto or the conditions set forth in Article VII hereof not being satisfied; or
(xviiip) authorize, recommend, propose, announce or enter into any an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, propose or announce or enter into any agreement, contract, commitment or arrangement an intention to do any of the foregoing.
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 Conduct of Business Move has agreed that, from the date of the Company Pending the Merger.
(a) The Company covenants and agrees that, between the date hereof and Merger Agreement until the earlier to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")termination of the Merger Agreement, except as expressly required by this the Merger Agreement, disclosed prior to execution of the Merger Agreement in Move’s confidential disclosure letter, agreed in writing by Parent or unless Parent shall otherwise consent in writingas required by law, which consent shall not be unreasonably withheldMove will, and will cause each of the Company and its Subsidiaries:
subsidiaries to, (i) shall conduct its their respective business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, keep available the services of their officers, employees and consultants and maintain in effect all Company Material Contracts. By way of amplification and not limitation, except as expressly permitted by this Agreement, neither the Company nor any of its Subsidiaries shall , during the Interim Period, directly or indirectly, do any of the following without the prior written consent of Parent:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except operations in the ordinary course of business consistent with past practice;
, (vii) declareuse their respective reasonable best efforts to (A) preserve substantially intact their respective business organization, set aside or pay any dividend or other distribution (whether B) preserve their respective material assets, rights and properties in cashgood repair and condition, stock or other securities or property(C) preserve satisfactory business relationships and goodwill with their respective material customers, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare advertisers, suppliers, licensors, licensees, distributors, wholesalers, lessors and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements others having business dealings with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize subsidiaries, and any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business governmental entity that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent has jurisdiction over Move or any of its affiliatessubsidiaries, and (D) could be considered reasonably likely to prevent the Merger from qualifying as prepare and file any required regulatory filings on a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, timely basis consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organizationcomply in all material respects with all applicable laws. Move has further agreed that, properties from the date of the Merger Agreement until the earlier of the Effective Time and assets, and keep available the services termination of their officers, employees and consultants. By way of amplification and not limitationthe Merger Agreement, except as (i) disclosed prior to execution of the Merger Agreement in Move’s confidential disclosure letter, (ii) expressly permitted required by this the Merger Agreement, the (iii) required by applicable law or (iv) consented to in writing by Parent shall (which consent may not be unreasonably withheld, conditioned or delayed), Move will not, during the Interim Periodand will cause its subsidiaries not to, directly among other things and subject to specified exceptions (including specified ordinary course exceptions): • issue, deliver or indirectly, do sell any of the following without the prior written consent securities of the Company:
(i) amend its Certificate , other than Shares issuable upon exercise of Incorporationthe options or settlement of RSUs, Bylaws or other equivalent organizational documentsin each case outstanding on the date of the Merger Agreement and in accordance with their terms as of the date of the Merger Agreement; • repurchase, redeem or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose acquire any securities of or encumber any shares of capital stock of any class, the Company or any options, warrants, convertible securities warrants or other rights of any kind to acquire any shares of capital stock, or any other ownership interest of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreementsuch securities;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Offer to Purchase (News Corp)
Conduct of Business Pending the Merger. 4.1 Section 5.01 Conduct of Business of by the Company Pending the Merger.
(a) . The Company covenants and agrees that, between on and from the date hereof and of this Agreement until the earlier to occur of the Effective Time or such earlier time as and termination of this Agreement is terminated in accordance with pursuant to Article VII (such period being hereinafter referred to as the "Interim Period")VIII, except as expressly required by applicable Law or specifically permitted by this Agreement or Agreement, unless Parent shall otherwise consent in writing, writing (which consent shall not be unreasonably withheld, each of the Company and its Subsidiaries:
delayed or conditioned), (i) the businesses of the Group Companies shall conduct its business only be conducted in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, business consistent with past practice; and (iiiii) the Company shall use its reasonable best efforts to preserve substantially intact its the assets and the business organizationorganization of the Group Companies, properties and assets, to keep available the services of their officers, the current officers and key employees of the Group Companies and consultants and to maintain in effect all Company Material Contractsmaterial respects the current relationships of the Group Companies with existing customers, suppliers and other persons with which any Group Companies has material business relations as of the date hereof. By way Without limiting the generality of amplification the foregoing, from the date of this Agreement until the earlier of the Effective Time and not limitationtermination of this Agreement pursuant to Article VIII, except as expressly required by applicable Law or specifically permitted by this Agreement, neither the Company nor any of its Subsidiaries shall not, during the Interim Periodand shall procure that no Group Company will, directly or indirectly, do or propose to do any of the following without the prior written consent of Parent:Parent (which consent shall not be unreasonably withheld, delayed or conditioned):
(ia) amend or otherwise change its Certificate memorandum and articles of Incorporation, Bylaws association or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(iib) issue, sell, transfer, pledgelease, dispose of or encumber any shares of capital stock of any classsublease, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest of the Company or any of its Subsidiaries;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of its Subsidiaries;
(iv) sell, transferlicense, pledge, dispose of, grant or encumber, or authorize the issuance, sale, transfer, lease, sublease, license, pledge, disposition, grant or encumbrance of, (i) any shares of any class of any Group Company (other than in connection with (A) the exercise of Warrants in accordance with the Warrant Agreement, (B) the vesting of any Performance Shares in accordance with the Company Share Plan, (C) the withholding of Company securities to satisfy tax obligations with respect to Performance Shares or encumber Phantom Shares (D) the acquisition by the Company of its securities in connection with the forfeiture of Warrants or Performance Shares, or (E) the acquisition by the Company of its securities in connection with the net exercise of Warrants in accordance with the terms of the Warrant Agreement, (ii) any property or assets (whether real, personal or mixed, and including leasehold interests and intangible property) of any Group Company with a value or purchase price (including the value of assumed liabilities) in excess of US$10,000,000, except in the ordinary course of business, or (iii) any material properties, facilities, equipment Intellectual Property owned by or other assetslicensed to any Group Company, except in the ordinary course of business consistent with past practice;
(vc) declare, set aside aside, make or pay any dividend or other distribution (whether distribution, payable in cash, stock shares, property or other securities or propertyotherwise, or any combination thereof) in with respect of to any of its capital stock shares (other than dividends or other equity interests (except that a wholly owned distributions from any Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or credit agreement to which the Company or any of its other Subsidiaries is a party as of the date of this Agreement;
(x) authorize any capital expenditures in excess of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees);
(xiid) change any accounting policies reclassify, combine, split, subdivide or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liabilityredeem, or agree to an extension of a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase purchase or otherwise acquire, directly or indirectly, any shares of its share capital stock or securities or other rights exchangeable into or convertible or exercisable for any of its share capital (other than the purchase of Shares, Warrants or Performance Shares to satisfy obligations under the Warrant Agreement or Warrants or Company Share Plan, including the withholding of Shares, Warrants or Performance Shares in connection with the exercise of (i) Warrants in accordance with the terms and conditions of the Parent or interest Warrant Agreement and (ii) Performance Shares in or securities accordance with the terms and conditions of any Subsidiary of Parentsuch Performance Shares);
(ive) selleffect or commence any liquidation, transferdissolution, pledgescheme of arrangement, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, amalgamation, restructuring, reorganization, public offering or similar transaction involving any Group Company, or create any new Subsidiary, other than the Transactions;
(f) acquire, whether by purchase, merger, spin off, consolidation, scheme of arrangement, amalgamation or acquisition of stock or assets or otherwise, any assets, securities or properties, in aggregate, with a value or purchase price (including the value of assumed liabilities) in excess of US$10,000,000 in any transaction or related series of transactions;
(g) make any capital contribution or investment in any corporation, limited liability company, partnership, joint venture or other business organization or any division thereofthereof in excess of US$10,000,000 in aggregate;
(viiih) incur issue or grant any indebtedness for borrowed money Performance Shares, Phantom Shares or issue awards of other types to any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for person under the obligations of any Person, or Company Share Plan; (i) make any loanschanges with respect to financial accounting policies or procedures, advances including changes affecting the reported consolidated assets, liabilities or enter into any financial commitmentsresults of operations of the Group Companies, except as required by changes in statutory or regulatory accounting rules or IFRS or regulatory requirements with respect thereto;
(ixj) authorize enter into, amend, modify, consent to the termination of, or waive any capital expenditures;
material rights under, any Material Contract (x) take or permit to any Contract that would be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements a Material Contract if such Contract had been entered into prior to the date hereof);
(k) commence any Action for a claim of this Agreement; more than US$10,000,000 (excluding any Action seeking for an injunctive relief or other similar equitable remedies) or settle, release, waive or compromise any pending or threatened Action of or against any Group Company (A) for an amount in excess of US$10,000,000, (B) grant that would impose any additional severance material restrictions on the business or termination pay tooperations of any Group Company, or (C) that is brought by or on behalf of any current, former or purported holder of any share capital or debt securities of any Group Company relating to the Transactions;
(l) fail to make in a timely manner any filings or registrations with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(m) engage in the conduct of any new line of business material to the Company and its Subsidiaries, taken as a whole;
(n) make or change any material Tax election, amend any Tax Return, enter into any employment closing agreement or severance agreements with, its officers; (C) grant seek any severance or termination pay to, or enter into ruling from any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures Governmental Authority with respect to reservesmaterial Taxes, revenue recognitionsurrender any right to claim a material refund of Taxes, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise finally resolve any material federalcontroversy with respect to Taxes, state, local or foreign Tax liability, or agree to an extension or waiver of a the statute of limitations with respect theretoto the assessment or determination of material Taxes, change any method of Tax accounting or Tax accounting period, initiate any voluntary Tax disclosure to any Governmental Authority, or incur any material amount of Taxes outside of the ordinary course of business;
(xivo) payannounce an intention, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreementformal or informal agreement or otherwise make a commitment, contract, commitment or arrangement to do any of the foregoing.
Appears in 1 contract
Samples: Merger Agreement (TDCX Inc.)
Conduct of Business Pending the Merger. 4.1 SECTION 6.01 Conduct of Business of by the Company Pending the Merger.
. Except as set forth in Section 6.01 of the Company Disclosure Schedule, permitted by this Agreement, required by Law, consented to in writing by Parent (asuch consent not to be unreasonably withheld, conditioned or delayed) The Company covenants or for any actions taken reasonably and agrees in good faith in response to COVID-19 or COVID-19 Measures or in connection with the November 3, 0000 Xxxxxx Xxxxxx federal elections and the results thereof, during the period from the date of this Agreement to the Effective Time, (provided that, between for the date hereof and the earlier to occur avoidance of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period")doubt, except as expressly required by set forth in the following paragraph of this Agreement Section 6.01 or unless Parent shall expressly set forth in Section 6.01 of the Company Disclosure Schedule, the Company is not permitted to take any actions in response to COVID-19 or COVID-19 Measures or in connection with the November 3, 0000 Xxxxxx Xxxxxx federal elections and the results thereof that would otherwise consent in writing, which consent shall not be unreasonably withheldpermitted by the following paragraph of this Section 6.01), the Company shall, and shall cause each of its Subsidiaries to (i) use reasonable best efforts to conduct the businesses of the Company and its SubsidiariesSubsidiaries in all material respects in the ordinary course of business; (ii) use commercially reasonable efforts to preserve materially intact its current business organization and to preserve in all material respects its relationships of the Company and its Subsidiaries with significant Franchisees and the franchise system as a whole, key employees and its material suppliers, licensors, licensees, distributors, wholesalers, lessors and others having significant business dealings with the Company or any of its Subsidiaries and (iii) comply in all material respects with applicable Law, and in each case of clauses (i) and (ii); provided that, for the avoidance of doubt, the Company shall not be obligated to take any action that would not be permitted by the following paragraph of this Section 6.01 and the failure to not take any action not permitted by the following paragraph of Section 6.01 shall not be deemed a breach of this sentence of Section 6.01. Without limiting the generality of the foregoing, except as set forth in Section 6.01 of the Company Disclosure Schedule, expressly required by this Agreement, required by Law or Contract, as consented to in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed and shall be deemed to be given if, within five (5) Business Days after the Company has provided to Parent a written request for consent, Parent has not rejected such request in writing), during the period from the date of this Agreement to the Effective Time, the Company shall not, and shall not permit any Subsidiary of the Company to:
(a) declare, authorize, establish a record date for, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or other equity, property or a combination thereof) in respect of, any of its capital stock, other than dividends or distributions by a wholly-owned Subsidiary of the Company to its parent;
(b) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in lieu of or in substitution for shares of its capital stock;
(c) repurchase, redeem or otherwise acquire any shares of its capital stock or any options, warrants, rights, convertible or exchangeable securities, stock-settled performance units or other rights to acquire any such shares or other rights that give the holder thereof any economic interest of a nature accruing to the holders of such shares, other than (i) shall conduct the acquisition by the Company of Shares in connection with the surrender of Shares by holders of Company Stock Options in order to pay the exercise price thereof, (ii) the withholding of Shares to satisfy Tax obligations with respect to awards granted pursuant to the Company Stock Plans, (iii) the acquisition by the Company of Shares pursuant to a repurchase plan that was publicly announced prior to the date hereof and (iv) the acquisition by the Company of Company Stock Options, Restricted Stock Units and Performance Stock Units in connection with the forfeiture of such awards pursuant to their respective terms;
(d) issue, deliver or sell any shares of its capital stock or other voting securities or equity interests, any options, warrants, rights, convertible or exchangeable securities, stock-settled performance units or other rights to acquire any such shares, securities, interests or other rights that give the holder thereof any economic interest of a nature accruing to the holders of such shares or securities, other than (i) upon the exercise or settlement of awards under the Company Stock Plans outstanding on the date of this Agreement (or granted following the date of this Agreement to the extent permitted by this Section 6.01(d)) in accordance with their present terms and (ii) issuances of Restricted Stock Units as set forth on Section 6.01(d) of the Company Disclosure Schedule;
(e) amend the Company Charter or the Company By-laws or the comparable organizational documents of any Subsidiary of the Company;
(f) acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise, (A) any other person (or all or substantially all of the assets of any person) or (B) any assets, real property, securities, properties, interests, or businesses that are material to the Company and its Subsidiaries, taken as a whole, other than (x) transactions between the Company and its wholly-owned Subsidiaries, and (y) purchases of raw materials, supplies, equipment, inventory and third party software in the ordinary course of business only (it being understood and agreed that the acquisition of any other person (or all or substantially all of the assets of any person) is not in the ordinary course of business);
(g) sell, transfer, lease, license, sublicense, abandon or otherwise dispose of any properties or assets that are material to the Company and its Subsidiaries, taken as a whole (including capital stock or other ownership interests of any Subsidiary of the Company and any joint venture to which the Company or any Company Subsidiary is a party and is material to the Company and its Subsidiaries, taken as a whole, and intangible property), other than (i) sales or other dispositions of products and inventory in the ordinary course of business, consistent with past practice; (ii) shall sales or other dispositions of equipment or Intellectual Property that is no longer used in the operations of the Company or any Subsidiary of the Company or (iii) the non-exclusive licensing or sublicensing of Intellectual Property in the ordinary course of business;
(h) (i) incur any indebtedness for borrowed money, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any Subsidiary of the Company or guarantee any such indebtedness or any debt securities of another person or enter into any “keep well” or similar agreement to maintain any financial statement condition of another person (other than the Company or any wholly-owned Subsidiary of the Company) (collectively, “Indebtedness”), other than (A) the incurrence of Indebtedness not take prohibited by the Securitization Agreement in an amount not to exceed $3,000,000 in the aggregate; provided, that any actionsuch Indebtedness is incurred pursuant to one or more borrowings under Class A-1 Notes (as defined in the Securitization Agreement) issued as of the date of this Agreement, (B) intercompany Indebtedness between the Company and a wholly-owned Subsidiary or between wholly-owned Subsidiaries of the Company, in each case, permitted or not prohibited by the Securitization Agreement and the Management Agreement and (C) other than Indebtedness incurred pursuant to Class A-1 Notes in accordance with clause (A), other Indebtedness incurred, assumed or otherwise entered into in the ordinary course of business (including any borrowings under the Company’s existing credit facilities and in respect of letters of credit) permitted by the Securitization Agreement and the Management Agreement in an amount not to exceed $3,000,000 in the aggregate or (ii) make any loans or capital contributions to, or fail investments in, any other person, in an aggregate amount of $3,000,000 or more for all such investments, other than to take any actionwholly-owned Subsidiary of the Company;
(i) except as required by applicable Law or the terms of any Plan currently in effect, except as contemplated by this Agreement, or as otherwise set forth in the Company Disclosure Schedule, (i) increase the compensation, bonus, severance or termination pay payable or that could become payable by the Company or any of its Subsidiaries to any current or former directors or vice presidents or more senior employees, (ii) enter into any employment, consulting, severance, retention or termination agreement or arrangement with any director or executive officer of the Company, (iii) establish, adopt or enter into or amend in any material respect any collective bargaining agreement or other agreement with a labor union, works council or similar organization, (iv) establish, adopt, enter into, materially modify or terminate any Plan other than amendments to such Plan in the ordinary course of business and renewals of Plans that are health, welfare and insurance plans in the ordinary course of business, consistent with past practice; and (iiiv) shall use its reasonable best efforts act to preserve intact its business organizationaccelerate or fund or in any other way secure any rights or benefits under any Plan to the extent not already provided in any such Plan, properties and assets(vi) pay any bonus to any of the current or former directors, keep available the services of their officers, employees and or individual consultants and maintain of the Company or its Subsidiaries, other than annual bonuses payable in effect all respect of fiscal year 2020 (“2020 Annual Bonuses”) as set forth on Section 6.01(i) of the Company Material Contracts. By way Disclosure Schedule, (vii) promote any employee who is an officer to a position more senior than such employee’s position as of amplification and not limitation, except as expressly permitted by the date of this Agreement, neither the Company nor or promote a non-officer employee to an officer position, (viii) grant any new awards under any Plan except as contemplated by Section 6.01(d) of its Subsidiaries shall this Agreement, during the Interim Period(ix) take any action to amend, directly waive or indirectlyaccelerate any rights or benefits under any Plan, do (x) grant, amend or modify any equity or equity-based awards, (x) hire or terminate without cause any vice president or more senior employee, or (xi) forgive any loans, or issue any loans (other than loans under any Plan intended to qualify under Section 401(k) of the following without Code and routine travel and business advances issued in the prior written consent ordinary course of Parent:
(i) amend its Certificate of Incorporationbusiness), Bylaws or other equivalent organizational documentsto directors, officers, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 employees of the Company or any of its Subsidiaries;
(iiij) redeemsettle any Action, repurchase in each case involving or otherwise acquireagainst the Company or any Subsidiary of the Company, directly other than (i) the settlement of Actions that require payments by the Company or indirectlyany Subsidiary of the Company (net of insurance proceeds) in an amount not to exceed, any shares in the aggregate, $4,000,000, (ii) the settlement of capital stock Actions disclosed, reflected or reserved against in the most recent financial statements (or the notes thereto) of the Company included in the SEC Documents for an amount not materially in excess of the amount so disclosed, reflected or reserved and, in each case of clauses (i) and (ii), that do not involve the imposition of restrictions on the business or operations of the Company or interest in or securities of any of its Subsidiaries that, in each case, materially interfere with the operations of the Company and its Subsidiaries, taken as a whole and (iii) settlements permitted pursuant to Section 7.11;
(ivk) sell, transfer, pledge, dispose of or encumber make any material propertieschange in accounting methods, facilitiesprinciples or practices by the Company or any Company Subsidiary materially affecting the consolidated assets, equipment liabilities or results of operations of the Company, except as required (i) by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Financial Accounting Standards Board or any similar organization or (ii) by Law;
(l) (i) adopt a plan of merger, consolidation, complete or partial liquidation, dissolution, restructuring, recapitalization or other assetsreorganization of the Company or any Subsidiary of the Company (other than reorganizations solely by or among wholly-owned Subsidiaries of the Company) or (ii) enter into a new line of business or new franchise system;
(m) change, revoke or rescind any material election relating to Taxes, make any material amendment with respect to any material Tax Return, settle or compromise any material Tax liability for an amount that exceeds the amount disclosed, reflected or reserved against in the financial statements contained in the SEC Documents, request any rulings from or the execution of any closing agreement with any Governmental Authority (except in connection with a settlement of a Tax liability for an amount that does not exceed the amount disclosed, reflected or reserved against in the financial statements contained in the SEC Documents), change an annual accounting period for Tax purposes, or change any material accounting method for Tax purposes, except, in each case, for actions taken in the ordinary course of business consistent with past practiceor required by Law;
(vn) declaremake any capital expenditures, set aside or pay any dividend or other distribution than (whether i) capital expenditures in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of accordance with the annual budget for 2020 provided prior to the date hereof by the Company may declare to Parent, (ii) maintenance capital expenditures and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) sell, transfer, lease, license, sublicense, mortgage, pledge, dispose of, encumber, grant or otherwise dispose of any Company Intellectual Property, or amend or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course of business consistent with past practice;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except required repairs and expenditures in the ordinary course of business and as otherwise permitted under (iii) any loan or credit agreement to which the Company or any of its Subsidiaries is a party as of the date of this Agreement;
(x) authorize any other capital expenditures in excess taken outside of $175,000 in the aggregate;
(xi) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; in an amount not to exceed, in the aggregate, $5,000,000;
(Bo) grant any additional severance voluntarily (i) terminate, materially amend or termination pay tomodify, or enter into waive material rights or material claims under any employment Selected Contract or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (Dii) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xii) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection with the Merger;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of Contract that would have been considered a statute of limitations with respect thereto;
(xiv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, discharge, satisfy or settle any material litigation or waive, assign or release any rights or claims with respect thereto, other than settlements in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement Selected Contract if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements it had been entered into prior to the date of this Agreement; , in each case, other than in the ordinary course of business (B) grant any additional severance or termination pay provided that in all cases the Company shall provide reasonable advance notice to, or and reasonably consult with, Parent prior to taking any such actions described in this clause (o));
(p) enter into any employment material Contract that would, to the Knowledge of the Company, bind Affiliates of the Surviving Company (other than the Company, the Surviving Company or severance agreements Subsidiaries of the Company or the Surviving Company) following the Closing;
(q) (i) fail to use commercially reasonable efforts to renew or maintain insurance policies maintained by the Company or any Company Subsidiary or comparable replacement policies, other than in the ordinary course of business or (ii) form any captive insurance program;
(r) make any material change to the terms of the Company’s or any of its Subsidiaries’ system-wide policies or procedures with respect to (i) franchisee royalty or other fees and charges, or maintenance of the Funds or (ii) franchisee incentives or franchisee economic assistance, in each case, other than in the ordinary course of business (provided that in all cases the Company shall provide reasonable advance notice to, and reasonably consult with, its officers; Parent prior to any taking such material actions in this clause (Cr));
(s) grant except as required by any severance or termination pay toContract entered into, or enter into any employment or severance agreement withand made available to Parent, any employee except in accordance with agreements entered into before prior to the date of this Agreement; (D) enter into , open any collective bargaining agreement; or (E) establish, adopt, enter into or amend restaurant in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for a country where the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent Company Subsidiary does not currently have an owned or franchised restaurant or otherwise engage in any other operations in any country in which the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent Company or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement Company Subsidiary does not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real propertycurrently conduct other operations; or
(xixt) authorizeauthorize any of, recommendor commit or agree to take any of, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoingforegoing actions in the preceding clauses (a) – (q).
Appears in 1 contract
Conduct of Business Pending the Merger. 4.1 Conduct of Business of the Company Pending the Merger.
(a) The Company covenants and agrees that, except as contemplated by this Agreement, between the date hereof of this Agreement and the earlier to occur of Effective Time, unless the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period being hereinafter referred to as the "Interim Period"), except as expressly required by this Agreement or unless Parent Buyer shall otherwise consent agree in writing, which consent shall not be unreasonably withheld, each the Business of the Company and its Subsidiaries:
(i) shall conduct its business be conducted only in the ordinary course of businessCompany, consistent with past practice; (ii) and the Company shall not take any actionaction except in, or fail to take any actionthe usual, except in the regular and ordinary course of businessbusiness and the Company will generally conduct its business in substantially the same way as heretofore conducted, consistent with past practice; and (iii) without limiting the foregoing, the Company will continue to operate in the same geographic markets serving the same market segments. The Company shall use its reasonable best efforts to preserve substantially intact its the business organizationorganization of the Company, properties and assets, to keep available the present services of their the officers, employees and consultants of the Company and to preserve the current relationships and goodwill of the Company with customers, suppliers and other persons with which the Company has business relationships. Without limiting the generality of the foregoing, the Company shall:
(i) maintain in full force and effect all contracts of insurance and indemnity specified in any Schedule hereto;
(ii) repair and maintain all of its tangible properties and assets in effect all accordance with its usual and ordinary repair and maintenance standards;
(iii) continue to apply in full the same rigorous credit review process used by the Company Material Contracts. prior to the Closing in determining the extent to which it will extend credit to customers or potential customers in the ordinary course of business;
(iv) notify the Buyer of any material emergency or other material change in the operation of its business or properties and of any governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated).
(b) By way of amplification and not limitationlimitation of clause (a) above, except as expressly permitted by this Agreement, neither the Company nor any shall not between the date of its Subsidiaries shall , during this Agreement and the Interim PeriodEffective Time, directly or indirectlyindirectly do, do or publicly announce an intention to do, any of the following without the prior written consent of Parent:Buyer through one of its authorized representatives (which representatives shall be each of its Chief Executive Officer, President and Chief Financial Officer):
(i) amend or otherwise change its Certificate of Incorporation, Bylaws Organizational Documents or other By-laws or equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, deliver, sell, transfer, pledge, dispose of, grant, encumber, or authorize the issuance, delivery, sale, pledge, disposition, grant or encumbrance of, any Equity Interests of or encumber any shares of capital stock of any classthe Company, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stocksuch Equity Interests, or any other ownership interest interest, of the Company, or enter into any agreement with respect to any of the foregoing, other than in connection with the Stock Warrant Agreement and upon exercise of the Company or any of its SubsidiariesStock Options;
(iii) redeem, repurchase make any distribution (by way of dividend or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or interest in or securities of any of otherwise) with respect to its SubsidiariesEquity Interests;
(iv) sell, transfer, pledge, dispose of or encumber any material properties, facilities, equipment or other assets, except in the ordinary course of business consistent with past practice;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests (except that a wholly owned Subsidiary of the Company may declare and pay a cash dividend to the Company);
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, Equity Interests or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares its Equity Interests;
(v) repurchase, redeem or otherwise acquire any Equity Interests of its capital stock the Company, or equity interestsany securities convertible into or exercisable for any of the Equity Interests of the Company;
(vi) enter into any new line of business or materially expand the business currently conducted by the Company;
(vii) sellacquire or agree to acquire, transferby merging or consolidating with, lease, license, sublicense, mortgage, pledge, dispose or by purchasing an equity interest in or a portion of the assets of, encumberor by any other manner, grant any business or otherwise dispose of any Company Intellectual Propertycorporation, partnership, other business organization or amend any division thereof or modify in any material respect any existing agreements with respect to any Company Intellectual Property other than in the ordinary course amount of business consistent with past practiceassets;
(viii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(ix) incur any indebtedness for borrowed money money, increase the aggregate amounts owed under the Company's existing credit facilities or issue any debt securities or assume, guarantee (other than guarantees of bank debt of the Company's Subsidiaries entered into in the ordinary course of business) or endorse endorse, or otherwise as an accommodation become responsible for for, the obligations of any Personindividual, corporation or other entity, or make any loans, advances or enter into any financial commitments, except in the ordinary course of business and as otherwise permitted under any loan or advance;
(ix) lower or otherwise alter its credit agreement to which the Company or any of its Subsidiaries is a party card fraud review process (as of the date of this Agreement;more fully described in Exhibit 6.01); ------------
(x) authorize any capital expenditures in excess of more than $175,000 25,000 in the aggregateaggregate (other than expenditure listed on Schedule 6.01(b)(x) and previously approved by Buyer);
(xi) take or permit to be taken any action to: (A) increase (x) adopt, amend, renew or terminate any plan or any agreement, arrangement, plan or policy between the compensation payable to Company and one or more of its current or former directors, officers or employees, except for increases or (y) increase in salary any manner the compensation or wages fringe benefits of any director, officer or employee or pay any benefit not required by any plan or agreement as in accordance with agreements entered into prior to effect as of the date hereof (including, without limitation, the granting of this Agreement stock options, stock appreciation rights, restricted stock, restricted stock units or otherwise in the ordinary course of business consistent with past practiceperformance units or shares); or (B) grant enter into, modify or renew any additional employment, severance or termination pay toother agreement with any director, officer or employee of the Company, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement or otherwise in the ordinary course of business consistent with past practice; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance severance, retention or other plan, agreement, trust, fund, policy or arrangement providing for the any benefit of to any of its directorsdirector, officers officer or employeesemployee;
(xii) change pay any accounting policies bonus or procedures (includingany compensation other than base compensation, without limitation, procedures with respect to reserves, revenue recognition, except for payments of accounts payable bonuses and collection of accounts receivable), unless required by statutory accounting principles or GAAP or in connection other incentive compensation to sales personnel pursuant to and consistent with the Mergerwritten sales incentive plan which has been provided to and approved by Buyer;
(xiii) take any action with respect to accounting methods, principles or practices, other than changes required by applicable law or GAAP or regulatory accounting as concurred in by the Company's independent accountants;
(xiv) make any Tax tax election or settle or compromise any material federal, state, local or foreign Tax tax liability, or agree to an extension of a statute of limitations with respect thereto;
; (xivxv) other than with respect to the Atari litigation set forth in the Company Disclosure Schedules, pay, dischargedischarge or satisfy any claim, satisfy liability or settle any material litigation or waive, assign or release any rights or claims with respect theretoobligation, other than settlements the payment, discharge or satisfaction, in the ordinary course of business that involve only the payment of non-material amounts of cash and no admission being made with respect to (A) any criminal wrongdoing or (B) the invalidity or unenforceability of, or any infringement with respect to, any Company Intellectual Property Rights;
(xv) fail to maintain in full force and effect all material insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Parent or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Company set forth in Article II of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date; or
(xviii) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything contained herein to the contrary, Parent's consent shall not be required with respect to any currently proposed or contemplated business transaction with Take 2.
4.2 Conduct of Business of Parent Pending the Merger.
(a) The Parent covenants and agrees that, during the Interim Period, except as expressly required by this Agreement or unless the Company shall otherwise consent in writing, which consent shall not be unreasonably withheld, the Parent: (i) shall conduct its business only in the ordinary course of business, consistent with past practice; (ii) shall not take any action, or fail to take any action, except in the ordinary course of business, consistent with past practice; and (iii) shall use its reasonable best efforts to preserve intact its business organization, properties and assets, and keep available the services of their officers, employees and consultants. By way of amplification and not limitation, except as expressly permitted by this Agreement, the Parent shall not, during the Interim Period, directly or indirectly, do any of the following without the prior written consent of the Company:
(i) amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter their corporate structure through merger, liquidation, reorganization, restructuring or otherwise;
(ii) issue, sell, transfer, pledge, dispose of or encumber 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 of the Parent; or any of its Subsidiaries, other than pursuant to the transactions contemplated by this Agreement;
(iii) redeem, repurchase or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or interest in or securities of any Subsidiary of Parent;
(iv) sell, transfer, pledge, dispose of or encumber any properties, facilities, equipment or other assets;
(v) declare, set aside or pay any dividend or other distribution (whether in cash, stock or other securities or property, or any combination thereof) in respect of any of its capital stock or other equity interests;
(vi) split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests;
(vii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any corporation, limited liability company, partnership, joint venture or other business organization or division thereof;
(viii) incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person, or make any loans, advances or enter into any financial commitments;
(ix) authorize any capital expenditures;
(x) take or permit to be taken any action to: (A) increase the compensation payable to its officers or employees, except for increases in salary or wages in accordance with agreements entered into prior to the date of this Agreement; (B) grant any additional severance or termination pay to, or enter into any employment or severance agreements with, its officers; (C) grant any severance or termination pay to, or enter into any employment or severance agreement with, any employee except in accordance with agreements entered into before the date of this Agreement; (D) enter into any collective bargaining agreement; or (E) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust, fund, policy or arrangement for the benefit of any of its directors, officers or employees;
(xi) change any accounting policies or procedures (including, without limitation, procedures with respect to reserves, revenue recognition, payments of accounts payable and collection of accounts receivable), unless required by statutory accounting principles or GAAP;
(xii) create, incur, suffer to exist or assume any Lien on any of its properties, facilities or other assets;
(xiii) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability, or agree to an extension of a statute of limitations with respect thereto;
(xiv) pay, discharge, satisfy or settle any litigation or waive, assign or release any rights or claims with respect thereto;
(xv) fail to maintain in full force and effect all insurance policies currently in effect, or permit any of the coverage thereunder to lapse, in each case without simultaneously securing replacement insurance policies which will be in full force and effect and provide coverage substantially similar to or greater than under the prior insurance policies;
(xvi) take any action that (without regard to any action taken, or agreed to be taken, by Company or any of its affiliates) could be considered reasonably likely to prevent the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvii) take any action or fail to take any reasonable action permitted by this Agreement if such action or failure to take action could reasonably be expected to result in either (A) any of the representations and warranties of the Parent or any of its Subsidiaries set forth in Article III of this Agreement becoming untrue in any material respect or (B) any of the conditions to the Closing set forth in Article VI of this Agreement not being satisfied in any material respect as of the Closing Date;
(xviii) waive, release or assign any rights or claims under any Parent Material Contract or enter into or extend any lease with respect to real property; or
(xix) authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any of the foregoing.
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