Conduct of Business Prior to Closing. Prior to the earlier of the Closing or the termination of this Agreement in accordance with Article 8, except as otherwise expressly permitted or required by this Agreement, as otherwise consented to by Parent (such consent not to be unreasonably withheld, conditioned or delayed) or as set forth on Schedule 7.2, the Company shall, and shall cause the other Acquired Companies to, conduct their business in all material respects in the ordinary course of business, consistent with past practices and use their commercially reasonable efforts to (i) preserve intact the Acquired Company’s current business organization, (ii) keep available the services of current officers, employees and agents of the Acquired Companies and (iii) maintain in good state relations and good will with customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents and others having business relationships with the Acquired Companies. Without limiting the generality of the foregoing, prior to the earlier of the Closing or the termination of this Agreement in accordance with Article 8, without the prior consent of Parent (not to be unreasonably withheld, conditioned or delayed), and except as otherwise contemplated by this Agreement or as set forth on Schedule 7.2, the Company shall not, and shall not cause or permit any other Acquired Company to: 7.2.1. increase the compensation (including bonuses) payable on or after the date hereof to any director or officer of such Acquired Company except for increases provided for in any Contracts or plans in effect on the date hereof or in the ordinary course of business consistent with past practices; 7.2.2. adopt or amend any Employee Plan that increases the benefits to any employee, officer or director of an Acquired Company other than in the ordinary course of business or as may be required by applicable law; 7.2.3. enter into any collective bargaining agreement; 7.2.4. issue, sell or otherwise dispose of any capital stock or other Equity Interests or grant any options or other rights to purchase or obtain (including upon conversion, exchange or exercise of other securities) any of its capital stock or other Equity Interests (other than any issuance of Shares upon exercise of any Option in effect on the date hereof and in accordance with the terms thereof); 7.2.5. incur, assume or guarantee any Indebtedness, other than under credit facilities in existence on the date hereof in the ordinary course of business and other than any accrual of interest under any notes in existence on the date hereof, it being understood that any Indebtedness incurred under this Section 7.2.5 shall constitute Refinancing Indebtedness; 7.2.6. voluntarily subject any of the material properties or assets of the Acquired Companies to any Encumbrances (other than Permitted Encumbrances); 7.2.7. make any changes in its methods of accounting or accounting practices or policies (including with respect to reserves) other than those required by GAAP; 7.2.8. enter into any commitment for capital expenditures (including entering into any capital lease) in excess of $250,000 in the aggregate; 7.2.9. declare, set aside or pay any dividend or make any other distribution to any Stockholder other than the payment of cash dividends; 7.2.10. amend its Organizational Documents or effect any stock split, stock combination, stock dividend or similar action; 7.2.11. acquire, sell, lease, license or otherwise dispose of any business or material investment or any material assets, except in the ordinary course of business consistent with past practice or as are required under Contracts in effect on the date hereof; 7.2.12. merge, combine or consolidate with any Person; 7.2.13. make, change or revoke any material Tax election or Tax accounting method; file any income or other material Tax Return; file any material amendment to any material Tax Return; request, or enter into, any ruling, settlement or other compromise with any Taxing Authority; or agree to the extension of the period of time within which any Tax may be assessed; provided, however, in the case of any income or other material Tax Return timely provided to Parent for its review and consent, the Company may (or may cause an Acquired Company, as applicable, to) file any income or other material Tax Return without Parent’s consent if such consent has been unreasonably delayed and if necessary to file any such Tax Return by its due date after taking advantage of any automatic extensions; 7.2.14. enter into any settlement or compromise of any Action if such settlement or compromise would involve the payment by an Acquired Company of more than $100,000 or the imposition of any material non-monetary restrictions upon any Acquired Company; 7.2.15. adopt a plan of complete or partial liquidation, dissolution, restructuring or recapitalization; 7.2.16. pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, any officer, director or Affiliate of any Acquired Company, except for in the ordinary course of business and consistent with past practice; 7.2.17. grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge materially affecting any Leased Real Property or any part thereof; commit any waste or nuisance on any Leased Real Property; or make any material changes in the construction or condition of any Leased Real Property; 7.2.18. terminate or allow to be terminated any insurance policy in effect as of the date hereof, or fail to maintain, with financially responsible insurance companies, insurance on tangible assets of any Acquired Company and on the Business in such amounts and against such risks and losses as are consistent with past practice; 7.2.19. enter into any Contract that if entered into prior to the date hereof would be a Material Company Contract or Customer Contracts or otherwise amend or modify any Material Company Contract or Permit that is material to the Business or waive any material term or condition thereof or grant any consents thereunder; 7.2.20. make any material change to any of the cash management practices of the Business, including but not limited to, discontinue the payment of its accounts payable that are payable in the ordinary course of business or materially deviate from or materially alter any of its practices, policies or procedures in paying accounts payable or collecting accounts receivable; or 7.2.21. agree or commit to do any of the things referred to elsewhere in Section 7.2.1 through 7.2.20 above.
Appears in 1 contract
Conduct of Business Prior to Closing. Prior At all times prior to the earlier of the Closing or the termination of this Agreement Date, unless Buyer otherwise agrees in accordance with Article 8, except as otherwise expressly permitted or required by this Agreement, as otherwise consented to by Parent (such consent not to be unreasonably withheld, conditioned or delayed) or as set forth on Schedule 7.2writing, the Company Sellers shall, and shall cause each of the Company Parties and Blockers to:
(a) operate their respective businesses only in the ordinary course of business;
(b) not transfer, issue, sell, pledge, encumber or dispose of equity interests in the Company Parties or Blockers or grant options, warrants, calls or other Acquired Companies torights to purchase or otherwise acquire equity interests in the Company Parties or Blockers;
(c) not effect any recapitalization, conduct their reclassification, stock split, combination or like change in the capitalization of the Company Parties or Blockers, or amend the terms of any outstanding securities of the Company Parties or Blockers;
(d) not amend the operating agreement, certificate of formation, certificate of incorporation or by-laws or equivalent organizational or governing documents of the Company Parties or Blockers;
(e) not (i) grant, or commit to grant, any increases in compensation or benefits for any of its current or former employees, except (A) as may be required under existing employment agreements, (B) such increases as are granted in the ordinary course of business in all material respects to non-executive management employees, (C) percentage salary increases to executive management employees consistent with the percentage increase granted to non-executive management employees or (D) any stay or similar bonus that either constitutes Company Transaction Expenses or are paid by the Company Parties prior to the Closing, (ii) establish, adopt, enter into or amend any collective bargaining or similar agreement covering any of its employees, any Plan or any other plan, policy, agreement or arrangement for the benefit of any current or former employee, except as required to comply with applicable Governmental Rules or as made in the ordinary course of business, consistent with past practices and or (iii) hire or offer employment to any Specified Individual other than to replace a terminated Specified Individual;
(f) use their commercially reasonable efforts to (i) preserve intact the Acquired Company’s current their respective business organization, (ii) keep available the services of current officers, employees and agents of the Acquired Companies and (iii) maintain in good state relations and good will with customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents and others having business relationships with the Acquired Companies. Without limiting the generality of the foregoing, prior to the earlier of the Closing or the termination of this Agreement in accordance with Article 8, without the prior consent of Parent (not to be unreasonably withheld, conditioned or delayed), and except as otherwise contemplated by this Agreement or as set forth on Schedule 7.2, the Company shall not, and shall not cause or permit any other Acquired Company to:
7.2.1. increase the compensation (including bonuses) payable on or after the date hereof to any director or officer of such Acquired Company except for increases provided for in any Contracts or plans in effect on the date hereof or in the ordinary course of business consistent with past practicesorganizations intact;
7.2.2. adopt or amend any Employee Plan that increases the benefits to any employee, officer or director of an Acquired Company (g) other than in the ordinary course of business or as may be required by applicable law;
7.2.3. enter into any collective bargaining agreement;
7.2.4. issueat the Company Parties' reasonable discretion, sell not sell, license, abandon, fail to maintain, covenant not to assert or otherwise dispose of any capital stock or other Equity Interests or grant any options or other rights to purchase or obtain (including upon conversion, exchange or exercise of other securities) any of its capital stock or other Equity Interests (other than any issuance of Shares upon exercise of any Option in effect on the date hereof and in accordance with the terms thereof)Company IP Rights;
7.2.5. incur, assume or guarantee any Indebtedness(h) (x) in respect of calendar year 2015, other than under credit facilities in existence those set forth on the date hereof in the ordinary course of business and other than any accrual of interest under any notes in existence on the date hereofSchedule 6.03(h), it being understood that any Indebtedness incurred under this Section 7.2.5 shall constitute Refinancing Indebtedness;
7.2.6. voluntarily subject any of the material properties or assets of the Acquired Companies to any Encumbrances (other than Permitted Encumbrances);
7.2.7. make any changes in its methods of accounting or accounting practices or policies (including with respect to reserves) other than those required by GAAP;
7.2.8. not enter into any commitment for capital expenditures (including entering into any capital lease) of Company Parties or Blockers in excess of $100,000 for any individual commitment and $250,000 for all commitments in the aggregate and (y) in respect of calendar year 2016 or thereafter, not enter into any commitment for capital expenditures that are greater than $1,000,000 in any calendar quarter and $3,000,000 in the aggregate in any calendar year;
(i) use commercially reasonable efforts to maintain in full force and effect all Business Permits and insurance policies in such amounts and of such kinds comparable to that in effect on the date of this Agreement;
(j) not terminate, cause the termination of, materially modify or amend, renew or extend any Business Agreement, other than in the ordinary course of business;
(k) not terminate, cause the termination of, materially modify or amend, renew or extend any Material Real Property Lease, unless in each case such action is in the ordinary course of business;
(l) not enter into any contract or agreement providing for the sale of any Owned Real Property;
(m) except for transfers of cash pursuant to normal cash management practices in the ordinary course of business, not make any investments in or loans to any Related Persons;
(n) not enter into or agree to enter into any merger or consolidation with any corporation or other entity, and not engage in any new business or invest in, make a loan, advance or capital contribution to, or otherwise acquire the securities, of any other Person (other than a Subsidiary);
(o) not settle or compromise any pending or threatened Proceeding or any claim or claims for, or that would result in a loss of revenue of, an amount that would, individually or in the aggregate, reasonably be expected to be greater than $100,000;
7.2.9. declare, set aside (p) not cancel or pay compromise any dividend debt or make any other distribution to any Stockholder other than the payment of cash dividends;
7.2.10. amend its Organizational Documents waive or effect any stock split, stock combination, stock dividend or similar action;
7.2.11. acquire, sell, lease, license or otherwise dispose of any business or material investment or release any material assets, right of the Company Parties or Blockers except in the ordinary course of business consistent with past practice or as are required under Contracts in effect on the date hereofbusiness;
7.2.12. merge, combine or consolidate with any Person;
7.2.13. (q) not (i) make, change or revoke any Tax election, settle or compromise any Tax claim or Liability or enter into a settlement or compromise, or change (or make a request to change) any material aspect of its method of accounting for Tax election purposes, (ii) prepare or Tax accounting method; file any income or other material Tax Return; file any material amendment to any material Tax Return; request, or enter into, any ruling, settlement or other compromise with any Taxing Authority; or agree to the extension of the period of time within which any Tax may be assessed; provided, however, in the case of any income or other material Tax Return timely provided to Parent for its review and consent, the Company may (or may cause an Acquired Company, as applicable, toany amendment thereof) file any income or other material Tax Return without Parent’s consent if such consent has been unreasonably delayed and if necessary to file any unless such Tax Return by its due date after taking advantage of any automatic extensions;
7.2.14. enter into any settlement or compromise of any Action if such settlement or compromise would involve the payment by an Acquired Company of more than $100,000 or the imposition of any material non-monetary restrictions upon any Acquired Company;
7.2.15. adopt shall have been prepared in a plan of complete or partial liquidation, dissolution, restructuring or recapitalization;
7.2.16. pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, any officer, director or Affiliate of any Acquired Company, except for in the ordinary course of business and manner consistent with past practice, or (iii) take any action, or allow any action to be taken that would change the entity classification of a Company Party or Blocker for U.S. federal, state, local or non-U.S. tax purposes;
7.2.17. grant (r) not commit or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge materially affecting any Leased Real Property or any part thereof; commit any waste or nuisance on any Leased Real Property; or make any material changes agree in the construction or condition of any Leased Real Property;
7.2.18. terminate or allow to be terminated any insurance policy in effect as of the date hereof, or fail to maintain, with financially responsible insurance companies, insurance on tangible assets of any Acquired Company and on the Business in such amounts and against such risks and losses as are consistent with past practice;
7.2.19. enter into any Contract that if entered into prior to the date hereof would be a Material Company Contract or Customer Contracts or otherwise amend or modify any Material Company Contract or Permit that is material to the Business or waive any material term or condition thereof or grant any consents thereunder;
7.2.20. make any material change to any of the cash management practices of the Business, including but not limited to, discontinue the payment of its accounts payable that are payable in the ordinary course of business or materially deviate from or materially alter any of its practices, policies or procedures in paying accounts payable or collecting accounts receivable; or
7.2.21. agree or commit writing to do any of the things referred foregoing; and
(s) promptly inform Buyer of the occurrence of any Event or the existence of any condition which has had or is likely to elsewhere in Section 7.2.1 through 7.2.20 abovehave a Material Adverse Effect.
Appears in 1 contract
Conduct of Business Prior to Closing. Prior to From the date of this Agreement until the earlier of the Closing or the termination of this Agreement in accordance with Article 8and the Closing Date (the “Pre-Closing Period”), except as otherwise expressly permitted provided in this Agreement or required by this Agreement, as otherwise consented to in writing by Parent Purchaser (such which consent shall not to be unreasonably withheld, conditioned withheld or delayed), Hxxxxx FRC shall (a) or as set forth on Schedule 7.2, conduct the Company shall, Business and shall cause maintain the other Acquired Companies to, conduct their business in all material respects Purchased Assets in the ordinary course of business, consistent with past practices and use their commercially reasonable efforts to (ib) preserve intact the Acquired Company’s current business organization, (ii) keep available the services of current officers, employees and agents of the Acquired Companies maintain its corporate existence and (iiic) maintain in good state relations and good will with customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents and others having business relationships with the Acquired Companiespay or perform its Liabilities when due. Without limiting the generality of the foregoing, prior to the earlier of the Closing or the termination of this Agreement in accordance except with Article 8, without the prior written consent of Parent (not to be unreasonably withheldPurchaser, conditioned or delayed)during the Pre-Closing Period, and except as otherwise contemplated by this Agreement or as set forth on Schedule 7.2, the Company Hxxxxx FRC shall not, and shall not cause or permit any other Acquired Company to:
7.2.1. increase the compensation : (including bonusesi) payable on or after the date hereof to any director or officer of such Acquired Company except for increases provided for in any Contracts or plans in effect on the date hereof or in the ordinary course of business consistent with past practices;
7.2.2. adopt or amend any Employee Plan of its organizational or governance documents in any way that increases would reasonably be expected to delay the benefits to any employee, officer or director completion of an Acquired Company other than in the ordinary course of business or as may be required by applicable law;
7.2.3. Contemplated Transactions; (ii) enter into any collective bargaining agreement;
7.2.4. issuecontract, sell agreement or otherwise dispose of any capital stock or other Equity Interests or grant any options or other rights to purchase or obtain (including upon conversion, exchange or exercise of other securities) any of its capital stock or other Equity Interests (other than any issuance of Shares upon exercise of any Option in effect on the date hereof and in accordance with the terms thereof);
7.2.5. incur, assume or guarantee any Indebtedness, other than under credit facilities in existence on the date hereof in the ordinary course of business and other than any accrual of interest under any notes in existence on the date hereof, it being understood that any Indebtedness incurred under this Section 7.2.5 shall constitute Refinancing Indebtedness;
7.2.6. voluntarily subject arrangement materially impacting any of the material properties Purchased Assets; (iii) amend, modify, cancel or assets of the Acquired Companies to any Encumbrances (other than Permitted Encumbrances);
7.2.7. make any changes in its methods of accounting or accounting practices or policies (including with respect to reserves) other than those required by GAAP;
7.2.8. enter into any commitment for capital expenditures (including entering into any capital lease) in excess of $250,000 in the aggregate;
7.2.9. declare, set aside or pay any dividend or make any other distribution to any Stockholder other than the payment of cash dividends;
7.2.10. amend its Organizational Documents or effect any stock split, stock combination, stock dividend or similar action;
7.2.11. acquire, sell, lease, license or otherwise dispose of any business or material investment or waive any material assets, except in the ordinary course of business consistent with past practice or as are required rights under Contracts in effect on the date hereof;
7.2.12. merge, combine or consolidate with any Person;
7.2.13. make, change or revoke Assigned Contract; (iv) take any material Tax election or Tax accounting method; file any income or other material Tax Return; file any material amendment to any material Tax Return; request, or enter into, any ruling, settlement or other compromise with any Taxing Authority; or agree to the extension of the period of time within which any Tax may be assessed; provided, however, in the case of any income or other material Tax Return timely provided to Parent for its review and consent, the Company may (or may cause an Acquired Company, as applicable, to) file any income or other material Tax Return without Parent’s consent if such consent has been unreasonably delayed and if necessary to file any such Tax Return by its due date after taking advantage of any automatic extensions;
7.2.14. enter into any settlement or compromise of any Action if such settlement or compromise would involve the payment by an Acquired Company of more than $100,000 or the imposition of any material non-monetary restrictions upon any Acquired Company;
7.2.15. adopt a plan of complete or partial liquidation, dissolution, restructuring or recapitalization;
7.2.16. pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, action or enter into any agreement or arrangement withthat could alter the amount, any officer, director duration or Affiliate determination of any Acquired Companyroyalties or other payments due to or owed by Hxxxxx FRC in any manner that would reasonably be expected to affect the rights or obligations of Purchaser after the Closing under any Assigned Contract; (v) authorize for issuance, except for in the ordinary course of business and consistent with past practice;
7.2.17. grant issue, sell or otherwise create deliver any capital stock of, or consent to the creation of any easementother equity or voting interest in, covenantHxxxxx FRC, restriction, assessment or charge materially affecting any Leased Real Property or any part thereof; commit securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire any waste shares of capital stock of, or nuisance on any Leased Real Propertyother equity or voting interest in, Hxxxxx FRC; or make any material changes (vi) agree, whether in the construction writing or condition of any Leased Real Property;
7.2.18. terminate or allow to be terminated any insurance policy in effect as of the date hereofotherwise, or fail to maintain, with financially responsible insurance companies, insurance on tangible assets of any Acquired Company and on the Business in such amounts and against such risks and losses as are consistent with past practice;
7.2.19. enter into any Contract that if entered into prior to the date hereof would be a Material Company Contract or Customer Contracts or otherwise amend or modify any Material Company Contract or Permit that is material to the Business or waive any material term or condition thereof or grant any consents thereunder;
7.2.20. make any material change to any of the cash management practices of the Business, including but not limited to, discontinue the payment of its accounts payable that are payable in the ordinary course of business or materially deviate from or materially alter any of its practices, policies or procedures in paying accounts payable or collecting accounts receivable; or
7.2.21. agree or commit to do any of the things referred foregoing. [*] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to elsewhere in Section 7.2.1 through 7.2.20 aboveRule 24b-2 of the Securities Exchange Act of 1934, as amended.
Appears in 1 contract
Samples: Asset Purchase Agreement (Healthcare Royalty, Inc.)
Conduct of Business Prior to Closing. Prior to the earlier of the Closing or the termination of Except as otherwise provided in this Agreement in accordance with Article 8, except as otherwise expressly permitted or required by this Agreement, as the CFTC or otherwise consented to by Parent (such consent not to be unreasonably withheldthe Buyer in writing, conditioned or delayed) or as set forth on Schedule 7.2, from and after the date of this Agreement the Company shall, and shall cause comply with each of the other Acquired Companies to, conduct their following:
(a) Its business in all material respects shall be conducted only in the ordinary course of businessand usual course, consistent with past practices and it shall use their commercially reasonable best efforts to (i) preserve keep intact the Acquired Company’s current its business organizationorganization and goodwill, (ii) keep available the services of current officers, its respective officers and employees and agents of the Acquired Companies and (iii) maintain in good state relations and good will relationships with customers, suppliers, licensors, licensees, distributors, landlordslenders, creditors, employees, agents customers, and others having business or financial relationships with the Acquired Companies. Without limiting the generality of the foregoing, prior to the earlier of the Closing or the termination of this Agreement in accordance with Article 8, without the prior consent of Parent (not to be unreasonably withheld, conditioned or delayed)it, and except it shall use its best efforts to notify the Buyer as otherwise contemplated by this Agreement soon as practicable of any event or as set forth on Schedule 7.2, the Company shall notoccurrence or emergency material to, and shall not cause or permit any other Acquired Company to:
7.2.1. increase the compensation (including bonuses) payable on or after the date hereof to any director or officer of such Acquired Company except for increases provided for in any Contracts or plans in effect on the date hereof or in the ordinary and usual course of business consistent with past practices;of, it.
7.2.2. adopt (b) It shall not (i) amend its Certificate of Incorporation, By-Laws or amend any Employee Plan that increases the benefits to any employeeRules, officer (ii) split, combine or director of an Acquired Company other than in the ordinary course of business or as may be required by applicable law;
7.2.3. enter into any collective bargaining agreement;
7.2.4. issue, sell or otherwise dispose of any capital stock or other Equity Interests or grant any options or other rights to purchase or obtain (including upon conversion, exchange or exercise of other securities) reclassify any of its capital stock outstanding memberships or other Equity Interests (other than any issuance of Shares upon exercise of any Option in effect on the date hereof and in accordance with the terms thereof);
7.2.5. incur, assume or guarantee any Indebtedness, other than under credit facilities in existence on the date hereof in the ordinary course of business and other than any accrual of interest under any notes in existence on the date hereof, it being understood that any Indebtedness incurred under this Section 7.2.5 shall constitute Refinancing Indebtedness;
7.2.6. voluntarily subject any of the material properties or assets of the Acquired Companies to any Encumbrances (other than Permitted Encumbrances);
7.2.7. make any changes in its methods of accounting or accounting practices or policies (including with respect to reserves) other than those required by GAAP;
7.2.8. enter into any commitment for capital expenditures (including entering into any capital lease) in excess of $250,000 in the aggregate;
7.2.9. declare, set aside aside, or pay any dividend or other distribution on or make or agree or commit to make any exchange for or redemption of any memberships payable in cash, stock, or property or (iii) create any additional privilege to engage in proprietary or other distribution trading of any contracts on the Commodity Exchange, Inc.
(c) It shall not (i) issue or agree to issue any additional memberships of, or rights of any kind to acquire any equity or voting interests in, the Company or (ii) enter into any contract, agreement, commitment, or arrangement with respect to any Stockholder other than of the payment foregoing, except that it shall have the right to issue or sell additional Regular Memberships so long as the total number of cash dividends;Regular Memberships outstanding at any time does not exceed 772.
7.2.10. amend its Organizational Documents (d) It shall not (i) create, incur, or effect assume any stock splitlong-term or short-term indebtedness for money borrowed, stock combination(ii) issue, stock dividend make or similar action;
7.2.11. acquire, sell, lease, license or otherwise dispose extend any guarantees of any business indebtedness or material investment (iii) make any capital expenditures or any material assetscommitment for capital expenditures, except in the ordinary course of business consistent with past practice or as are required under Contracts in effect on the date hereof;
7.2.12. merge, combine or consolidate with any Person;
7.2.13. make, change or revoke any material Tax election or Tax accounting method; file any income or other material Tax Return; file any material amendment to any material Tax Return; request, or enter into, any ruling, settlement or other compromise with any Taxing Authority; or agree to the extension of the period of time within which any Tax may be assessed; provided, however, in the each case of any income or other material Tax Return timely provided to Parent for its review and consent, the Company may (or may cause an Acquired Company, as applicable, to) file any income or other material Tax Return without Parent’s consent if such consent has been unreasonably delayed and if necessary to file any such Tax Return by its due date after taking advantage of any automatic extensions;
7.2.14. enter into any settlement or compromise of any Action if such settlement or compromise would involve the payment by an Acquired Company of more than $100,000 or the imposition of any material non-monetary restrictions upon any Acquired Company;
7.2.15. adopt a plan of complete or partial liquidation, dissolution, restructuring or recapitalization;
7.2.16. pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, any officer, director or Affiliate of any Acquired Company, except for in the ordinary course of business and consistent with past practice;. It shall not create, incur or assume (i) any indebtedness outside the ordinary course of business or (ii) any indebtedness for borrowed money or capitalized leases, unless such indebtedness would be taken into account as a liability in computing Adjusted Liquid Net Worth.
7.2.17. grant (e) It shall not, except as may be required by law or to retain a Plan’s tax qualified status (i) adopt, enter into or amend any bonus, profit-sharing, compensation, pension, retirement, deferred compensation, employment, severance, termination, or other employee benefit plan, policy, agreement, trust fund, or arrangement for the benefit or welfare of any officer, director, member or employee, (ii) agree to any increase in the compensation payable or to become payable to, or any increase in the contractual term of employment of, any officer or director, (iii) agree to any increase in the compensation payable or to become payable to employees generally or (iv) institute or amend any severance plan or policy.
(f) It shall not sell, lease, mortgage, encumber or otherwise create or consent to the creation dispose of any easement, covenant, restriction, assessment or charge materially affecting any Leased Real Property or any part thereof; commit any waste or nuisance on any Leased Real Property; or make any material changes in the construction or condition of any Leased Real Property;
7.2.18. terminate or allow to be terminated any insurance policy in effect as of the date hereof, or fail to maintain, with financially responsible insurance companies, insurance on tangible assets of any Acquired Company and on the Business in such amounts and against such risks and losses as are consistent with past practice;
7.2.19. enter into any Contract that if entered into prior to the date hereof would be a Material Company Contract or Customer Contracts or otherwise amend or modify any Material Company Contract or Permit that is material to the Business or waive any material term or condition thereof or grant any consents thereunder;
7.2.20. make any material change to interest in any of the cash management practices its assets or properties, except for sales, encumbrances, and other dispositions or grants of the Business, including but not limited to, discontinue the payment of its accounts payable that interests in assets other than fixed assets which are payable made in the ordinary course of business and consistent with past practice and except for liens for taxes not yet due or materially deviate from liens or materially alter encumbrances that are not material in amount or effect and do not impair the use of the property, or as specifically provided for or permitted in this Agreement.
(g) It shall not enter into, terminate or amend any of its practicesmaterial contract, policies agreement, commitment, or procedures understanding if such entry into, termination or amendment would have a material adverse effect on the Company’s assets, liabilities, earnings, financial condition, business or operations.
(h) It shall not enter into any agreement, commitment, or understanding, whether in paying accounts payable writing or collecting accounts receivable; or
7.2.21. agree or commit otherwise, with respect to do any of the things matters referred to elsewhere in Section 7.2.1 subparagraphs (a) through 7.2.20 above(g) above if such agreement, commitment or understanding would have a material adverse effect on the Company’s assets, liabilities, earnings, financial condition, business or operations.
(i) Except for any breach previously disclosed to the Buyer on any Schedule to this Agreement that may exist on the date of this Agreement, it shall comply with all material laws and regulations applicable to it and its operations.
(j) It shall maintain in full force and effect insurance coverage in an amount not less than that presently in effect. The Company shall immediately notify Buyer in the event any insurance coverage is reduced or eliminated.
(k) It shall not take any action (even if otherwise permitted under the Agreement) if the action would or reasonably may be expected to result in any of the Company’s representations or warranties in this Agreement being untrue or in any of the conditions set forth in Article VI not being satisfied.
Appears in 1 contract
Conduct of Business Prior to Closing. Prior to (a) From the earlier date of this Agreement until the Closing or the earlier termination of this Agreement in accordance with pursuant to Article 8VIII, except as otherwise expressly permitted provided in this Agreement or required by this Agreement, as otherwise consented to in writing by Parent Acquiror (such which consent shall not to be unreasonably withheld, conditioned withheld or delayed) or as set forth on Schedule 7.2required by applicable Law, the Company shall, and shall cause (a) conduct the other Acquired Companies to, conduct their business in all material respects of the Company in the ordinary course of business, consistent with past practices and ; (b) use their commercially reasonable efforts to maintain and preserve intact the current organization, business and franchise of the Company and its Subsidiaries; and (c) not (i) preserve intact amend or propose to amend the Acquired Company’s current business organizationCompany Charter Documents or similar governing documents of any of its Subsidiaries, (ii) keep available redeem, split, combine or reclassify the services Company’s outstanding capital stock or issue or authorize the issuance of current officersany other security in respect or, employees and agents in lieu of, or in substitution for, shares of the Acquired Companies and its capital stock, (iii) maintain declare, set aside, make or pay any dividend or other distribution, payable in good state relations and good will with customerscash, suppliersstock, licensorsproperty or otherwise, licensees(iv) issue or sell any shares of any class of the Company’s capital stock or any of its Subsidiaries, distributorsor any options, landlordswarrants or rights of any kind to acquire any shares of, creditorsthe Company’s or any of its 45 Subsidiaries’ capital stock of any class or any debt or equity securities convertible into or exchangeable for such capital stock, employeesexcept that the Company shall issue an aggregate of 142,558,000 shares of Company Common Stock immediately prior to the Closing pursuant to the terms set forth in the Subscription Agreements, agents and others having business relationships with (v) sell, pledge, assign, dispose of, transfer, lease, securitize, or encumber any businesses, properties or assets of the Acquired Companies. Without limiting the generality Company or its Subsidiaries, or (vi) authorize, recommend, propose or announce an intention to do any of the foregoing, prior or enter into any Contract, agreement, commitment or arrangement to do any of the earlier foregoing.
(b) From the date of this Agreement until the Closing or the earlier termination of this Agreement in accordance with pursuant to Article 8VIII, without the prior consent of Parent (not to be unreasonably withheld, conditioned or delayed), and except as otherwise contemplated by provided in this Agreement or as set forth on Schedule 7.2, consented to in writing by the Company shall not, and (which consent shall not cause be unreasonably withheld or permit any other Acquired delayed) or required by applicable Law, Acquiror shall (a) conduct the business of the Company to:
7.2.1. increase the compensation (including bonuses) payable on or after the date hereof to any director or officer of such Acquired Company except for increases provided for in any Contracts or plans in effect on the date hereof or in the ordinary course of business; (b) use commercially reasonable efforts to maintain and preserve intact the current organization, business consistent with past practices;
7.2.2. adopt and franchise of Acquiror and its Subsidiaries; and (c) not (i) amend the Acquiror Charter Documents or amend any Employee Plan that increases the benefits to any employee, officer or director of an Acquired Company other than in the ordinary course of business or as may be required by applicable law;
7.2.3. enter into any collective bargaining agreement;
7.2.4. issue, sell or otherwise dispose similar governing documents of any of its Subsidiaries, (ii) redeem, split, combine or reclassify Acquiror’s outstanding capital stock or issue or authorize the issuance of any other Equity Interests security in respect or, in lieu of, or grant any options or other rights to purchase or obtain (including upon conversionin substitution for, exchange or exercise of other securities) any shares of its capital stock or other Equity Interests stock, (other than any issuance of Shares upon exercise of any Option in effect on the date hereof and in accordance with the terms thereof);
7.2.5. incur, assume or guarantee any Indebtedness, other than under credit facilities in existence on the date hereof in the ordinary course of business and other than any accrual of interest under any notes in existence on the date hereof, it being understood that any Indebtedness incurred under this Section 7.2.5 shall constitute Refinancing Indebtedness;
7.2.6. voluntarily subject any of the material properties or assets of the Acquired Companies to any Encumbrances (other than Permitted Encumbrances);
7.2.7. make any changes in its methods of accounting or accounting practices or policies (including with respect to reservesiii) other than those required by GAAP;
7.2.8. enter into any commitment for capital expenditures (including entering into any capital lease) in excess of $250,000 in the aggregate;
7.2.9. declare, set aside aside, make or pay any dividend or make other distribution, payable in cash, stock, property or otherwise, (iv) issue or sell any other distribution shares of any class of Acquiror’s capital stock or any of its Subsidiaries, or any options, warrants or rights of any kind to acquire any Stockholder other than the payment shares of, Acquiror’s or any of cash dividends;
7.2.10. amend its Organizational Documents Subsidiaries’ capital stock of any class or effect any stock splitdebt or equity securities convertible into or exchangeable for such capital stock, stock combination(v) sell, stock dividend or similar action;
7.2.11. acquirepledge, sellassign, dispose of, transfer, lease, license or otherwise dispose of any business or material investment or any material assets, except in the ordinary course of business consistent with past practice or as are required under Contracts in effect on the date hereof;
7.2.12. merge, combine or consolidate with any Person;
7.2.13. make, change or revoke any material Tax election or Tax accounting method; file any income or other material Tax Return; file any material amendment to any material Tax Return; requestsecuritize, or enter intoencumber any businesses, properties or assets of Acquiror or its Subsidiaries, or (vi) authorize, recommend, propose or announce an intention to do any ruling, settlement or other compromise with any Taxing Authority; or agree to the extension of the period of time within which any Tax may be assessed; provided, however, in the case of any income or other material Tax Return timely provided to Parent for its review and consent, the Company may (or may cause an Acquired Company, as applicable, to) file any income or other material Tax Return without Parent’s consent if such consent has been unreasonably delayed and if necessary to file any such Tax Return by its due date after taking advantage of any automatic extensions;
7.2.14. enter into any settlement or compromise of any Action if such settlement or compromise would involve the payment by an Acquired Company of more than $100,000 or the imposition of any material non-monetary restrictions upon any Acquired Company;
7.2.15. adopt a plan of complete or partial liquidation, dissolution, restructuring or recapitalization;
7.2.16. pay, loan or advance any amount to, or sell, transfer or lease any of its assets toforegoing, or enter into any agreement Contract, agreement, commitment or arrangement with, any officer, director or Affiliate of any Acquired Company, except for in the ordinary course of business and consistent with past practice;
7.2.17. grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge materially affecting any Leased Real Property or any part thereof; commit any waste or nuisance on any Leased Real Property; or make any material changes in the construction or condition of any Leased Real Property;
7.2.18. terminate or allow to be terminated any insurance policy in effect as of the date hereof, or fail to maintain, with financially responsible insurance companies, insurance on tangible assets of any Acquired Company and on the Business in such amounts and against such risks and losses as are consistent with past practice;
7.2.19. enter into any Contract that if entered into prior to the date hereof would be a Material Company Contract or Customer Contracts or otherwise amend or modify any Material Company Contract or Permit that is material to the Business or waive any material term or condition thereof or grant any consents thereunder;
7.2.20. make any material change to any of the cash management practices of the Business, including but not limited to, discontinue the payment of its accounts payable that are payable in the ordinary course of business or materially deviate from or materially alter any of its practices, policies or procedures in paying accounts payable or collecting accounts receivable; or
7.2.21. agree or commit to do any of the things referred to elsewhere in Section 7.2.1 through 7.2.20 aboveforegoing.
Appears in 1 contract
Samples: Merger Agreement (Adomani, Inc.)
Conduct of Business Prior to Closing. Prior Sellers and the Company covenant and agree that, from and after the Effective Date to and including the earlier date of the Closing under this Agreement or to the date of termination of this Agreement pursuant to its terms, unless Purchaser shall otherwise consent in accordance with Article 8, except as otherwise expressly permitted or required by this Agreement, as otherwise consented to by Parent (such consent not to be unreasonably withheld, conditioned or delayed) or as set forth on Schedule 7.2, the Company shall, and shall cause the other Acquired Companies to, conduct their business in all material respects in the ordinary course of business, consistent with past practices and use their commercially reasonable efforts to (i) preserve intact the Acquired Company’s current business organization, (ii) keep available the services of current officers, employees and agents of the Acquired Companies and (iii) maintain in good state relations and good will with customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents and others having business relationships with the Acquired Companies. Without limiting the generality of the foregoing, prior to the earlier of the Closing or the termination of this Agreement in accordance with Article 8, without the prior consent of Parent (not to be unreasonably withheld, conditioned or delayed)writing, and except as otherwise contemplated by this Agreement or as set forth on Schedule 7.2Agreement, each of the following shall be complied with:
(a) The business of the Company shall not, and shall not cause or permit any other Acquired Company to:
7.2.1. increase the compensation (including bonuses) payable on or after the date hereof to any director or officer of such Acquired Company except for increases provided for in any Contracts or plans in effect on the date hereof or be conducted only in the ordinary and usual course and the Company shall use reasonable efforts to keep intact its business organization and good will, to keep available the services of its officers and employees and to maintain a good relationship with suppliers, lenders, creditors, distributors, employees, customers, and others having business or financial relationship with it, and the Sellers or the Company shall immediately notify Purchaser of any event or occurrence or emergency material to, and not in the ordinary and usual course of business consistent with past practices;of, the Company.
7.2.2. adopt (b) The Company shall not (i) amend its articles of incorporation or amend any Employee Plan that increases the benefits to any employeebylaws or (ii) split, officer combine, or director of an Acquired Company other than in the ordinary course of business or as may be required by applicable law;
7.2.3. enter into any collective bargaining agreement;
7.2.4. issue, sell or otherwise dispose of any capital stock or other Equity Interests or grant any options or other rights to purchase or obtain (including upon conversion, exchange or exercise of other securities) reclassify any of its capital stock outstanding securities, or other Equity Interests (other than any issuance of Shares upon exercise of any Option in effect on the date hereof and in accordance with the terms thereof);
7.2.5. incur, assume or guarantee any Indebtedness, other than under credit facilities in existence on the date hereof in the ordinary course of business and other than any accrual of interest under any notes in existence on the date hereof, it being understood that any Indebtedness incurred under this Section 7.2.5 shall constitute Refinancing Indebtedness;
7.2.6. voluntarily subject any of the material properties or assets of the Acquired Companies to any Encumbrances (other than Permitted Encumbrances);
7.2.7. make any changes in its methods of accounting or accounting practices or policies (including with respect to reservesiii) other than those required by GAAP;
7.2.8. enter into any commitment for capital expenditures (including entering into any capital lease) in excess of $250,000 in the aggregate;
7.2.9. declare, set aside aside, or pay any dividend or other distribution on, or make, agree or commit to make any other distribution exchange for or redemption of, any of its outstanding securities whether payable in cash, stock or property;
(c) Except as set forth in Schedule 4.4, the Company shall not (i) issue or agree to issue any additional shares of, or rights of any kind to acquire any shares of, its capital stock of any class; or (ii) enter into any contract, agreement, commitment, or arrangement with respect to any Stockholder other than of the payment of cash dividendsforegoing;
7.2.10. amend its Organizational Documents (d) The Company shall not create, incur, or effect assume any stock splitlong-term or short-term indebtedness for money borrowed or make any capital expenditures or commitment for capital expenditures in excess of $10,000 individually or $50,000 in the aggregate, stock combination, stock dividend or similar actionwithout the prior written consent of Purchaser;
7.2.11. acquire(e) The Company shall not (i) adopt, sell, lease, license or otherwise dispose of any business or material investment or any material assets, except in the ordinary course of business consistent with past practice or as are required under Contracts in effect on the date hereof;
7.2.12. merge, combine or consolidate with any Person;
7.2.13. make, change or revoke any material Tax election or Tax accounting method; file any income or other material Tax Return; file any material amendment to any material Tax Return; request, or enter into, or amend any rulingbonus, settlement profit sharing, compensation, stock option, warrant, pension, retirement, deferred compensation, employment, severance, termination, or other compromise with employee benefit plan, agreement, trust fund, or arrangement for the benefit or welfare of any Taxing Authority; officer, director, or employee of the Company or (ii) agree to the extension of the period of time within which any Tax may be assessed; provided, however, increase in the case of any income compensation payable or other material Tax Return timely provided to Parent for its review and consent, the Company may (or may cause an Acquired Company, as applicable, to) file any income or other material Tax Return without Parent’s consent if such consent has been unreasonably delayed and if necessary to file any such Tax Return by its due date after taking advantage of any automatic extensions;
7.2.14. enter into any settlement or compromise of any Action if such settlement or compromise would involve the payment by an Acquired Company of more than $100,000 or the imposition of any material non-monetary restrictions upon any Acquired Company;
7.2.15. adopt a plan of complete or partial liquidation, dissolution, restructuring or recapitalization;
7.2.16. pay, loan or advance any amount become payable to, or sell, transfer or lease any increase in the contractual term of its assets to, or enter into any agreement or arrangement withemployment of, any officer, director or Affiliate of any Acquired Company, except for in the ordinary course of business and consistent with past practice;
7.2.17. grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge materially affecting any Leased Real Property or any part thereof; commit any waste or nuisance on any Leased Real Property; or make any material changes in the construction or condition of any Leased Real Property;
7.2.18. terminate or allow to be terminated any insurance policy in effect as employee of the date hereof, or fail to maintain, with financially responsible insurance companies, insurance on tangible assets of any Acquired Company and on the Business in such amounts and against such risks and losses as are consistent with past practiceCompany;
7.2.19. enter into any Contract that if entered into prior to the date hereof would be a Material Company Contract or Customer Contracts or otherwise amend or modify any Material Company Contract or Permit that is material to the Business or waive any material term or condition thereof or grant any consents thereunder;
7.2.20. make any material change to any of the cash management practices of the Business, including but not limited to, discontinue the payment of its accounts payable that are payable in the ordinary course of business or materially deviate from or materially alter any of its practices, policies or procedures in paying accounts payable or collecting accounts receivable; or
7.2.21. agree or commit to do any of the things referred to elsewhere in Section 7.2.1 through 7.2.20 above.
Appears in 1 contract
Samples: Stock Purchase Agreement (Horizon Mental Health Management Inc)
Conduct of Business Prior to Closing. Prior to the earlier of the Closing or the termination of this Agreement in accordance with Article 8Closing, except as otherwise expressly permitted or required contemplated by this Agreement, as otherwise consented Seller will use its reasonable commercial efforts to by Parent (such consent not to be unreasonably withheld, conditioned or delayed) or as set forth on Schedule 7.2, cause the Company shall, and shall cause the other Acquired Companies to, to conduct their its business in all material respects in the ordinary course Ordinary Course of business, consistent with past practices and use their commercially reasonable efforts to (i) preserve intact the Acquired Company’s current business organization, (ii) keep available the services of current officers, employees and agents of the Acquired Companies and (iii) maintain in good state relations and good will with customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents and others having business relationships with the Acquired CompaniesBusiness. Without limiting the generality of the foregoing, prior to the earlier of the Closing or the termination of this Agreement in accordance with Article 8, without the prior consent of Parent (not to be unreasonably withheld, conditioned or delayed), the Buyer and except as otherwise contemplated by this Agreement or as set forth on in Schedule 7.27.2 of the Disclosure Schedule, neither the Seller nor the Company shall not, and shall not cause or permit any other Acquired Company to:
7.2.1. will: (a) increase the compensation (including bonuses) payable on or after the date hereof, or to become payable on or after the date hereof to any director or executive officer of such Acquired the Company except for increases provided for in any Contracts or plans in effect on the date hereof or in the ordinary course of business consistent with past practices;
7.2.2. adopt alter or amend any Employee Plan that increases arrangements, establish or increase the benefits to payable under any Company Plans or establish any new bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing or other employee benefit plan for any employee, officer or director of an Acquired Company with any such persons other than in the ordinary course of business arrangements entered into with Buyer or as may be required by applicable law;
7.2.3. enter into any collective bargaining agreement;
7.2.4. issue, sell or otherwise dispose of any capital stock or other Equity Interests or previously committed; (b) grant any options or other rights to purchase or obtain (including upon conversion, exchange or exercise of other securitiesexercise) any of its capital stock Membership Interests or other Equity Interests membership interests in the Company; (c) incur, assume, or guaranty any liabilities or Indebtedness of any kind other than Indebtedness that is incurred in the Ordinary Course of Business; (d) declare or pay any issuance dividends, issue, purchase or redeem any Membership Interests or any convertible securities into or exchangeable for any of Shares upon exercise its membership interests; (e) amend the Company Charter Documents; (f) amend any Company Plan or any arrangement concerning the Multi-Employer Plans which will affect the Company except to the extent contemplated or permitted in Section 7.14(c); (g) amend any Lease, except in the Ordinary Course of Business; (h) change any Option election in effect respect of Taxes with respect to the Company (or Seller on behalf of, or affecting, the Company), change any accounting method in respect of Taxes with respect to the Company, file any amendment to a Tax Return of the Company, settle any claim or assessment in respect of Taxes of the Company (or Seller on behalf of, or affecting, the Company), or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes of the Company (or Seller on behalf of, or affecting, the Company); (i) mortgage, pledge, or subject to any Lien, any portion of Company’s assets, (j) sell, assign, or transfer any portion of Company’s Intellectual Property, or (k) sell, assign or transfer any portion of Company’s tangible assets having a value in excess of $50,000, except for sales or dispositions of assets in the Ordinary Course of Business. Other than as set forth on Schedule 7.2 of the Disclosure Schedules, after the date hereof and in accordance with prior to the terms thereof);
7.2.5. incurClosing Date, assume or guarantee the Company will not take any Indebtedness, other than under credit facilities in existence on the date hereof in the ordinary course of business and other than any accrual of interest under any notes in existence on the date hereof, it being understood that any Indebtedness incurred under this Section 7.2.5 shall constitute Refinancing Indebtedness;
7.2.6. voluntarily subject any of the material properties or assets of the Acquired Companies to any Encumbrances (other than Permitted Encumbrances);
7.2.7. make any changes in its methods of accounting or accounting practices or policies (including action with respect to reserves) its condition, assets or business other than those required by GAAP;
7.2.8. enter into any commitment for capital expenditures (including entering into any capital lease) in excess of $250,000 in the aggregate;
7.2.9. declare, set aside or pay any dividend or make any other distribution to any Stockholder other than the payment Ordinary Course of cash dividends;
7.2.10. amend its Organizational Documents or effect any stock split, stock combination, stock dividend or similar action;
7.2.11. acquire, sell, lease, license or otherwise dispose of any business or material investment or any material assets, except in the ordinary course of business consistent with past practice or as are required under Contracts in effect on the date hereof;
7.2.12. merge, combine or consolidate with any Person;
7.2.13. make, change or revoke any material Tax election or Tax accounting method; file any income or other material Tax Return; file any material amendment to any material Tax Return; request, or enter into, any ruling, settlement or other compromise with any Taxing Authority; or agree to the extension of the period of time within which any Tax may be assessed; provided, however, in the case of any income or other material Tax Return timely provided to Parent for its review and consent, the Company may (or may cause an Acquired Company, as applicable, to) file any income or other material Tax Return without Parent’s consent if such consent has been unreasonably delayed and if necessary to file any such Tax Return by its due date after taking advantage of any automatic extensions;
7.2.14. enter into any settlement or compromise of any Action if such settlement or compromise would involve the payment by an Acquired Company of more than $100,000 or the imposition of any material non-monetary restrictions upon any Acquired Company;
7.2.15. adopt a plan of complete or partial liquidation, dissolution, restructuring or recapitalization;
7.2.16. pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, any officer, director or Affiliate of any Acquired Company, except for in the ordinary course of business and consistent with past practice;
7.2.17. grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge materially affecting any Leased Real Property or any part thereof; commit any waste or nuisance on any Leased Real Property; or make any material changes in the construction or condition of any Leased Real Property;
7.2.18. terminate or allow to be terminated any insurance policy in effect as of the date hereof, or fail to maintain, with financially responsible insurance companies, insurance on tangible assets of any Acquired Company and on the Business in such amounts and against such risks and losses as are consistent with past practice;
7.2.19. enter into any Contract that if entered into prior to the date hereof would be a Material Company Contract or Customer Contracts or otherwise amend or modify any Material Company Contract or Permit that is material to the Business or waive any material term or condition thereof or grant any consents thereunder;
7.2.20. make any material change in contemplation of proceeding to any Closing of the cash management practices of the Business, including but not limited to, discontinue the payment of its accounts payable that are payable in the ordinary course of business or materially deviate from or materially alter any of its practices, policies or procedures in paying accounts payable or collecting accounts receivable; or
7.2.21. agree or commit to do any of the things referred to elsewhere in Section 7.2.1 through 7.2.20 abovethis Agreement.
Appears in 1 contract
Samples: Membership Interest Purchase and Sale Agreement (Global Power Equipment Group Inc.)
Conduct of Business Prior to Closing. Prior to the earlier of the Closing or the termination of this Agreement in accordance with Article 8Closing, except as otherwise expressly permitted or required by this Agreement, as otherwise consented to by Parent (such consent not to be unreasonably withheld, conditioned or delayed) or as set forth on Schedule 7.28.2 or as otherwise expressly contemplated by this Agreement or the Restructuring Agreement, the Company shall, and shall Seller will cause the other Acquired Target Companies to, to conduct their business in all material respects in the ordinary course Ordinary Course of business, consistent with past practices Business and will use their commercially reasonable efforts to (i) preserve intact maintain the Acquired Company’s current business organizationBusiness, (ii) keep available including the services of current officers, employees assets and agents properties of the Acquired Companies Business and (iii) maintain in good state relations relationships with, and good will with goodwill of, customers, suppliers, licensors, licensees, distributors, landlords, creditors, third parties with commercial relationships and employees, agents and others having business relationships with the Acquired Companies. Without limiting the generality of the foregoing, prior to the earlier of the Closing or the termination of this Agreement in accordance with Article 8, without the prior consent of Parent the Buyer (not to be unreasonably withheld, conditioned withheld or delayed), ) and except for the transactions expressly contemplated by the Restructuring Agreement or as otherwise expressly contemplated by this Agreement or as set forth on Schedule 7.2Agreement, the Company shall Target Companies will not, and shall not cause or permit any other Acquired Company to:
7.2.1. (a) increase the compensation (including bonuses) payable on or after the date hereof, or to become payable on or after the date hereof to any director or officer employee of such Acquired Company except for increases provided for in any Contracts or plans in effect on the date hereof or in the ordinary course of business consistent with past practicesTarget Company;
7.2.2. adopt (b) declare or amend pay any Employee Plan that increases the benefits dividends or, issue, purchase or redeem any shares of its capital stock or any convertible securities into or exchangeable for any of its capital stock, or make any other distributions to any employee, officer or director of an Acquired Company other than in the ordinary course of business or as may be required by applicable lawits shareholders;
7.2.3. enter into any collective bargaining agreement;
7.2.4. (c) issue, sell sell, pledge, encumber or otherwise dispose of any capital stock or other Equity Interests securities or grant any options options, warrants, convertible or exchangeable securities or other rights to purchase or obtain (including upon conversion, exchange or exercise of other securitiesexercise) any of its capital stock or other Equity Interests securities;
(d) incur, assume, or guaranty any liabilities or Indebtedness of any kind other than any issuance Indebtedness that is incurred in the Ordinary Course of Shares upon exercise of any Option in effect on the date hereof and in accordance with the terms thereof);
7.2.5. incur, assume or guarantee any Indebtedness, other than Business under credit facilities in existence on the date hereof in (all of which Indebtedness will be repaid at or prior to the ordinary course of business Closing and other than any accrual of interest under any notes in existence on Liens related thereto will be released at or prior to the date hereof, it being understood that any Indebtedness incurred under this Section 7.2.5 shall constitute Refinancing Indebtedness;
7.2.6. voluntarily subject any of the material properties or assets of the Acquired Companies to any Encumbrances (other than Permitted Encumbrances);
7.2.7. make any changes in its methods of accounting or accounting practices or policies (including with respect to reservesClosing) other than those required by GAAP;
7.2.8. enter into any commitment for capital expenditures (including entering into any capital lease) in excess of $250,000 in the aggregate;
7.2.9. declare, set aside or pay any dividend or make any change in its cash management policies or accelerate collection of any notes or accounts receivables or other distribution to amounts due from third parties;
(e) (i) make any Stockholder change in any Accounting Principle, practice, policy or method, including for Tax purposes, other than the payment of cash dividends;
7.2.10. amend its Organizational Documents or effect any stock split, stock combination, stock dividend or similar action;
7.2.11. acquire, sell, lease, license or otherwise dispose of any business or material investment as required by GAAP or any material assetsapplicable Law, except in the ordinary course of business consistent with past practice or as are required under Contracts in effect on the date hereof;
7.2.12. merge, combine or consolidate with any Person;
7.2.13. (ii) make, change or revoke any material election in respect of Taxes outside of the scope of its ordinary course of business and inconsistent with past practice, (iii) prepare any Tax election Returns in a manner which is not consistent in all respects with the past practice of the Company and its Subsidiaries with respect to the treatment of items on such Tax Returns, except as otherwise required by applicable Law or Tax accounting method; to the extent necessary to appropriately reflect the amount of net operating losses adjusted on account of cancellation of indebtedness income incurred in connection with the transactions giving rise to the item set forth in Section 3.7.1(f) of the Disclosure Schedules, (iv) file any income amendment to a Tax Return that will or is reasonably likely to increase the Tax liability of the Company or its Subsidiaries after the Closing, except as required by applicable Law, or (v) settle any claim or assessment in respect of Taxes that is reasonably be likely to materially affect the Company or any of its Subsidiaries, after the Closing Date;
(f) amend the Organizational Documents of any Target Company;
(g) dispose of, sell, lease, sublease or transfer any material assets or create or suffer to exist any Lien on any material assets, except for sales or dispositions of assets in the Ordinary Course of Business in an aggregate amount not to exceed $250,000, acquire (by merger, consolidation or acquisition of stock or assets) any Person or any securities, assets or properties of any Person, other than assets or properties acquired in the Ordinary Course of Business and not material to any Target Company or reclassify, combine, split, subdivide or combine any of its capital or other material Tax Return; file equity securities;
(h) institute any material amendment to increase under, enhance or accelerate any material Tax Return; request, rights or benefits under or enter into, amend, terminate or adopt any rulingEmployee Plan, settlement or other compromise with any Taxing Authority; or agree to the extension of the period of time within which any Tax may be assessed; providedagreement, however, other than in the case ordinary course of any income or other material Tax Return timely provided to Parent for its review and consent, the Company may (or may cause an Acquired Companybusiness, as applicable, to) file any income or other material Tax Return without Parent’s consent if such consent has been unreasonably delayed and if necessary to file required by any such Tax Return Employee Plan or agreement or as required by its due date after taking advantage of any automatic extensionsapplicable Laws;
7.2.14. enter into any settlement or compromise of any Action if such settlement or compromise would involve the payment by an Acquired Company of more than $100,000 or the imposition of any material non-monetary restrictions upon any Acquired Company;
7.2.15. (i) adopt a plan of complete or partial liquidation, dissolution, restructuring restructuring, recapitalization or recapitalizationother reorganization or alter the corporate structure of any Target Company or merge or consolidate with any Person;
7.2.16. (j) pay, loan or advance any amount tosettle, or selldismiss any material litigation or claim involving any Target Company;
(k) other than in the Ordinary Course of Business and as would not be material, transfer enter into, modify, amend, terminate or lease any of its assets to, or enter into any agreement or arrangement with, any officer, director or Affiliate waive performance of any Acquired Companyprovision under, except for in the ordinary course of business and consistent with past practice;
7.2.17. grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge materially affecting any Leased Real Property or any part thereof; commit any waste or nuisance on any Leased Real Property; or make any material changes in the construction or condition of any Leased Real Property;
7.2.18. terminate or allow to be terminated any insurance policy in effect as of the date hereof, or fail to maintain, with financially responsible insurance companies, insurance on tangible assets of any Acquired Company and on the Business in such amounts and against such risks and losses as are consistent with past practice;
7.2.19. enter into any Contract that if is listed on Schedule 3.13 or would have been required to be listed on Schedule 3.13 had such Contract been entered into prior to the date hereof would be a Material of this Agreement;
(l) enter into any collective bargaining agreement or similar agreement;
(m) make any capital expenditures, capital additions or capital improvements, except as provided in the annual operating plan or budget approved by the board of directors of such Target Company Contract (and such Target Company shall not fail to make any such budgeted capital expenditures);
(n) transfer, dispose of, grant, or Customer Contracts obtain, abandon or otherwise amend or modify permit to lapse any Material Company Contract or Permit that is material to the Business or waive any material term or condition thereof rights to, or grant any consents thereunder;
7.2.20. make right to, any material change Company IP Rights except in the Ordinary Course of Business, or disclose or agree to disclose to any Person, other than representatives of the cash management practices of the BusinessBuyer, including but not limited to, discontinue the payment of its accounts payable that are payable in the ordinary course of business or materially deviate from or materially alter any of its practices, policies or procedures in paying accounts payable or collecting accounts receivablematerial trade secret; or
7.2.21. (o) agree in writing, authorize, recommend, propose, commit or commit announce an intention to do any of the things referred to elsewhere in Section 7.2.1 through 7.2.20 aboveforegoing.
Appears in 1 contract
Conduct of Business Prior to Closing. Prior to Between the earlier date of the Closing or the termination of ------------------------------------ this Agreement in accordance with Article 8, except as otherwise expressly permitted or required by this Agreement, as otherwise consented to by Parent (such consent not to be unreasonably withheld, conditioned or delayed) or as set forth on Schedule 7.2and the Acquisition Merger Effective Time, the parties agree:
(a) That the Company shall, and the Company Subsidiaries shall cause the other Acquired Companies to, conduct their business in all material respects only in the ordinary course of businesscourse, consistent and maintain their books and records in accordance with past practices and use their commercially reasonable efforts not to take any action that would (i) preserve intact adversely affect the Acquired Company’s current business organization, ability to obtain the Governmental Approvals or (ii) keep available adversely affect the services of current officers, employees and agents of the Acquired Companies and (iii) maintain in good state relations and good will with customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents and others having business relationships with the Acquired Companies. Without limiting the generality of the foregoing, prior Company's ability to the earlier of the Closing or the termination of this Agreement in accordance with Article 8, without the prior consent of Parent (not to be unreasonably withheld, conditioned or delayed), and except as otherwise contemplated by perform its obligations under this Agreement or as set forth on Schedule 7.2, the Option Agreement;
(b) That the Company shall not, and shall not cause or permit any other Acquired Company to:
7.2.1. increase without the compensation prior written consent of Ambanc: (including bonusesi) payable on or after the date hereof to any director or officer of such Acquired Company except for increases provided for in any Contracts or plans in effect on the date hereof or in the ordinary course of business consistent with past practices;
7.2.2. adopt or amend any Employee Plan that increases the benefits to any employee, officer or director of an Acquired Company other than in the ordinary course of business or as may be required by applicable law;
7.2.3. enter into any collective bargaining agreement;
7.2.4. issue, sell or otherwise dispose of any capital stock or other Equity Interests or grant any options or other rights to purchase or obtain (including upon conversion, exchange or exercise of other securities) any of its capital stock or other Equity Interests (other than any issuance of Shares upon exercise of any Option in effect on the date hereof and in accordance with the terms thereof);
7.2.5. incur, assume or guarantee any Indebtedness, other than under credit facilities in existence on the date hereof in the ordinary course of business and other than any accrual of interest under any notes in existence on the date hereof, it being understood that any Indebtedness incurred under this Section 7.2.5 shall constitute Refinancing Indebtedness;
7.2.6. voluntarily subject any of the material properties or assets of the Acquired Companies to any Encumbrances (other than Permitted Encumbrances);
7.2.7. make any changes in its methods of accounting or accounting practices or policies (including with respect to reserves) other than those required by GAAP;
7.2.8. enter into any commitment for capital expenditures (including entering into any capital lease) in excess of $250,000 in the aggregate;
7.2.9. declare, set aside or pay any dividend or make any other distribution with respect to Company's capital stock, except for the declaration and payment of regular quarterly cash dividends in an amount not to exceed $.07 per share of Company common stock with respect to any Stockholder other than full calender quarter after the payment date hereof; (ii) reacquire any of cash dividends;
7.2.10. amend its Organizational Documents Company's outstanding shares of capital stock; (iii) except as set forth at Schedule 4.2(c) hereof, issue or sell or buy any shares of capital stock of the Company or any Company Subsidiary, except shares of Company common stock issued pursuant to the Company Option Plan and the Option Agreement; (iv) effect any stock split, stock combination, stock dividend or similar actionother reclassification of Company's common stock; or (v) grant any options or issue any warrants exercisable for or securities convertible or exchangeable into capital stock of Company or any Company Subsidiary or grant any stock appreciation or other rights with respect to shares of capital stock of Company or of any Company Subsidiary;
7.2.11. acquire(c) That Company and the Company Subsidiaries shall not, sellwithout the prior written consent of Ambanc: (i) except as set forth at Schedule 4.2(c) hereof, lease, license sell or otherwise dispose of any significant assets of the Company or of any Company Subsidiary other than in the ordinary course of business consistent with past practices; (ii) merge or material investment consolidate the Company or any Company Subsidiary with or, except as set forth at Schedule 4.2(c) hereof, otherwise acquire any other entity, or file any applications or make any contract with respect to branching by Savings (whether de novo, purchase, sale or relocation) or acquire or construct, or enter into any agreement to acquire or construct, any interest in real property (other than with respect to security interests in properties securing loans and properties acquired in settlement of loans in the ordinary course) or improvements to real property in the aggregate in excess of $50,000; (iii) change the articles or certificate of incorporation, charter documents or other governing instruments of the Company or any Company Subsidiary, except as provided in this Agreement or as required by law; (iv) grant to any executive officer, director or employee of the Company or any Company Subsidiary any increase in annual compensation, or any bonus type payment except for normal individual increases in compensation to employees in the ordinary course of business consistent with past practice (including, but not limited to, the payment of bonuses for which such expense has previously been accrued) and except as set forth on Schedule 4.2(c); (v) adopt any new or amend or terminate any existing Employee Plans or Benefit Arrangements of any type except as contemplated herein or as set forth at Schedule 4.2(c); (vi) except as set forth on Schedule 4.2(c) or Schedule 4.16(d) hereof, authorize severance pay or other benefits for any officer, director or employee of Company or any Company Subsidiary; (vii) incur any material assetsindebtedness or obligation or enter into or extend any material agreement or lease, except in the ordinary course of business consistent with past practice or as are required under Contracts practices; (viii) engage in effect on the date hereof;
7.2.12. merge, combine or consolidate with any Person;
7.2.13. make, change or revoke any material Tax election or Tax accounting method; file any income or lending activities other material Tax Return; file any material amendment to any material Tax Return; request, or enter into, any ruling, settlement or other compromise with any Taxing Authority; or agree to the extension of the period of time within which any Tax may be assessed; provided, however, in the case of any income or other material Tax Return timely provided to Parent for its review and consent, the Company may (or may cause an Acquired Company, as applicable, to) file any income or other material Tax Return without Parent’s consent if such consent has been unreasonably delayed and if necessary to file any such Tax Return by its due date after taking advantage of any automatic extensions;
7.2.14. enter into any settlement or compromise of any Action if such settlement or compromise would involve the payment by an Acquired Company of more than $100,000 or the imposition of any material non-monetary restrictions upon any Acquired Company;
7.2.15. adopt a plan of complete or partial liquidation, dissolution, restructuring or recapitalization;
7.2.16. pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, any officer, director or Affiliate of any Acquired Company, except for in the ordinary course of business and consistent with past practice;
7.2.17. grant practices; (ix) except as set forth at Schedule 4.2(c) hereof, form any new subsidiary or otherwise create cause or consent to permit a material change in the creation of activities presently conducted by any easement, covenant, restriction, assessment or charge materially affecting any Leased Real Property or any part thereof; commit any waste or nuisance on any Leased Real Property; Company Subsidiary or make additional investments in subsidiaries; (x) purchase any material changes in debt securities or derivative securities, including CMO or REMIC products, that are defined as "high risk mortgage securities" under OTS Thrift Bulletin No. 52 dated January 10, 1992 as revised or purchase any Derivatives Contracts or Structured Notes; (xi) except as set forth at Schedule 4.2(c) hereof, purchase any equity securities other than Federal Home Loan Bank stock; (xii) make any investment which would cause Savings to not be a qualified thrift lender under Section 10(m) of the construction HOLA, or condition of any Leased Real Property;
7.2.18. terminate or allow not to be terminated any insurance policy a "domestic building and loan association" as defined in effect as Section 7701(a)(19) of the date hereof, or fail to maintain, with financially responsible insurance companies, insurance on tangible assets of any Acquired Company and on the Business in such amounts and against such risks and losses as are consistent with past practice;
7.2.19. enter into any Contract that if entered into prior to the date hereof would be a Material Company Contract or Customer Contracts or otherwise amend or modify any Material Company Contract or Permit that is material to the Business or waive any material term or condition thereof or grant any consents thereunder;
7.2.20. Code; (xiii) make any material change to any loan with a principal balance of the cash management practices of the Business, including but not limited to, discontinue the payment of its accounts payable that are payable $500,000 or more; (xiv) authorize capital expenditures other than in the ordinary course of business business; (xv) adopt or materially deviate from implement any change in its accounting principles, practices or materially alter methods other than as may be required by generally accepted accounting principles or by a regulatory authority or adopt or implement any change in its methods of its practices, policies accounting for Federal income tax purposes; or procedures (xvi) make any loan in paying accounts payable which participation interests therein are to be sold to other persons or collecting accounts receivable; or
7.2.21entities or acquire a participation interest in a loan originated by another person or entity in excess of $250,000. agree or commit The limitations contained in this Section 4.2(c) shall also be deemed to do constitute limitations as to the making of any commitment with respect to any of the things referred to elsewhere matters set forth in this Section 7.2.1 through 7.2.20 above4.2(c). Notwithstanding the foregoing, Savings may engage in any of the foregoing activities exclusively with the Bank.
Appears in 1 contract
Samples: Reorganization and Merger Agreement (Ambanc Holding Co Inc)
Conduct of Business Prior to Closing. Prior to Between the earlier of the Closing or the termination date of this Agreement and the Closing Date, unless Buyer will otherwise agree in accordance with Article 8, except as otherwise expressly permitted or required by this Agreement, as otherwise consented to by Parent (such consent not to be unreasonably withheld, conditioned or delayed) writing or as set forth on Schedule 7.2in Section 5.1 of the Disclosure Schedule, the Company shall, and shall cause the other Acquired Companies to, conduct their business in all material respects in the ordinary course of business, consistent with past practices and its Subsidiaries will use their commercially reasonable efforts to (iA) preserve intact the Acquired Company’s current present business organizationorganization and personnel of the Company and the Subsidiaries, (iiB) keep available preserve the services of current officers, employees goodwill and agents advantageous relationships of the Acquired Companies Company and (iii) maintain in good state relations and good will its Subsidiaries with customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents independent contractors, and others having business relationships with other Persons material to the Acquired Companies. Without limiting the generality operation of their respective businesses, (C) prevent any event that could reasonably be expected to have a Material Adverse Effect, and (D) not permit any action or omission that would cause any of the foregoing, prior to the earlier representations or warranties of the Closing Company contained herein or in any Ancillary Agreements to become inaccurate or any of the termination covenants of the Company contained herein or in any Ancillary Agreements to be breached. Between the date of this Agreement in accordance with Article 8and the Closing Date, without the prior consent of Parent Buyer (which consent will not to be unreasonably withheld, conditioned delayed, or delayedconditioned), neither the Company nor any of its Subsidiaries will:
(a) amend or otherwise change its certificate of incorporation or bylaws or equivalent organizational documents;
(b) issue or sell any shares of capital stock of, or membership interests in, the Company or any of its Subsidiaries, or any options, warrants, convertible securities, or other rights of any kind to acquire any such shares or membership interests;
(c) declare, set aside, make, or pay any dividend or other distribution, payable in cash, stock, property, or otherwise, or make any other payment on or 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, and except as otherwise contemplated by this for any payments pursuant to the M & O Agreement or as set forth on Schedule 7.2and the Financial Advisory Agreement; provided, that in no event will payments pursuant to such agreements exceed $200,000; provided further, that following delivery of the certificate pursuant to Section 2.2(a) and while such certificate remains effective under Section 2.2, the Company shall not, may distribute any and shall not cause or permit any other Acquired all Company to:
7.2.1. increase Cash which is in excess of the compensation (including bonuses) payable on or after the date hereof to any director or officer amount of Company Cash specified in such Acquired Company except for increases provided for in any Contracts or plans in effect on the date hereof or in the ordinary course of business consistent with past practicescertificate;
7.2.2. adopt (d) reclassify, combine, split, subdivide, redeem, or amend any Employee Plan that increases the benefits to any employee, officer or director of an Acquired Company other than in the ordinary course of business or as may be required by applicable law;
7.2.3. enter into any collective bargaining agreement;
7.2.4. issue, sell purchase or otherwise dispose of any capital stock acquire, directly or other Equity Interests or grant any options or other rights to purchase or obtain (including upon conversionindirectly, exchange or exercise of other securities) any of its capital stock or other Equity Interests (other than any issuance of Shares upon exercise of any Option in effect on the date hereof and in accordance with the terms thereof);
7.2.5. incurmembership interests, assume or guarantee any Indebtedness, other than under credit facilities in existence on the date hereof in the ordinary course of business and other than any accrual of interest under any notes in existence on the date hereof, it being understood that any Indebtedness incurred under this Section 7.2.5 shall constitute Refinancing Indebtedness;
7.2.6. voluntarily subject any of the material properties or assets of the Acquired Companies to any Encumbrances (other than Permitted Encumbrances);
7.2.7. make any changes in its methods of accounting or accounting practices or policies (including with respect to reserves) other than those required by GAAP;
7.2.8. enter into any commitment for capital expenditures (including entering into any capital lease) in excess of $250,000 in the aggregate;
7.2.9. declare, set aside or pay any dividend or make any other distribution change with respect to its capital structure;
(e) acquire any Stockholder corporation, partnership, limited liability company, or other business organization or division thereof, or acquire or lease any assets other than in the payment of cash dividendsOrdinary Course;
7.2.10. amend its Organizational Documents or effect any stock split, stock combination, stock dividend or similar action;
7.2.11. acquire, sell, lease, license or otherwise dispose of any business or material investment or any material assets, except in the ordinary course of business consistent with past practice or as are required under Contracts in effect on the date hereof;
7.2.12. merge, combine or consolidate with any Person;
7.2.13. make, change or revoke any material Tax election or Tax accounting method; file any income or other material Tax Return; file any material amendment to any material Tax Return; request, or enter into, any ruling, settlement or other compromise with any Taxing Authority; or agree to the extension of the period of time within which any Tax may be assessed; provided, however, in the case of any income or other material Tax Return timely provided to Parent for its review and consent, the Company may (or may cause an Acquired Company, as applicable, tof) file any income or other material Tax Return without Parent’s consent if such consent has been unreasonably delayed and if necessary to file any such Tax Return by its due date after taking advantage of any automatic extensions;
7.2.14. enter into any settlement or compromise of any Action if such settlement or compromise would involve the payment by an Acquired Company of more than $100,000 or the imposition of any material non-monetary restrictions upon any Acquired Company;
7.2.15. adopt a plan of complete or partial liquidation, dissolution, restructuring or recapitalization;
7.2.16. paymerger, loan or advance any amount toconsolidation, or sell, transfer recapitalization of the Company or lease any of its assets Subsidiaries;
(g) incur any indebtedness for borrowed money or issue any debt securities outside the Ordinary Course;
(h) enter into any contract or agreement which itself provides for payments by or to the Company or any of its Subsidiaries in excess of $100,000 or has a term longer than 12 months (except purchases and sales of inventory in the Ordinary Course);
(i) except as reflected in the capital budget of the Company, authorize, or make any commitment with respect to, any single capital expenditure that is in excess of $250,000 or capital expenditures that are, in the aggregate, in excess of $500,000 for the Company and its Subsidiaries taken as a whole;
(j) fail to exercise any rights of renewal with respect to any material Leased Real Property that by its terms would otherwise expire, unless the average monthly rent for any such property during the renewal term would increase by more than 15% of the monthly rent immediately prior to any such renewal;
(k) enter into, adopt, materially amend, or terminate any bonus, profit sharing, compensation, termination, stock option, stock appreciation right, restricted stock, performance unit, pension, retirement, deferred compensation, employment, severance, or other employee benefit agreement, trust, plan, fund, or other arrangement for the benefit or welfare of any director, officer, or employee, or increase in any material respect the compensation or fringe benefits of any director, officer, or employee (except for increases of the compensation or benefits for such director, officer, or employee that are (i) required by Law, (ii) pursuant to any plans or agreements in existence on the date hereof, or (iii) made in the Ordinary Course consistent with past practice and no greater than the larger of $5,000 or 5% of the prior compensation and benefits, as the case may be, received by such director, officer, or employee) or pay any material benefit not required by any existing plan and arrangement or enter into any agreement Contract, agreement, commitment, or arrangement withto do any of the foregoing, any officerother than as either required by Law or contract, director or Affiliate of any Acquired Company, except for as may occur in the ordinary course of business and Ordinary Course consistent with past practice;
7.2.17. grant (l) make any change in any method of accounting or accounting practice, system, principle or policy, except as required by GAAP;
(m) sell, transfer, convey, assign, or otherwise create or consent to the creation dispose of any easementof its assets or properties, covenantexcept in the Ordinary Course;
(n) waive, restrictionrelease, assessment settle, or charge materially affecting cancel any Leased Real Property claims against third parties or debts owing to it, or any part thereof; commit rights that have any waste value, individually in excess of $25,000, or nuisance on in the aggregate in excess of $200,000;
(o) waive, release, settle, or cancel any Leased Real Property; claims against third parties or debts owing to it, or any rights that have any value, outside of the Ordinary Course;
(p) make any material changes loans, advances, or capital contributions to, or investments in, any other Person, except for advances to individual employees that are in the construction amount of $1,000 or condition of any Leased Real Propertyless;
7.2.18. terminate or allow to be terminated any insurance policy in effect as of the date hereof(q) except for capital expenditures contemplated by clause (i), acquire, lease, or fail to maintain, with financially responsible insurance companies, insurance on tangible encumber any assets of any Acquired Company and on the Business in such amounts and against such risks and losses as that are consistent with past practice;
7.2.19. enter into any Contract that if entered into prior to the date hereof would be a Material Company Contract or Customer Contracts or otherwise amend or modify any Material Company Contract or Permit that is material to the Business Company, whether or not such acquisition, lease, or Encumbrance is in the Ordinary Course (other than acquisitions of inventory in the Ordinary Course);
(r) file any amended Tax Return or any claim for refund of Taxes, amend any payment of Taxes paid by or on behalf of the Company or any Subsidiary, waive or extend the statute of limitations in respect of any Taxes, make, revoke, or amend any Tax election, change any method of Tax accounting or Tax procedure or practice, or settle or compromise any claim relating to Taxes;
(s) pay any amount, perform any obligation, or agree to pay any amount or perform any obligation, in settlement or compromise of any suit or claim of liability against any Seller or any Affiliate of any Seller;
(t) terminate, modify, amend, or otherwise alter or change in any material term or condition thereof or grant any consents thereunder;
7.2.20. make any material change to respect any of the cash management practices terms or provisions of any Real Property Lease or any debt instrument relating to any Company Indebtedness;
(u) except in the Ordinary Course, terminate, modify, amend, or otherwise alter or change any of the Business, including but not limited to, discontinue the payment terms or provisions of its accounts payable that are payable in the ordinary course of business or materially deviate from or materially alter any of its practices, policies or procedures in paying accounts payable or collecting accounts receivableContract; or
7.2.21. agree (v) agree, whether in writing or commit otherwise, to do any of the things referred to elsewhere in Section 7.2.1 through 7.2.20 aboveforegoing.
Appears in 1 contract
Conduct of Business Prior to Closing. Prior to The Company has agreed in the earlier Merger Agreement that during the period from the date of the Closing or Merger Agreement through the termination of this Agreement in accordance with Article 8Effective Time, except as otherwise expressly permitted or required by this Agreement, as otherwise consented to by Parent (such consent not to be unreasonably withheld, conditioned or delayed) or as set forth on Schedule 7.2, the Company shall, and shall cause the other Acquired Companies to, conduct their business in all material respects in the ordinary course of business, consistent with past practices and use their commercially reasonable efforts to (i) preserve intact the Acquired Company’s current business organization, (ii) keep available the services of current officers, employees and agents of the Acquired Companies and (iii) maintain in good state relations and good will with customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents and others having business relationships with the Acquired Companies. Without limiting the generality of the foregoing, prior to the earlier of the Closing or the termination of this Agreement extent Parent otherwise consents in accordance with Article 8, without the prior writing (which consent of Parent (will not to be unreasonably withheld, conditioned or delayed), and except as otherwise contemplated by this Agreement or (ii) as set forth on Schedule 7.2, in the disclosure schedule that the Company shall notdelivered to Parent in connection with the execution of the Merger Agreement, and shall not cause (iii) as contemplated or permit permitted by the Merger Agreement, (iv) required by the express terms of any other Acquired Company to:
7.2.1. increase material contract of the compensation Company, or (including bonusesv) payable on or after the date hereof to any director or officer of such Acquired Company except for increases provided for in any Contracts or plans in effect on the date hereof or in the ordinary course of business consistent with past practices;
7.2.2. adopt or amend any Employee Plan that increases the benefits to any employee, officer or director of an Acquired Company other than in the ordinary course of business or as may be required by applicable law;
7.2.3. , the Company will not do any of the following, subject to certain specified ordinary course exceptions: • amend its certificate of incorporation, bylaws or other comparable charter or organizational documents; • form, incorporate or organize any subsidiaries; • merge or consolidate the Company with any other individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, governmental entity or other entity of any kind (each, a “Person”) or restructure, reorganize or completely or partially liquidate or otherwise enter into any collective bargaining agreement;
7.2.4. agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses; • acquire assets from any other Person, other than acquisitions of assets valued less than $100,000 individually or $250,000 in the aggregate; • issue, sell sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or otherwise dispose enter into any contract or understanding with respect to the voting of, any shares of capital stock of the Company, securities convertible or exchangeable into or exercisable for any such shares of capital stock, or any options, warrants or other rights of any kind to acquire any such shares of capital stock or such convertible or exchangeable securities (other Equity Interests than (A) the Support Agreements and (B) the issuance of shares of capital stock in respect of Company’s equity awards outstanding as of the date of the Merger Agreement or grant issued after the date of the Merger Agreement in accordance with the Merger Agreement; • enter into any options contracts or other rights arrangements between the Company, on the one hand, and any director or executive officer of the Company or any Person beneficially owning five percent or more of the outstanding Shares or shares of common stock of any of their respective Affiliates, on the other hand, except for compensatory arrangements consistent with the terms of the Merger Agreement and transactions with Parent or its Affiliates; • create or incur any encumbrance; • make any loans, advances, guarantees or capital contributions in excess of $50,000 to or investments in any Person; • 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 (including with respect to the Company, for the avoidance of doubt, Shares); • reclassify, split, combine, subdivide or redeem, purchase or obtain (including upon conversionotherwise acquire, exchange directly or exercise of other securities) indirectly, any of its capital stock or other Equity Interests securities convertible or exchangeable into or exercisable for any shares of its capital stock; • incur any indebtedness (other than any including the issuance of Shares upon exercise of any Option in effect on the date hereof and in accordance with the terms thereof);
7.2.5. incurdebt securities, assume warrants or guarantee other rights to acquire any Indebtedness, other than under credit facilities in existence on the date hereof in the ordinary course of business and other than any accrual of interest under any notes in existence on the date hereof, it being understood that any Indebtedness incurred under this Section 7.2.5 shall constitute Refinancing Indebtedness;
7.2.6. voluntarily subject any of the material properties or assets of the Acquired Companies to any Encumbrances (other than Permitted Encumbrances);
7.2.7. make any changes in its methods of accounting or accounting practices or policies (including with respect to reserves) other than those required by GAAP;
7.2.8. enter into any commitment for capital expenditures (including entering into any capital leasedebt security) in excess of $250,000 in the aggregate50,000;
7.2.9. declare, set aside or pay any dividend or make any other distribution to any Stockholder other than the payment of cash dividends;
7.2.10. amend its Organizational Documents or effect any stock split, stock combination, stock dividend or similar action;
7.2.11. acquire, sell, lease, license or otherwise dispose of any business or material investment or any material assets, except in the ordinary course of business consistent with past practice or as are required under Contracts in effect on the date hereof;
7.2.12. merge, combine or consolidate with any Person;
7.2.13. make, change or revoke any material Tax election or Tax accounting method; file any income or other material Tax Return; file any material amendment to any material Tax Return; request, or enter into, any ruling, settlement or other compromise with any Taxing Authority; or agree to the extension of the period of time within which any Tax may be assessed; provided, however, in the case of any income or other material Tax Return timely provided to Parent for its review and consent, the Company may (or may cause an Acquired Company, as applicable, to) file any income or other material Tax Return without Parent’s consent if such consent has been unreasonably delayed and if necessary to file any such Tax Return by its due date after taking advantage of any automatic extensions;
7.2.14. enter into any settlement or compromise of any Action if such settlement or compromise would involve the payment by an Acquired Company of more than $100,000 or the imposition of any material non-monetary restrictions upon any Acquired Company;
7.2.15. adopt a plan of complete or partial liquidation, dissolution, restructuring or recapitalization;
7.2.16. pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, any officer, director or Affiliate of any Acquired Company, except for in the ordinary course of business and consistent with past practice;
7.2.17. grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge materially affecting any Leased Real Property or any part thereof; commit any waste or nuisance on any Leased Real Property; or make any material changes in the construction or condition of any Leased Real Property;
7.2.18. terminate or allow to be terminated any insurance policy in effect as of the date hereof, or fail to maintain, with financially responsible insurance companies, insurance on tangible assets of any Acquired Company and on the Business in such amounts and against such risks and losses as are consistent with past practice;
7.2.19. enter into any Contract that if entered into prior to the date hereof would be a Material Company Contract or Customer Contracts or otherwise amend or modify any Material Company Contract or Permit that is material to the Business or waive any material term or condition thereof or grant any consents thereunder;
7.2.20. make any material change to any of the cash management practices of the Business, including but not limited to, discontinue the payment of its accounts payable that are payable in the ordinary course of business or materially deviate from or materially alter any of its practices, policies or procedures in paying accounts payable or collecting accounts receivable; or
7.2.21. agree or commit to do any of the things referred to elsewhere in Section 7.2.1 through 7.2.20 above.
Appears in 1 contract
Samples: Offer to Purchase (Snapfish, LLC)
Conduct of Business Prior to Closing. Prior to The Company agrees that, between the earlier of date hereof and the Closing or the termination of this Agreement in accordance with Article 8, except as otherwise expressly permitted or required by this Agreement, as otherwise consented to by Parent (such consent not to be unreasonably withheld, conditioned or delayed) or as set forth on Schedule 7.2Date, the Company shall, and its Subsidiaries shall cause (a) operate the other Acquired Companies to, conduct their business in all material respects in the ordinary course of business, consistent with past practices Company Business and use and maintain their commercially reasonable efforts to (i) preserve intact the Acquired Company’s current business organization, (ii) keep available the services of current officers, employees and agents of the Acquired Companies and (iii) maintain in good state relations and good will with customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents and others having business relationships with the Acquired Companies. Without limiting the generality of the foregoing, prior to the earlier of the Closing or the termination of this Agreement in accordance with Article 8, without the prior consent of Parent (not to be unreasonably withheld, conditioned or delayed), and except as otherwise contemplated by this Agreement or as set forth on Schedule 7.2, the Company shall not, and shall not cause or permit any other Acquired Company to:
7.2.1. increase the compensation (including bonuses) payable on or after the date hereof to any director or officer of such Acquired Company except for increases provided for in any Contracts or plans in effect on the date hereof or respective assets solely in the ordinary course of business consistent with past practices34 practice, (b) use all commercially reasonable efforts to preserve their respective business relationships with their customers, employees and other Persons having a business relationship with the Company and its Subsidiaries, (c) keep all Material Contracts and Intellectual Property in full force and effect and (d) comply in all material respects with all applicable Legal Requirements. Except as described on Schedule 5.1 and without limiting the generality of the foregoing, the Company specifically agrees that, without Parent’s prior written consent, the Company and its Subsidiaries will not:
(i) authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), or modify the terms of, any Securities or other equity equivalents of the Company or any of its Subsidiaries;
7.2.2. adopt (ii) enter into any agreement or amend agreements (or discussions regarding any Employee Plan that increases such agreement) with respect to the benefits sale, transfer, pledge or other disposition of the Securities of the Company or any of its Subsidiaries, or consummate any such sale, transfer, pledge or other disposition of Securities;
(iii) change the authorized capital stock or Securities of the Company or any of its Subsidiaries or make any change to the Certificate of Incorporation, Bylaws or other governing documents of the Company or any of its Subsidiaries;
(iv) merge into or with, or consolidate with, or acquire the business, assets or securities of, any Person or, except as set forth on Schedule 5.1, make any material capital expenditure;
(v) enter into any agreement or agreements (or discussions regarding any such agreement) for the sale or transfer of any material assets, or consummate any such sale or transfer, except for sales of obsolete equipment no longer usable in the operation of the Company Business;
(vi) adopt, amend, terminate or make any other change to any employeePlan or Benefit Program, except as required by applicable Legal Requirements;
(vii) increase the compensation payable to any officer or director of the Company or any of its Subsidiaries;
(viii) make any increase of more than 5% in the hourly or annualized compensation of any non-officer employee of the Company or any of its Subsidiaries or make increases in the hourly or annualized compensation of all such non-officer employees that would increase the Company’s and its Subsidiaries’ costs by more than $100,000 in the aggregate;
(ix) commit any act or omit to do any act which effectuates or causes an Acquired amendment or modification to, or a material breach of, or a termination of (excluding any expiration due to the passage of time), any Material Contract, or enter into any lease for real property that is not terminable without penalty on no more than sixty (60) days notice;
(x) fail to use, preserve and maintain the assets of the Company other than and its Subsidiaries on a basis consistent with past practice or fail to keep such assets, in all material respects, in good working condition, ordinary wear and tear excepted;
(xi) fail to maintain the insurance policies covering the assets of the Company and its Subsidiaries that are in effect as of the date of this Agreement;
(xii) fail to pay the debts and obligations incurred by the Company and its Subsidiaries as they become due or waive, release or assign any material right relating to the Company Business or assets of the Company or any of its Subsidiaries;
(xiii) create, incur, assume, guarantee or otherwise become liable for or obligated with respect to any Indebtedness (except for Indebtedness incurred in the ordinary course of business under the terms of the Company’s Senior Secured Credit Facility in existence as of the date of this Agreement), or as may be required by applicable law;
7.2.3. enter into create, assume or permit to exist any collective bargaining agreement;
7.2.4. issue, sell Encumbrance upon any assets or otherwise dispose Securities of any capital stock the Company or other Equity Interests or grant any options or other rights to purchase or obtain (including upon conversion, exchange or exercise of other securities) any of its capital stock or other Equity Interests (other than any issuance of Shares upon exercise of any Option in effect on the date hereof and in accordance with the terms thereof)Subsidiaries, except for Permitted Encumbrances;
7.2.5. incur(xiv) fail to maintain books, assume or guarantee any Indebtedness, other than under credit facilities in existence on accounts and records of the date hereof Company and its Subsidiaries in the ordinary course of business usual manner and other than any accrual of interest under any notes in existence on the date hereofa basis consistent with past practice, it being understood that any Indebtedness incurred under this Section 7.2.5 shall constitute Refinancing Indebtedness;
7.2.6. voluntarily subject any of the material properties except as required by Law or assets of the Acquired Companies to any Encumbrances (other than Permitted Encumbrances);
7.2.7. make any by GAAP, or materially change accounting policies or procedures, including changes in its methods of accounting or accounting practices or policies (including and procedures with respect to reserves) other than those salaries and benefits, bad debt, charitable donations, lease payments and non-core business expenses, except as required by Law or by GAAP;
7.2.8. enter into any commitment for capital expenditures (including entering into any capital leasexv) in excess of $250,000 in the aggregate;
7.2.9. declare, set aside or pay any dividend or make any other distribution to any Stockholder other than the payment of cash dividends;
7.2.10. amend its Organizational Documents or effect any stock split, stock combination, stock dividend or similar action;
7.2.11. acquire, sell, lease, license or otherwise dispose of any business or material investment or any material assets, except in the ordinary course of business consistent with past practice or as are required under Contracts in effect on the date hereof;
7.2.12. merge, combine or consolidate with any Person;
7.2.13. make, change or revoke any material Tax election or election, change any annual Tax accounting method; period, adopt or change any method of Tax accounting, file any income or other material amended Tax Return; file any material amendment to any material Tax Return; request, or enter into, any ruling, settlement or other compromise with any Taxing Authority; or agree to the extension of the period of time within which any Tax may be assessed; provided, however, in the case of any income or other material Tax Return timely provided to Parent for its review and consent, the Company may (or may cause an Acquired Company, as applicable, to) file any income or other material Tax Return without Parent’s consent if such consent has been unreasonably delayed and if necessary to file any such Tax Return by its due date after taking advantage of any automatic extensions;
7.2.14. enter into any settlement “closing agreement” within the meaning of Code § 7121 (or any similar provision of state, local or non-U.S. law), settle or compromise any Tax claim or assessment, surrender any right to claim a Tax refund, consent to any extension or waiver of the limitations period applicable to any Action if such settlement Tax claim or compromise would involve the payment by an Acquired Company of more than $100,000 assessment, apply for or the imposition of request any Tax ruling, or take or omit to take any other material non-monetary restrictions upon any Acquired Companyaction related to Taxes;
7.2.15. adopt a plan of complete or partial liquidation, dissolution, restructuring or recapitalization;
7.2.16. pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, any officer, director or Affiliate of any Acquired Company, except for in the ordinary course of business and consistent with past practice;
7.2.17. grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge materially affecting any Leased Real Property or any part thereof; commit any waste or nuisance on any Leased Real Property; or make any material changes in the construction or condition of any Leased Real Property;
7.2.18. terminate or allow to be terminated any insurance policy in effect as of the date hereof, or fail to maintain, with financially responsible insurance companies, insurance on tangible assets of any Acquired Company and on the Business in such amounts and against such risks and losses as are consistent with past practice;
7.2.19. enter into any Contract that if entered into prior to the date hereof would be a Material Company Contract or Customer Contracts or otherwise amend or modify any Material Company Contract or Permit that is material to the Business or waive any material term or condition thereof or grant any consents thereunder;
7.2.20. (xvi) make any material change in its methods or practices for billing or collecting accounts receivable or paying accounts payable;
(xvii) fail to promptly inform Parent in writing of any event, condition or circumstance that has resulted in or that would be reasonably expected to result in a Company Material Adverse Effect;
(xviii) fail to maintain spare equipment at levels consistent with the past practice of the cash management practices of the BusinessCompany and its Subsidiaries;
(xix) settle any (A) litigation or arbitration, including but not limited to, discontinue the payment of its accounts payable (B) claim or other matter that are payable would result in the ordinary course of business Company or materially deviate from or materially alter any of its practicesSubsidiaries being enjoined in any material respect from engaging in the transactions contemplated by this Agreement or that would reasonably be expected to materially adversely affect the Company Business or (C) material claim or other action, policies including any claim or procedures in paying accounts payable action as to which such settlement would involve the Company or collecting accounts receivableits Subsidiaries being subject to any material limitations or restrictions; or
7.2.21. agree (xx) enter into any agreement, commitment or commit undertaking to do any of the things referred activities prohibited by the foregoing provisions or that is otherwise inconsistent with the foregoing. Without in any way limiting any party’s rights or obligations under this Agreement, the parties understand and agree that (A) during the period beginning on the date of this Agreement and ending at the Effective Time (the “Interim Period”) nothing contained in this Agreement shall give Parent or MergerCo, directly or indirectly, the right to elsewhere in Section 7.2.1 through 7.2.20 abovecontrol or direct the operation of the Company Business and (B) during the Interim Period, the Company, at the direction of the Company Board and the Equity Holders, and the Subsidiaries of the Company, at the direction of the governing bodies and equity holders of each respective Subsidiary, shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over their respective businesses and operations.
Appears in 1 contract
Samples: Merger Agreement (Forward Air Corp)
Conduct of Business Prior to Closing. Prior to the earlier (a) Except as disclosed in Section 6.1(a) of the Closing or the termination of this Agreement in accordance with Article 8, except as otherwise expressly permitted or required by this Agreement, as otherwise consented to by Parent (such consent not to be unreasonably withheld, conditioned or delayed) or as set forth on Schedule 7.2Disclosure Schedule, the Company shallcovenants that until the Closing it will use its commercially reasonable efforts, and shall cause the other Acquired Companies toto continue, conduct their business in all material respects in the ordinary course of business, a manner consistent with the past practices and use their commercially reasonable efforts practice of the Business, to (i) preserve intact the Acquired Company’s current business organization, (ii) keep available the services of current officersthe Company's officers and employees, employees to maintain and agents preserve intact the Business in all material respects and to maintain in all material respects the ordinary and customary relationships of the Acquired Companies and (iii) maintain in good state relations and good will Business with its suppliers, customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents distributors and others having business relationships with the Acquired Companies. Without limiting the generality of the foregoingit with a view toward preserving for Buyer, prior to the earlier of and after the Closing or Date, the termination of this Agreement Business and the goodwill associated therewith. Until the Closing, the Company shall continue to operate and conduct the Business in accordance the ordinary course consistent with Article 8past practice, and shall not, without the prior consent written approval of Parent Buyer (which approval shall not to be unreasonably withheld, conditioned withheld or delayed), delayed and except shall in any event be provided or denied within five days after such approval is requested from Buyer) or as otherwise contemplated by this Agreement and Section 6.1(a) of the Disclosure Schedule take any of the following actions:
(i) with respect to the Company, amend the Operating Agreement or as set forth on Schedule 7.2Certificate of Formation in any material respect, issue or agree to issue any additional Company Units of any class or series (other than Company Units issued upon the exercise of currently outstanding options pursuant to Section 2.4) or issue or enter into or agree to issue or enter into any securities convertible into or exercisable or exchangeable for Company Units, or issue any options, warrants or other rights to acquire any Company Units, or sell, transfer or otherwise dispose of or encumber any Company Units of any class or series of equity interests of the Company shall notor declare, and shall not cause set aside, make or permit pay any dividend or other Acquired distribution in respect of its Company to:
7.2.1. increase the compensation Units (including bonusesin cash or otherwise) payable on or after the date hereof to any director purchase or officer of such Acquired redeem Company Units (other than Units repurchased from Optionholders under Section 2.4), except for increases provided for distributions by the Company to its Members in amounts intended to allow the Members to make required state and federal income Tax payments.
(ii) sell, transfer or otherwise dispose of or encumber any Contracts of its properties or plans in effect on the date hereof or Assets, other than (A) in the ordinary course of business consistent with past practices;
7.2.2. adopt practice; (B) properties or amend any Employee Plan that increases assets the benefits to any employee, officer net book value or director market value of an Acquired Company other than which does not exceed in the ordinary course of business or as may be required aggregate $100,000; (C) cash distributions by applicable law;
7.2.3. enter into any collective bargaining agreement;
7.2.4. issue, sell or otherwise dispose of any capital stock or other Equity Interests or grant any options or other rights the Company to purchase or obtain (including upon conversion, exchange or exercise of other securities) any of its capital stock or other Equity Interests (other than any issuance of Shares upon exercise of any Option in effect on the date hereof and Members in accordance with the terms thereofOperating Agreement; and (D) under any contract with a customer which restricts the use of equipment acquired for use in the performance of such contract;
(iii) except as required by Law or contractual obligations, except for borrowings under the Company's revolving credit facility and except for the Optionholder Exchange Notes, (A) create, incur or assume any material long-term or short-term debt (including obligations in respect of capital leases), (B) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for any material obligations of any Person or (C) make any material loans, advances or capital contributions to or investments in any Person (except for customary travel and entertainment advances to employees);
7.2.5. incur, assume or guarantee (A) grant any Indebtedness, other than under credit facilities in existence on the date hereof material increase in the ordinary course compensation of business and other than any accrual of interest under any notes in existence on the date hereof, it being understood that any Indebtedness incurred under this Section 7.2.5 shall constitute Refinancing Indebtedness;
7.2.6. voluntarily subject any employees of the material properties or assets of the Acquired Companies to any Encumbrances (other than Permitted Encumbrances);
7.2.7. make any changes in its methods of accounting or accounting practices or policies (including with respect to reserves) other than those required by GAAP;
7.2.8. enter into any commitment Company, except for capital expenditures (including entering into any capital lease) in excess of $250,000 increases in the aggregate;
7.2.9. declare, set aside or pay any dividend or make any other distribution to any Stockholder other than the payment compensation of cash dividends;
7.2.10. amend its Organizational Documents or effect any stock split, stock combination, stock dividend or similar action;
7.2.11. acquire, sell, lease, license or otherwise dispose of any business or material investment or any material assets, except employees in the ordinary course of business consistent with past practice or as are required under Contracts and increases pursuant to collective bargaining agreements in effect on the date hereof;
7.2.12. mergehereof and listed in Section 4.8(a) of the Disclosure Statement, combine (B) hire new employees other than in the ordinary course of business consistent with past practice, (C) enter into any employment, severance, consulting or consolidate other compensation agreement with any Person;
7.2.13. makeexisting director, change officer or revoke employee or (D) commit to any additional pension, profit-sharing, deferred compensation, group insurance, severance pay, retirement or other employee benefit plan, fund or similar arrangement or amend in any material Tax election respect or Tax accounting method; file any income or other material Tax Return; file commit itself to amend in any material amendment to respect any material Tax Return; requestof such plans, funds or enter into, any ruling, settlement or other compromise with any Taxing Authority; or agree to the extension of the period of time within which any Tax may be assessedsimilar arrangements; provided, however, that nothing herein shall be deemed to prohibit the payment prior to the 40 42 Closing of bonuses described in Section 6.1(a)(iv) of the case of any income or other material Tax Return timely provided Disclosure Schedule to Parent for its review and consent, the Company may (or may cause an Acquired Company, as applicable, to) file any income or other material Tax Return without Parent’s consent if such consent has been unreasonably delayed and if necessary to file any such Tax Return by its due date after taking advantage of any automatic extensionsOptionholders;
7.2.14. enter into any settlement or compromise of any Action if such settlement or compromise would involve the payment by an Acquired Company of more than $100,000 or the imposition of (v) cancel any material non-monetary restrictions upon any Acquired third party indebtedness owed to the Company;
7.2.15. adopt a plan of complete (vi) acquire by merging or partial liquidation, dissolution, restructuring or recapitalization;
7.2.16. pay, loan or advance any amount toconsolidating with, or sellby purchasing a substantial portion of the assets of, transfer or lease by any of its other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire any material assets to(other than inventory); or
(vii) make any capital expenditure, or enter into any agreement or arrangement withcommitment to make any capital expenditure, in excess of 110% of the amount budgeted therefor as set forth in Section 6.1(a)(vii) of the Disclosure Schedule;
(viii) from and after the date hereof enter into any officer, director or Affiliate of any Acquired Company, except for contract other than contracts in the ordinary course of business and consistent with past practicecontracts involving the payment or provision of good and services of less than $100,000;
7.2.17. grant (ix) settle any litigation or otherwise create or consent to the creation other proceeding other than (A) settlement of any easement, covenant, restriction, assessment or charge materially affecting any Leased Real Property or any part thereof; commit any waste or nuisance on any Leased Real Property; or make any material changes workers' compensation claims and (B) other settlements involving less than $10,000 in the construction or condition of any Leased Real Propertyaggregate;
7.2.18. terminate or allow to be terminated any insurance policy in effect as of the date hereof, or (x) fail to maintainuse reasonable commercial efforts to maintain the Assets in good operating condition and repair, with financially responsible insurance companies, insurance on tangible assets of any Acquired Company ordinary wear and on the Business in such amounts and against such risks and losses as are consistent with past practicetear excepted;
7.2.19. enter into any Contract that if entered into prior (xi) fail to the date hereof would be a Material Company Contract or Customer Contracts or otherwise amend or modify any Material Company Contract or Permit that is material use reasonable commercial efforts to the Business or waive any material term or condition thereof or grant any consents thereunder;
7.2.20. make any material change to maintain in force any of the cash management practices insurance policies listed in Section 4.17 of the Business, including but not limited to, discontinue the payment of its accounts payable that are payable in the ordinary course of business or materially deviate from or materially alter any of its practices, policies or procedures in paying accounts payable or collecting accounts receivableDisclosure Schedule; or
7.2.21. agree (xii) agree, whether in writing or commit otherwise, to do any of the things referred foregoing.
(b) The Company covenants and agrees that, prior to elsewhere the Closing, it shall, to the extent that it has knowledge thereof, promptly notify Buyer in Section 7.2.1 through 7.2.20 abovewriting of all events, circumstances, facts and occurrences arising subsequent to the date of this Agreement which constitute a material breach of a representation or warranty or covenant of the Company in this Agreement.
(c) Until the Closing, Newco shall not operate or conduct any business, and shall not, without the prior written approval of Buyer, in Buyer's sole discretion, take any of the following actions:
(i) with respect to Newco, amend its Certificate of Incorporation or Bylaws, issue or agree to issue any additional capital stock of any class or series or issue or enter into or agree to issue or enter into any securities convertible into or exercisable or exchangeable for capital stock, or issue any options, warrants or other rights to acquire any capital stock of Newco,
Appears in 1 contract
Samples: Unit and Stock Purchase Agreement (Ducommun Inc /De/)
Conduct of Business Prior to Closing. Prior to The Company agrees that, between the earlier of date hereof and the Closing or the termination of this Agreement in accordance with Article 8Date, except as otherwise expressly permitted or required by this Agreement, as otherwise consented it shall operate and cause its Subsidiaries to by Parent (such consent not to be unreasonably withheld, conditioned or delayed) or as set forth on Schedule 7.2, the Company shall, and shall cause the other Acquired Companies to, conduct their business in all material respects operate in the ordinary course of business, consistent with past practices and use their commercially reasonable efforts to (i) preserve intact the Acquired Company’s current business organizationpractices, (ii) keep available the services of current officers, employees and agents of the Acquired Companies and (iii) maintain except as described in good state relations and good will with customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents and others having business relationships with the Acquired CompaniesSchedule 6.1 or as otherwise contemplated by this Agreement. Without limiting the generality In furtherance of the foregoing, the Company will not:
(a) change or introduce any method of management or operations except in the ordinary course of business and consistent with prior practices;
(b) authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the earlier issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or equity equivalents (including, without limitation, stock appreciation rights) (other than the Closing issuance of shares of Common Stock upon the exercise of Options or Warrants outstanding on the termination date of this Agreement in accordance with Article 8their present terms);
(c) make any change to the Company's Certificate of Incorporation or By-laws or the organizational documents of its Subsidiaries, without or change the prior consent authorized capital stock or equity interests of Parent the Company or any Subsidiary;
(not to be unreasonably withheldi) prepay any loans (if any) from its stockholders, conditioned officers or delayed)directors or any Person affiliated with any of the foregoing, and (ii) make any change in its borrowing arrangements, (iii) modify, amend or terminate any of its material contracts except in as otherwise contemplated by specifically provided in this Agreement or as set forth on Schedule 7.2, the Company shall not, and shall not cause or permit any other Acquired Company to:
7.2.1. increase the compensation (including bonuses) payable on or after the date hereof to any director or officer of such Acquired Company except for increases provided for in any Contracts or plans in effect on the date hereof or in the ordinary course of business consistent with past practicesor (iv) waive, release or assign any material rights or claims, other than in the ordinary course of business;
7.2.2. adopt (e) materially change accounting policies or amend any procedures, except as required by law or by GAAP;
(f) Except for the payment of bonuses and commissions under the Company Bonus Plan, Hospital and Specialist Account Executive Compensation Plan, Sales Compensation Plan - Executive Account Manager, PC Incentive Bonus Plan, VP of Managed Care National Accounts Bonus Plan, Regional Sales Director Commission Document and Account Executive Commission Program that are otherwise due and payable by their terms (a copy of each of the above mentioned Company Plans is attached hereto as Schedule 6.1(f)) and under the Sale and Employee Plan that increases Retention Program (to the benefits persons and in the amounts set forth on Schedule 6.1(f)), increase the rates of direct compensation or bonus compensation payable or to become payable to any employeeemployee of the Company or any Subsidiary, officer except in the ordinary course of business or director in accordance with the existing terms of an Acquired Company contracts entered into prior to the date of this Agreement;
(g) make any material acquisition or capital expenditure other than in the ordinary course of business or as may be required by applicable lawreserved against in the Company's annual budget;
7.2.3. enter into (h) declare, set aside, make or pay any collective bargaining agreementdividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock;
7.2.4. issue(i) reclassify, sell combine, split, subdivide or redeem, purchase or otherwise dispose of any capital stock acquire, directly or other Equity Interests or grant any options or other rights to purchase or obtain (including upon conversionindirectly, exchange or exercise of other securities) any of its capital stock except for repurchases of shares in connection with the termination of any employee or consultant pursuant to stock option agreements, restricted stock purchase agreements or stock award agreements, outstanding on the date of this Agreement;
(j) 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 financial obligations of any Person, or make any loans or advances, except that the Company may borrow such sums as it deems necessary under its existing revolving line of credit pursuant to the terms of its Credit Agreement (but may not amend the Credit Agreement);
(k) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any corporation, partnership, other Equity Interests business organization or any division thereof or any material amount of assets;
(l) authorize any capital commitment or capital lease which is in excess of $100,000 or capital expenditures which are, in the aggregate, in excess of $250,000;
(m) mortgage, pledge or subject to Encumbrances, any of its assets or properties or agree to do so other than in the ordinary course of business;
(n) enter into or agree to enter into any employment agreement (other than any issuance offer letters for non-executive new hires entered into in the ordinary course of Shares upon exercise of any Option in effect on the date hereof and in accordance with the terms thereofbusiness);
7.2.5. incur(o) make any Tax election or settle or compromise any federal, assume state, local or guarantee foreign income material Tax liability;
(p) settle or compromise any Indebtednesspending or threatened suit, action or claim (other than claims related to accounts receivable of the Company which were fully reserved in the balance sheet of the Company as of the Balance Sheet Date) or initiate any litigation against any third party;
(q) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise), other than under credit facilities the payment, discharge or satisfaction, in existence on the date hereof ordinary course of business, of liabilities reflected or reserved against in the balance sheet of the Company as of the Balance Sheet Date or subsequently incurred in the ordinary course of business and other than any accrual of interest under any notes in existence on the date hereof, it being understood that any Indebtedness incurred under this Section 7.2.5 shall constitute Refinancing Indebtedness;
7.2.6. voluntarily subject any of the material properties or assets of the Acquired Companies to any Encumbrances (other than Permitted Encumbrances);
7.2.7. make any changes in its methods of accounting or accounting practices or policies (including with respect to reserves) other than those required by GAAP;
7.2.8. enter into any commitment for capital expenditures (including entering into any capital lease) amounts not in excess of $250,000 in the aggregate;250,000; or
7.2.9. declare, set aside or pay any dividend or make any other distribution to any Stockholder other than the payment of cash dividends;
7.2.10. amend its Organizational Documents or effect any stock split, stock combination, stock dividend or similar action;
7.2.11. acquire, sell, lease, license or otherwise dispose of any business or material investment or any material assets, except in the ordinary course of business consistent with past practice or as are required under Contracts in effect on the date hereof;
7.2.12. merge, combine or consolidate with any Person;
7.2.13. make, change or revoke any material Tax election or Tax accounting method; file any income or other material Tax Return; file any material amendment to any material Tax Return; request, or enter into, any ruling, settlement or other compromise with any Taxing Authority; or agree to the extension of the period of time within which any Tax may be assessed; provided, however, in the case of any income or other material Tax Return timely provided to Parent for its review and consent, the Company may (or may cause an Acquired Company, as applicable, tor) file any income or other material Tax Return without Parent’s consent if such consent has been unreasonably delayed and if necessary to file any such Tax Return by its due date after taking advantage of any automatic extensions;
7.2.14. enter into any settlement executory agreement, commitment or compromise of any Action if such settlement or compromise would involve the payment by an Acquired Company of more than $100,000 or the imposition of any material non-monetary restrictions upon any Acquired Company;
7.2.15. adopt a plan of complete or partial liquidation, dissolution, restructuring or recapitalization;
7.2.16. pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, any officer, director or Affiliate of any Acquired Company, except for in the ordinary course of business and consistent with past practice;
7.2.17. grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge materially affecting any Leased Real Property or any part thereof; commit any waste or nuisance on any Leased Real Property; or make any material changes in the construction or condition of any Leased Real Property;
7.2.18. terminate or allow to be terminated any insurance policy in effect as of the date hereof, or fail to maintain, with financially responsible insurance companies, insurance on tangible assets of any Acquired Company and on the Business in such amounts and against such risks and losses as are consistent with past practice;
7.2.19. enter into any Contract that if entered into prior to the date hereof would be a Material Company Contract or Customer Contracts or otherwise amend or modify any Material Company Contract or Permit that is material to the Business or waive any material term or condition thereof or grant any consents thereunder;
7.2.20. make any material change to any of the cash management practices of the Business, including but not limited to, discontinue the payment of its accounts payable that are payable in the ordinary course of business or materially deviate from or materially alter any of its practices, policies or procedures in paying accounts payable or collecting accounts receivable; or
7.2.21. agree or commit undertaking to do any of the things referred activities prohibited by the foregoing provisions. Prior to elsewhere the Closing the Company shall be permitted to (a) make scheduled payments under the Credit Agreement and (b) renew each of the insurance policies set forth on Schedule 4.15 for successive one month periods until this Agreement is either terminated or a Closing occurs; provided, that, in Section 7.2.1 through 7.2.20 abovethe event of such renewal, or renewals, the cost of such renewal, or renewals (the "Renewal Cost"), shall be credited to the Common Equity Holders at Closing by way of a reduction of the Company Expenses by an amount equal to the Renewal Cost.
Appears in 1 contract
Samples: Merger Agreement (Laboratory Corp of America Holdings)
Conduct of Business Prior to Closing. Prior to the earlier of the Closing or the termination of this Agreement in accordance with Article 8, except (a) Except as otherwise expressly provided, permitted or required by this Agreementherein, as otherwise consented to by Parent (such consent not to be unreasonably withheld, conditioned or delayed) or as set forth on Schedule 7.25.1, the Company shall, and shall cause the other Acquired Companies to, conduct their business as required by Law or as consented to in all material respects in the ordinary course of business, consistent with past practices and use their commercially reasonable efforts to (i) preserve intact the Acquired Company’s current business organization, (ii) keep available the services of current officers, employees and agents of the Acquired Companies and (iii) maintain in good state relations and good will with customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents and others having business relationships with the Acquired Companies. Without limiting the generality of the foregoing, prior to the earlier of the Closing or the termination of this Agreement in accordance with Article 8, without the prior consent of writing by Parent (which consent shall not to be unreasonably withheld, conditioned or delayed), during the period commencing on the date of this Agreement and ending at the Effective Time or such earlier date as this Agreement may be terminated in accordance with its terms (the “Pre-Closing Period”), the Company and each of their respective Subsidiaries shall carry on its business in the ordinary course of business and in accordance with past practices.
(b) Without limiting the generality of Section 5.1(a), except as otherwise contemplated expressly provided, permitted or required herein, as required by this Agreement Law or as set forth on Schedule 7.25.1, during the Pre-Closing Period, the Company shall not, and shall not cause or permit any of its Subsidiaries to, directly or indirectly, do any of the following without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed):
(i) split, combine, recapitalize or reclassify any shares of common stock or other Acquired equity interests;
(ii) declare, set aside, make or pay any dividend or other distribution in respect of shares of common stock or any other equity interests of the Company to:or any of its Subsidiaries (other than in cash);
7.2.1. increase (iii) authorize for issuance, issue, deliver or sell or agree or commit to issue, deliver or sell (whether through the compensation (including bonuses) payable on issuance or after granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise but except for issuances pursuant to Company Options outstanding as of the date hereof and set forth in the Disclosure Schedules) any equity interests;
(iv) redeem, purchase or repurchase any shares of common stock or equity interests;
(v) make any change to the certificate of incorporation, certificate of formation, limited liability company agreement or other organizational documents of the Company and its Subsidiaries;
(vi) create, incur, guarantee or assume any Company Debt (including obligations in respect of capital leases), except for borrowings under the Company’s or any of its Subsidiaries’ current credit facilities, the accrual of interest under existing Company Debt or Company Debt that will be satisfied in full prior to or at the Closing;
(vii) knowingly waive, release or assign any rights or claims with a fair market value, individually or in the aggregate, in excess of $50,000 (including any write-off or other material compromise of any accounts receivable of the Company or any of its Subsidiaries in an amount in excess of $50,000) other than in the ordinary course of business;
(viii) change accounting policies or procedures, except as required by GAAP;
(ix) (A) increase the rates of cash compensation payable or to become payable to any director current or officer former officer, director, employee, consultant or individual service provider of the Company or any of its Subsidiaries with annual cash compensation in excess of $100,000, except as required by the existing terms of an Employment Benefit Program or (B) pay or provide to any of such Acquired Company except for increases provided for Persons any material compensation or similar benefit, other than, in any Contracts or plans in effect on the case of this clause (B), (x) the continued payment of base compensation and other existing benefits disclosed to Parent prior to the date hereof or contained in the Financial Statements or otherwise in the ordinary course of business consistent with past practices, (y) spot bonuses paid prior to the Effective Time or (z) any bonus or other payment paid in connection with the transactions contemplated by this Agreement which are treated as Company Transaction Expenses;
7.2.2. adopt (x) hire or amend any Employee Plan that increases the benefits to any employee, officer or director of an Acquired Company terminate (other than for “cause”) any officer, director, employee or individual service provider with annual cash compensation in excess of $125,000;
(xi) sell, lease, transfer, assign, pledge or otherwise dispose of or encumber any material properties or material assets of the Company or any of its Subsidiaries, except for Permitted Liens, assignments and/or transfers of assets between the Company and wholly-owned Subsidiaries and sales in the ordinary course of business or as may be required by applicable lawbusiness;
7.2.3. (xii) agree to enter into any collective bargaining agreementmerger, consolidation, recapitalization or other business combination or make any other acquisition of any business;
7.2.4. issue(xiii) implement any employee layoffs that would require notice under the WARN Act;
(xiv) settle or compromise, sell or otherwise dispose agree to settle or compromise, any material Proceeding (whether or not commenced prior to the date of this Agreement), other than settlements or compromises of litigation where the settlement payment is paid prior to the Effective Time or is paid by any capital stock Person other than the Company and its Subsidiaries; provided that the foregoing shall not permit the Company or other Equity Interests or grant any options or other rights to purchase or obtain (including upon conversion, exchange or exercise of other securities) any of its capital stock Subsidiaries to settle any litigation, claim or other Equity Interests Proceeding that would impose material restrictions or changes on the business or operations of the Company or any of its Subsidiaries;
(xv) other than any issuance of Shares upon exercise of any Option capital expenditures paid in effect on full prior to the date hereof and hereof, commit to make any capital expenditure in excess of $100,000, except in accordance with the terms thereof)Company’s annual budget;
7.2.5. incur(xvi) amend any Tax Return, assume settle or guarantee compromise any Indebtedness, other than under credit facilities in existence on the date hereof in the ordinary course of business and other than any accrual of interest under any notes in existence on the date hereof, it being understood that any Indebtedness incurred under this Section 7.2.5 shall constitute Refinancing Indebtedness;
7.2.6. voluntarily subject any of the material properties or assets of the Acquired Companies to any Encumbrances (other than Permitted Encumbrances);
7.2.7. make any changes in its methods of accounting or accounting practices or policies (including Proceeding with respect to reserves) other than those required by GAAP;
7.2.8. any material Tax liability, make, change, or revoke any material tax election except as otherwise consistent with the past practice of the Company, make or change any material Tax accounting method except as otherwise consistent with the past practice of the Company, consent to or request any extension or waiver of the statute of limitation period applicable to any Tax claim, waive any claim to a Tax refund, enter into any commitment for capital expenditures (including entering into closing agreement relating to Taxes or request any capital lease) in excess of $250,000 in the aggregateTax ruling;
7.2.9. declare, set aside or pay any dividend or make any other distribution to any Stockholder (xvii) other than the payment of cash dividends;
7.2.10. amend its Organizational Documents Change of Control Payments which are treated as Company Transaction Expenses or effect any stock splitthe acceleration of vesting for the incentive units, stock combinationestablish, stock dividend or similar action;
7.2.11. acquire, sell, lease, license or otherwise dispose of any business or material investment or any material assets, except in the ordinary course of business consistent with past practice or as are required under Contracts in effect on the date hereof;
7.2.12. merge, combine or consolidate with any Person;
7.2.13. make, change or revoke any material Tax election or Tax accounting method; file any income or other material Tax Return; file any material amendment to any material Tax Return; request, or enter into, adopt, amend, terminate, or take any rulingaction to accelerate the vesting, settlement payment or other compromise with any Taxing Authorityfunding of compensation or benefits under an Employee Benefit Program; or agree to the extension of the period of time within which any Tax may be assessed; provided, however, in the case of any income or other material Tax Return timely provided to Parent for its review and consent, the Company may or
(or may cause an Acquired Company, as applicable, toxviii) file any income or other material Tax Return without Parent’s consent if such consent has been unreasonably delayed and if necessary to file any such Tax Return by its due date after taking advantage of any automatic extensions;
7.2.14. enter into any settlement executory agreement, commitment or compromise of any Action if such settlement undertaking, whether in writing or compromise would involve the payment by an Acquired Company of more than $100,000 or the imposition of any material non-monetary restrictions upon any Acquired Company;
7.2.15. adopt a plan of complete or partial liquidationotherwise, dissolution, restructuring or recapitalization;
7.2.16. pay, loan or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, any officer, director or Affiliate of any Acquired Company, except for in the ordinary course of business and consistent with past practice;
7.2.17. grant or otherwise create or consent to the creation of any easement, covenant, restriction, assessment or charge materially affecting any Leased Real Property or any part thereof; commit any waste or nuisance on any Leased Real Property; or make any material changes in the construction or condition of any Leased Real Property;
7.2.18. terminate or allow to be terminated any insurance policy in effect as of the date hereof, or fail to maintain, with financially responsible insurance companies, insurance on tangible assets of any Acquired Company and on the Business in such amounts and against such risks and losses as are consistent with past practice;
7.2.19. enter into any Contract that if entered into prior to the date hereof would be a Material Company Contract or Customer Contracts or otherwise amend or modify any Material Company Contract or Permit that is material to the Business or waive any material term or condition thereof or grant any consents thereunder;
7.2.20. make any material change to any of the cash management practices of the Business, including but not limited to, discontinue the payment of its accounts payable that are payable in the ordinary course of business or materially deviate from or materially alter any of its practices, policies or procedures in paying accounts payable or collecting accounts receivable; or
7.2.21. agree or commit to do any of the things referred to elsewhere in Section 7.2.1 through 7.2.20 aboveactivities prohibited by the foregoing provisions.
Appears in 1 contract
Samples: Merger Agreement (Resmed Inc)
Conduct of Business Prior to Closing. Prior to From the earlier of date hereof until the Closing or the termination of this Agreement in accordance with Article 8Closing, except as otherwise expressly permitted provided in this Agreement or required by this Agreement, as otherwise consented to in writing by Parent the Purchaser (such which consent shall not to be unreasonably withheld, conditioned or delayed, and provided that failure by Purchaser to respond to any request for consent within five (5) or as set forth on Schedule 7.2Business Days of receiving such request shall be deemed to constitute consent), the Company Sellers shall, and shall cause the other Acquired Companies Company and the Subsidiaries to, (x) conduct their the business in all material respects in the ordinary course of business, consistent with past practices and use their commercially reasonable efforts to (i) preserve intact the Acquired Company’s current business organization, (ii) keep available the services of current officers, employees and agents of the Acquired Companies Company and (iii) maintain in good state relations and good will with customers, suppliers, licensors, licensees, distributors, landlords, creditors, employees, agents and others having business relationships with the Acquired Companies. Without limiting the generality of the foregoing, prior to the earlier of the Closing or the termination of this Agreement in accordance with Article 8, without the prior consent of Parent (not to be unreasonably withheld, conditioned or delayed), and except as otherwise contemplated by this Agreement or as set forth on Schedule 7.2, the Company shall not, and shall not cause or permit any other Acquired Company to:
7.2.1. increase the compensation (including bonuses) payable on or after the date hereof to any director or officer of such Acquired Company except for increases provided for in any Contracts or plans in effect on the date hereof or Subsidiaries in the ordinary course of business consistent with past practicespractice; and (y) use reasonable best efforts to maintain and preserve intact the current organization, business and franchise of the Company and the Subsidiaries and to preserve the rights, franchises, Intellectual Property Rights, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having business relationships with the Company or the Subsidiaries. Without limiting the foregoing, from the date hereof until the Closing Date, the Sellers and the Company shall not, and shall not permit any Subsidiary to do the following except as set forth on Schedule 6.1:
(a) authorize any amendments to the certificate or articles of formation or operating agreement of the Company or any Subsidiary;
7.2.2. adopt (b) issue or sell Membership Interests or any equity interests in any Subsidiary;
(c) acquire an equity interest in, or portion of the assets of, any business or any corporation, partnership or other business organization or division, in an amount valued in excess of $250,000;
(d) incur any debt or issue any debt securities in an aggregate amount in excess of $250,000;
(e) Other than as required pursuant to the terms of this Agreement, and other than as may be required by applicable Law or by any applicable Contract (including the terms of any Company Plan) existing on the date hereof, (i) enter into or materially amend any Employee Plan employment or severance agreement with any employees with an annual base salary of at least $100,000 or (ii) enter into or materially amend any pension, retirement, health, life or disability insurance or other employee benefit plan, agreement, trust or other arrangement for the benefit of any employees with an annual base salary of at least $100,000;
(f) sell, transfer or otherwise dispose of any material assets;
(g) make any loan to or enter into any other transaction with any of its managers, directors, officers or Key Employees;
(h) except as may be required as a result of a change in Law or in GAAP, materially change any of the accounting principles or elections, practices or methods used by it;
(i) enter into any Contract that increases would be material to the benefits to any employeeCompany and the Subsidiaries, officer or director of an Acquired Company taken as a whole, other than in the ordinary course of business or as may be required by applicable law;
7.2.3. enter into any collective bargaining agreement;
7.2.4. issue, sell or otherwise dispose of any capital stock or other Equity Interests or grant any options or other rights to purchase or obtain (including upon conversion, exchange or exercise of other securities) any of its capital stock or other Equity Interests (other than any issuance of Shares upon exercise of any Option in effect on the date hereof and in accordance with the terms thereof);
7.2.5. incur, assume or guarantee any Indebtedness, other than under credit facilities in existence on the date hereof in the ordinary course of business and other than any accrual of interest under any notes in existence on the date hereof, it being understood that any Indebtedness incurred under this Section 7.2.5 shall constitute Refinancing Indebtedness;
7.2.6. voluntarily subject any of the material properties or assets of the Acquired Companies to any Encumbrances (other than Permitted Encumbrances);
7.2.7. make any changes in its methods of accounting or accounting practices or policies (including with respect to reserves) other than those required by GAAP;
7.2.8. enter into any commitment for capital expenditures (business; including entering into any capital lease) in excess of $250,000 in the aggregate;
7.2.9. declareContract that, set aside or pay any dividend or make any other distribution to any Stockholder other than the payment of cash dividends;
7.2.10. amend its Organizational Documents or effect any stock split, stock combination, stock dividend or similar action;
7.2.11. acquire, sell, lease, license or otherwise dispose of any business or material investment or any material assets, except in the ordinary course of business consistent with past practice or as are required under Contracts had it been in effect on the date hereof, would have been required to be disclosed in the Disclosure Schedule pursuant to Section 3.14;
(j) terminate or amend, in any manner materially adverse to the Company, any Material Contract;
7.2.12. merge, combine or consolidate with any Person;
7.2.13. make, change or revoke any material Tax election or Tax accounting method; file any income or other material Tax Return; file any material amendment to any material Tax Return; request, or enter into, any ruling, settlement or other compromise with any Taxing Authority; or agree to the extension of the period of time within which any Tax may be assessed; provided, however, in the case of any income or other material Tax Return timely provided to Parent for its review and consent, the Company may (or may cause an Acquired Company, as applicable, tok) file any income or other material Tax Return without Parent’s consent if such consent has been unreasonably delayed and if necessary to file any such Tax Return by its due date after taking advantage of any automatic extensions;
7.2.14. enter into any settlement Contract that (i) restrains the ability of the Company or compromise any Subsidiary to compete with or conduct any business, (ii) imposes exclusive dealing obligations, (iii) contains “most favored nations” terms, or (iv) contains a non-solicitation, non-hire clause against the Company or any Subsidiary;
(l) make any distributions to members or payments to Affiliates, except as required under the terms of any Action if such settlement instrument or compromise would involve agreement existing on the payment by an Acquired Company of more than date hereof;
(m) authorize any new capital expenditure or expenditures that individually exceed $100,000 or in the imposition aggregate are in excess of $250,000;
(n) cancel, terminate or allow to lapse any material non-monetary restrictions upon insurance policies or cause any Acquired Companyof the coverage thereby to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies providing, to the extent reasonably available, coverage equal to or greater than the coverage under the canceled, terminated or lapsed policies for substantially similar premiums are in full force and effect;
7.2.15. adopt (o) voluntarily incur or assume any Liability that would reasonably be expected to have a plan of complete or partial liquidation, dissolution, restructuring or recapitalizationMaterial Adverse Effect;
7.2.16. pay(p) waive any rights of material value or take any actions with respect to collection practices that would result in any material losses or material adverse changes in collections, loan whether or advance any amount to, or sell, transfer or lease any of its assets to, or enter into any agreement or arrangement with, any officer, director or Affiliate of any Acquired Company, except for not in the ordinary course of business and consistent with past practicebusiness;
7.2.17. grant (q) license, sell, transfer or otherwise create or consent dispose of the rights to the creation of any easement, covenant, restriction, assessment or charge materially affecting any Leased Real Property or any part thereof; commit any waste or nuisance on any Leased Real Property; or make use any material changes Owned Intellectual Property Rights or disclose trade secrets to a third party other than pursuant to a confidentiality agreement; or
(r) take or agree in the construction or condition of any Leased Real Property;
7.2.18. terminate or allow to be terminated any insurance policy in effect as of the date hereof, or fail to maintain, with financially responsible insurance companies, insurance on tangible assets of any Acquired Company and on the Business in such amounts and against such risks and losses as are consistent with past practice;
7.2.19. enter into any Contract that if entered into prior to the date hereof would be a Material Company Contract or Customer Contracts writing or otherwise amend or modify any Material Company Contract or Permit that is material to the Business or waive any material term or condition thereof or grant any consents thereunder;
7.2.20. make any material change to take any of the cash management practices of the Business, including but not limited to, discontinue the payment of its accounts payable that are payable in the ordinary course of business or materially deviate from or materially alter any of its practices, policies or procedures in paying accounts payable or collecting accounts receivable; or
7.2.21. agree or commit to do any of the things referred to elsewhere actions described in Section 7.2.1 6.1(a) through 7.2.20 aboveSection 6.1(q).
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (Ritchie Bros Auctioneers Inc)