Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter or otherwise consented to or approved in writing by Parent, during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half of the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereof: (a) The Company shall, and shall cause each of its Subsidiaries to, conduct their respective operations only according to their ordinary and usual course of business consistent with past practice and use their reasonable best efforts to preserve intact their respective business organization, keep available the services of their officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners and others having significant business relationships with them; and (b) The Company shall not, and shall cause each of its Subsidiaries not to: (i) amend its Certificate of Incorporation or its By-Laws (or comparable governing documents); (ii) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe to, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock or any other securities, or make any other changes in its capital structure; (iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility; (iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stock; (v) enter into any contract or commitment with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate of those provided for in the Plan; (vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets in the ordinary course of business and consistent with past practice, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million); (vii) except in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000; (viii) except in the ordinary course of business consistent with past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person or, make any loan or other extension of credit; (ix) agree to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000; (x) make or rescind any material tax election or settle or compromise any material tax liability; (xi) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its material Subsidiaries (other than the Merger); (xii) except in the ordinary course of business consistent with past practice, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filings; (xiii) except in the ordinary course of business consistent with past practice, enter into any agreement, understanding or commitment that restrains, limits or impedes the Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities; (xiv) take any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions to not be satisfied; (xv) in the case of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stock; or (xvi) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt.
Appears in 2 contracts
Samples: Merger Agreement (Wang Laboratories Inc), Merger Agreement (Wang Laboratories Inc)
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except Except as permitted, required or specifically contemplated by, by this Agreement or otherwise described in, this Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter or otherwise consented to or approved in writing by Parent, during until the period commencing on earlier of (i) the date hereof until such time as nominees of Parent shall comprise more than half of the members upon which Parent’s designees constitute a majority of the Board of Directors of the Company (or this Agreement shall have been terminated Parent has failed to designate at least 4 individuals pursuant to Section 9.1 hereof1.3), (ii) the termination of this Agreement, or (iii) the Effective Time:
(a) The the Company shall, shall and shall cause each Subsidiary of the Company to conduct its Subsidiaries to, conduct their respective operations only according to their its ordinary and usual course of business consistent with past practice and shall use their all reasonable best efforts to preserve intact their respective current business organizationoperations, keep available the services of their officers and employees employees, and maintain satisfactory relationships with licensorslessors, lessees, suppliers, distributorscustomers, clients, joint venture partners and others having significant business relationships with them; and
(b) The without limiting the generality of the foregoing, neither the Company shall not, and shall cause each nor any Subsidiary of its Subsidiaries not tothe Company shall:
(i) amend its Certificate of Incorporation or its By-Laws (or comparable governing organizational documents);
(ii) except for grants of Company Stock Options to new hires in the ordinary course of business and consistent with past practice (A) upon provided that in the exercise of Optionsaggregate, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivettimay not grant options in the aggregate amount exceeding 50,000), issue or sell, or authorize to issue the issuance or sellsale of, any shares of its capital stock or any other equity securities, or issue or sell, or authorize to issue the issuance or sellsale of, any securities convertible into, into or options, warrants or rights to purchase or subscribe to, or enter into or create any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock or any other equity securities, or make any other changes in its capital structure, except for the issuance and sale of Shares upon the exercise of Company Stock Options or Company Warrants which are outstanding on the date hereof and other than pursuant to the Company ESPP;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facilityentity;
(iv) except in the case for payments of dividends by a Subsidiary of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stockstock or its other securities;
(v) enter into any contract or commitment with respect which (i) if entered into prior to capital expenditures with the date of this Agreement, would be a value in excess ofMaterial Company Contract, or requiring expenditures (ii) involves payment by the Company and its Subsidiaries in excess of, of $10 million, individually, 150,000 or enter into contracts or commitments with respect to capital expenditures receipts by the Company and its Subsidiaries in excess of $250,000 in any consecutive twelve month period, or, in cases where the aggregate Company or a Subsidiary of those provided the Company is the party responsible for in the Plansuch payment, which is not terminable upon thirty days notice;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets in the ordinary course of business and consistent with past practice, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements as Employee Plans in effect on the date of this Agreement or applicable lawAgreement, rule or regulationgrant any options to purchase Shares, increase materially the compensation or fringe benefits of any of its directors, officers or employees or employees, grant any severance or termination pay or not currently required to be paid under existing severance plans; enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company employee;
(vii) except as specifically set forth herein or any of its Subsidiariesas required in order to comply with applicable Law, or (A) establish, adoptenter into, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, adopt or amend or terminate any collective bargainingEmployee Plan or Compensatory Agreement, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance (B) change any actuarial or other planassumption used to calculate funding obligations with respect to any Employee Plan, agreement, trust, fund, policy (C) change the manner in which contributions to any Employee Plan are made or arrangement for the benefit of formula by which such contributions are determined or make any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall material determinations not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except in the ordinary course of business consistent with past practicepractice with respect to any Employee Plan, or (D) take any action to accelerate any rights or benefits under any collective bargaining agreement, Employee Plan or Compensatory Plan;
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lienLien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for than entering into contracts with customers in the obligations ordinary course of any Person or, make any loan or other extension of creditbusiness consistent with past practice;
(ix) agree sell, assign, transfer, license or modify or amend any rights to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregateCompany Intellectual Property, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its material Subsidiaries (other than the Merger);
(xii) except in the ordinary course of business consistent with past practice;
(x) agree to the settlement of any material claim or Litigation;
(xi) except pursuant to Section 5.14(b), make, change or rescind any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, file any material amended Tax Return, enter into any closing agreement, settle any material Tax claim or assessment, surrender any right to claim a Tax refund, offset or other reduction in Tax liability, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment or take or omit to take any other action, if any such action or omission would have the effect of increasing the Tax liability of the Company or its Subsidiaries or file any income Tax Return or material non-income Tax Return;
(xii) except as required by applicable Law or GAAP, make any change in its accounting principles, practices or methods;
(xiii) (A) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than in respect of indebtedness owing by the Company to any Subsidiary of the Company or in respect of indebtedness owing by any Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any Subsidiary of the Company;
(A) accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, other than as described in Section 3.14(e) of the Company Disclosure Schedule, or, (B) except at Parent’s request in accordance with Section 5.3, accelerate the payment, right to payment or vesting, redeem or exercise a right to redeem, any Company Warrant;
(xv) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, any liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filingsordinary course of business and consistent with past practice;
(xiiixvi) delay or postpone the payment of accounts payable or other liabilities, other than in the ordinary course of business consistent with past practice;
(xvii) modify, amend or terminate any contract which is material to its business or waive any of its material rights or claims, except in the ordinary course of business consistent with past practice; provided that the waiver of any “standstill provision” shall be deemed, for purposes of this Agreement, a waiver of a material right not in the ordinary course of business;
(xviii) make any single capital expenditure or commitment in excess of $150,000 or make aggregate capital expenditures or commitments in excess of $250,000;
(xix) merge or consolidate with another Person or purchase a substantial portion of the assets of any Person;
(xx) enter into any agreementjoint venture, understanding partnership or commitment that restrains, limits or impedes the Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activitiesother similar arrangement;
(xivxxi) subject to Section 5.5, take any action to exempt or make any Person (other than Parent) not subject to the provisions of Section 203 of the DGCL or any other potentially applicable anti-takeover or similar statute or regulation;
(xxii) subject to Section 5.5, take any action (including encouraging any other Person to take such action), engage in any transaction or enter into any agreement which would reasonably be likely to cause (A) any of the representations or warranties of the Company in this Agreement to be untrue at, or as of any time prior to the earlier of, (i) the date upon which Parent’s designees constitute a majority of the Board of Directors (or Parent has failed to designate at least 4 individuals pursuant to Section 1.3), or (ii) the Effective Time; (B) any of the Tender Offer Conditions to not be satisfied; (C) any of the conditions set forth in Article VI to not be satisfied; (D) a Material Adverse Effect on the Company or (E) any impairment of the ability of the Company, Parent, Sub or the holders of Shares to consummate the Offer or the Merger in accordance with the terms hereof or materially delay such consummation;
(xvxxiii) in the case of sell or release, or agree to develop, sell or release, any product that the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments does not make generally available to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stockcustomers; or
(xvixxiv) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt.
Appears in 2 contracts
Samples: Merger Agreement (Mercator Software Inc), Merger Agreement (Ascential Software Corp)
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except as permitted, expressly permitted or required or specifically contemplated by, or otherwise described in, by this Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter or otherwise consented to or approved in writing by Parent, during the period commencing on the date hereof until such time as nominees and ending at the earlier of Parent shall comprise more than half (x) the Closing Date and (y) termination of the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereof8.1:
(a) The the Company shall, and shall cause each of its Significant Subsidiaries to, shall conduct their respective operations in all material respects only according to their in the ordinary and usual course of business consistent with past practice and and, to the extent consistent therewith, use their commercially reasonable best efforts to preserve intact their respective business organization, keep available the services of their officers and employees current senior management as a group and maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners and others any Person having significant business relationships with themthe Company or any of such Significant Subsidiaries; and
(b) The neither the Company shall not, and shall cause each nor any of its Significant Subsidiaries shall effect any of the following without the prior written consent of the Purchasers (such consent not to:to be unreasonably withheld, conditioned or delayed):
(i) amend make any change in or amendment to its Certificate certificate of Incorporation incorporation or its Byby-Laws laws (or comparable governing documents), except for any amendment (including, without limitation, the Charter Amendment) required in Stock Purchase Agreement connection with the performance by Company or a Significant Subsidiary of its obligations under this Agreement;
(ii) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securitiesownership interests, or issue or sell, or authorize to issue or sell, any securities convertible intointo or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or contract Contract with respect to the issuance or sale of, any shares of its capital stock or any other securities, or make ownership interests except for the issuance by the Company of Option Exercise Shares pursuant to the terms of any other changes in its capital structureExercise Options;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stockstock or its other securities except for the acquisition of Options from holders of Options in full or partial payment of the exercise price payable by such holder upon exercise of Options and other than in accordance with the terms of this Agreement (including, without limitation, the Reclassification);
(iv) except as contemplated by Section 6.13, acquire, make any dividend or distribution to, make any investment in, or make any capital contributions to, any Person, other than investments or capital contributions by the Company to any wholly-owned subsidiary of the Company or by any wholly-owned subsidiary of the Company to another wholly-owned subsidiary of the Company;
(v) transfer, sell, lease, pledge or otherwise dispose of any of its properties or assets that are material to its business;
(vi) amend in any material respect or terminate any Material Contract or enter into a Contract which, had it been entered into prior to the date hereof, would have been a Material Contract;
(vii) (x) incur any indebtedness, other than short-term indebtedness or letters of credit incurred in the ordinary course of business or borrowings under existing credit facilities described in the Commission Filings or set forth in Section 3.14 of the Company Disclosure Letter or (y) make any loans or advances to any other Person, other than routine advances to employees consistent with past practice;
(viii) grant or agree to grant to any officer, employee, director or consultant of the Company or any of its Significant Subsidiaries any increase in wages or bonus, severance, profit sharing, retirement, deferred compensation, insurance or other compensation or benefits, or establish any new compensation or benefit plans or arrangements, or amend or agree to amend any existing Employee Benefit Plans, except (w) as may be required under applicable Law, (x) pursuant to the Employee Benefit Plans or collective bargaining agreements of the Company or any of its Subsidiaries in effect on the date hereof, (y) in the ordinary Stock Purchase Agreement course of business and consistent with past practice or (z) pursuant to employment, retention, change-of-control or similar type agreements existing as of the date hereof that are disclosed in the Company Disclosure Letter;
(ix) make any material Tax election not required by law or settle or compromise any material Tax liability other than in the ordinary course of business;
(x) other than in the ordinary course of business, (A) waive any rights of substantial value or (B) cancel or forgive any material indebtedness for borrowed money owed to the Company or any of its Significant Subsidiaries, other than indebtedness for borrowed money of the Company to a wholly-owned Subsidiary of the Company or indebtedness for borrowed money of a wholly-owned Subsidiary of the Company to the Company to another wholly-owned Subsidiary of the Company;
(xi) except as may be required by the Commission or any Governmental Entity or under GAAP, make any material change in its methods, principles and practices of accounting, including tax accounting policies and procedures;
(xii) enter into any contract or commitment with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and its Significant Subsidiaries in excess of, $10 million250,000, individually, or enter into contracts or commitments with respect to capital expenditures with a value in excess in the aggregate of those provided for in the Plan;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or requiring expenditures by any other mannerCompany and its Significant Subsidiaries in excess of, any material business or any Person$1,000,000, or otherwise acquire any assets of any Person (in the aggregate, other than (A) the purchase of assets in the ordinary course of business and consistent with past practice, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except in the ordinary course of business consistent accordance with the Plan including without limitation the implementation capital expenditure budgets of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except Company provided in writing to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on Purchasers prior to the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except in the ordinary course of business consistent with past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person or, make any loan or other extension of credit;
(ix) agree to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its material Subsidiaries (other than the Merger);
(xii) except in the ordinary course of business consistent with past practice, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission FilingsAgreement;
(xiii) except in the ordinary course sell, pledge or dispose of business consistent with past practice, enter into any agreement, understanding stock or commitment that restrains, limits or impedes the Company's or other equity interest owned by it to any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;other person; or
(xiv) take authorize any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions to not be satisfied;
(xv) in the case of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to voteof, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company that may be acquired commit or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stock; or
(xvi) agree, in writing or otherwise, agree to take any of of, the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with actions in respect to of which it is restricted by the business and, in any event, shall keep Parent fully informed with respect to the progress provisions of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt6.3.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. (a) The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter or otherwise consented to or approved in writing by Parent, Sellers agree that during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half and ending on the Closing Date or, if earlier, the date of the members termination of this Agreement (the Board of Directors of “Interim Period”), the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereof:
conduct its respective operations (a) The Company shall, and shall cause each of its Subsidiaries to, conduct including their respective operations only according to their working capital and cash management practices) in the ordinary and usual course of business consistent with past practice and to use their commercially reasonable best efforts to preserve intact their respective business organizationorganizations, keep available the services of their officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners clients and others having significant business relationships with them; and.
(b) The In furtherance and not in limitation of Section 5.03(a) hereof, the Sellers agree that during the Interim Period the Company shall notnot effect any of the following without the prior written consent of the Purchaser (such consent not to be unreasonably withheld, and shall cause each of its Subsidiaries not to:conditioned or delayed):
(i) amend or restate its Certificate articles of Incorporation incorporation or its By-Laws (bylaws or comparable governing documents)other equivalent charter documents in any material respect;
(ii) except authorize for issuance, issue, sell or deliver (A) upon any capital stock of, or other equity or voting interest in, the exercise Company or any of Options, Common Stock Purchase Warrants its Subsidiaries or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe toexchangeable for, or enter into evidencing the right to subscribe for or acquire any arrangement (1) shares of capital stock of, or contract with respect other equity or voting interest in, the Company, (2) securities convertible into, exchangeable for, or evidencing the right to the issuance subscribe for or sale ofacquire, any shares of its the capital stock of, or other equity or voting interest in, the Company including rights, warrants or options, or (3) phantom stock or similar equity‑based payment option;
(iii) declare, pay or set aside any dividend or make any non-cash distribution with respect to, or split, combine, redeem, reclassify, purchase or otherwise acquire directly, or indirectly, any shares of capital stock of, or other securitiesequity or voting interest in, the Company, or make any other changes change in its the capital structure;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to structure of the extent required to be pledged to the collateral agent under the Credit FacilityCompany;
(iv) except as set forth in Section 5.03(b) of the Seller Disclosure Letter, in furtherance of and as provided in the case Company’s 2021 budget set forth in Section 5.03(b) of the Seller Disclosure Letter or as reflected on the Financial Statements, or as otherwise required by applicable Law, (i) increase in any manner the compensation, bonus, pension, welfare, fringe or other benefits, severance or termination pay of any of the current or former directors, officers, employees or consultants of the Company's wholly, (ii) pay any bonus to any of the current or former directors, officers, employees or consultants of the Company, (iii) adopt, enter into, establish, amend, modify or terminate any Company Plan or any employment, consulting, bonus or other incentive compensation, health or other welfare, pension, retirement, severance, deferred compensation or other compensation or benefit plan with, for or in respect of any shareholder, director, officer, other employee or consultant that would constitute a Company Plan had it been in effect as of the date of this Agreement, (iv) promote any employee who is an officer to a position more senior than such employee’s position as of the date of this Agreement, or promote a non-owned Subsidiariesofficer employee to an officer position, (v) grant any new awards under any Company Plan, (vi) amend or modify any outstanding award under any Company Plan, (vii) take any action to amend, waive or accelerate the vesting criteria or vesting requirements of payment of any compensation or benefit under any Company Plan or remove any existing restrictions in any Company Plans or awards made thereunder, (viii) take any action to accelerate the payment, or to fund or in any other way secure the payment, of compensation or benefits under any Company Plan, to the extent not already provided in any such Company Plan, (ix) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or applicable Laws, (x) forgive any loans, or issue any loans (other than routine travel advances issued in the ordinary course of business), to directors, officers, contractors or employees of the Company, (xi) enter into, amend or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization, or (xii) plan, announce, implement or effect any reduction in force, lay-off, early retirement program, severance program or other program or effort concerning the termination of employment of employees of the Company (other than routine employee terminations for cause in the ordinary course of business consistent with past practice and in compliance with applicable Law;
(v) except in furtherance of and as provided in the Company’s 2021 budget set forth in Section 5.03(b) of the Seller Disclosure Letter or as reflected on the Financial Statements, hire any employee or engage any independent contractor (who is a natural person) other than as disclosed in the Company’s hiring plan as set forth in Section 5.03(b) of the Seller Disclosure Letter, or terminate the employment or engagement, other than for cause, of any employee or independent contractor; provided, however, that the compensation and benefits granted to any such newly hired employee or newly engaged independent contractor shall be consistent with, and be no more favorable in the aggregate than the compensation and benefits (excluding equity awards) provided as of the date of this Agreement to the Company’s similarly situated employees or independent contractors;
(vi) communicate with the directors, officers, employees or consultants of the Company regarding the compensation, benefits or other treatment they will receive in connection with the transactions contemplated hereby, unless any such communications are consistent with prior directives or documentation provided to the Company by the Parent (in which case, the Company shall provide the Parent with prior notice of and the opportunity to review and comment upon any such communications);
(vii) enter into any Contract which, if entered into prior to the date hereof would be required to be set forth in Section 3.18 of the Seller Disclosure Schedule or commit or agree (whether or not such Contract, commitment or agreement is legally binding) to enter into such Contract, or materially amend or terminate any Material Contract or any Real Property Lease, in each case outside of the ordinary course of business consistent with past practice;
(viii) permit any of its properties or assets to be subject to any Lien not already disclosed in Section 3.18 of the Seller Disclosure Letter (other than Permitted Liens);
(A) sell, assign, transfer, lease, license, sublicense, covenant not to assert, abandon, permit to lapse, cancel or otherwise dispose of (1) any tangible assets or properties except for (a) sales of inventory in the ordinary course of business consistent with past practice and (b) non-exclusive leases or licenses entered into in the ordinary course of business consistent with past practice or (2) any of its material Owned IP (other than non-exclusive licenses of Owned IP granted to customers or service providers in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution mortgage, pledge or payment with respect tosubject any of the foregoing to any additional Lien, except for Permitted Liens; or split, combine, redeem (B) disclose any material Trade Secrets to any Person (except pursuant to sufficiently protective non-disclosure agreements); or reclassify, or purchase or otherwise acquire, (C) subject any shares of its capital stockProprietary Software to Copyleft Terms;
(vx) enter into acquire any contract business, line of business or commitment with respect to capital expenditures with a value in excess ofPerson by merger or consolidation, purchase of substantial assets or requiring expenditures by the Company and its Subsidiaries in excess of, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate of those provided for in the Plan;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets ofinterests, or by any other manner, in a single transaction or a series of related transactions, or enter into any material business Contract, letter of intent or similar arrangement (whether or not enforceable) with respect to the foregoing;
(xi) except in furtherance of and as provided in the Company’s 2021 budget set forth in Section 5.03(b) of the Seller Disclosure Letter or as reflected on the Financial Statements, make any Person, capital expenditure or commitment therefor or enter into any operating lease or otherwise acquire any assets of any Person or properties (other than (A) the purchase of assets in the ordinary course of business and consistent with past practice, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except inventory in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay practice) or enter into any employmentContract, consulting letter of intent or severance agreement similar arrangement (whether or arrangement not enforceable) with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost respect to the Company of all such agreements shall not exceed $1,000,000foregoing;
(viiixii) form any Subsidiary;
(xiii) write off as uncollectible any notes or accounts receivable, except write‑offs in the ordinary course of business consistent with past practice;
(xiv) except as required by GAAP, transfermake any material change in any method of accounting practice;
(xv) make any material Tax election or settle and/or compromise any Tax liability; prepare and file any Returns in a manner which is inconsistent with the past practices of the Company, leaseas applicable, licensewith respect to the treatment of items on such Returns; incur any material liability for Taxes other than in the ordinary course of business, guaranteeenter into any closing agreement, sellextend the statute of limitations period for the assessment or collection of any material amount of Tax, mortgageor file an amended Return or a claim for refund of Taxes with respect to the income, pledgeoperations or property of the Company;
(xvi) pay, dispose ofdischarge, encumber settle or subject satisfy any actions, Liabilities, including with respect to any lienof the matters set forth in Section 3.12 of the Seller Disclosure Letter;
(xvii) incur, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of modify any Person orIndebtedness, make any loan or other extension of credit;
(ix) agree except Indebtedness incurred pursuant to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described existing credit agreements disclosed in Section 6.3(b)(ix) 3.18 of the Company Seller Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement AmountsLetter, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its material Subsidiaries (other than the Merger);
(xii) except in the ordinary course of business consistent with past practicepractice and which such incurrences of Indebtedness, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained individually and in the Commission Filingsaggregate, does not have and would not reasonably be expected to be, individually or in the aggregate, material to the Company;
(xiiixviii) except in the ordinary course of business consistent with past practicemake any loans, enter into any agreement, understanding advances or commitment that restrains, limits or impedes the Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited capital contributions to, geographic limitations on the Company's or investments in, any of its Subsidiaries' activities;
(xiv) take any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions to not be satisfied;
(xv) in the case of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stockother Person; or
(xvixix) agreeenter into any Contract or commit or agree (whether or not such Contract, in writing commitment or otherwise, agreement is legally binding) to take do any of the foregoing actions. The foregoing.
(c) During the Interim Period, the Sellers shall keep, or cause the Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues keep, all insurance policies currently maintained with respect to the business andCompany and its respective assets and properties, or suitable replacements or renewals, in any eventthe Sellers’ Representatives sole discretion, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receiptfull force and effect.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Agreement or Schedule 6.3 of the Company's Disclosure Letter 5.2 or otherwise consented to or approved in writing by ParentEMKT (which consent shall not be unreasonably withheld, delayed or conditioned), during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half of and ending on the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereofClosing Date:
(a) The Company shall, and shall cause each of its Subsidiaries to, will conduct their respective operations only according to their ordinary and usual course of business consistent with past practice and will use their reasonable best efforts to preserve intact their respective business organization, keep available the services of their officers and employees and maintain satisfactory relationships with licensorslicensers, suppliers, distributors, clients, joint venture partners clients and others having significant business relationships with them; and;
(b) The Neither the Company shall not, and shall cause each nor any of its Subsidiaries not to:
shall (i) amend make any change in or amendment to its Certificate Articles of Incorporation or its By-Laws (or comparable governing documents);
; (ii) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, sell any shares of its capital stock (other than in connection with the exercise of Company Options outstanding on the date hereof) or any of its other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe to, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock or any of its other securities, or make any other changes in its capital structure;
; (iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside make any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stock;
; (viv) enter into any contract or commitment with respect to capital expenditures with commitment, except for contracts in the ordinary course of business, including without limitation, any acquisition of a value in excess ofmaterial amount of assets or securities, any disposition of a material amount of assets or securities or release or relinquish any material contract rights; (v) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently, or requiring expenditures by otherwise) for the Company and its Subsidiaries in excess of, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate obligations of those provided for in the Plan;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets a Subsidiary in the ordinary course of business and consistent with past practice; (vi) incur, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except assume or prepay any indebtedness or other material liabilities other than in the ordinary course of business and consistent with past practices, except that the Plan including without limitation Company may prepay its legal fees in connection with the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except Transactions to the extent required under benefit plansthey do not exceed the amount set forth in Section 9.1(a); (vii) make any loans, agreementsadvances or capital contributions to, collective bargaining agreements or their arrangements as investments in, any other Person, other than to Subsidiaries; (viii) authorize capital expenditures in effect on excess of the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of amount currently budgeted therefor; (ix) permit any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of insurance policy naming the Company or any Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of its Subsidiariesbusiness; (x) amend any employee or nonemployee benefit plan or program, employment agreement, license agreement or retirement agreement, or establish, adopt, enter into orpay any bonus or contingent compensation, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except each case in the ordinary course of business consistent with past practicepractice prior to the date of this Agreement; (xi) agree, transferin writing or otherwise, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber to take any of the foregoing actions; or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person or, make any loan or other extension of credit;
(ixxii) agree to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000litigation;
(xc) make or rescind any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidationThe Company shall not, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or and shall not permit any of its material Subsidiaries to (other than the Merger);
(xii) except in the ordinary course of business consistent with past practice, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filings;
(xiii) except in the ordinary course of business consistent with past practice, enter into any agreement, understanding or commitment that restrains, limits or impedes the Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xivi) take any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions representations or warranties set forth in Article III to not be satisfied;
untrue as of the Closing Date, or (xvii) in the case purchase or acquire, or offer to purchase or acquire, any shares of capital stock of the Company only, take and the Company shall not sell or pledge or agree to sell or pledge any action including, without limitation, stock owned by it in any of the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to voteSubsidiaries, or otherwise allow any Subsidiary to exercise pledge or agree to sell or pledge any stock owned by it in any other Subsidiary.
(d) The Company will use its commercially reasonable best efforts to deliver to EMKT prior to the rights and receive the benefits of Closing a stockholder with respect to, securities consolidated balance sheet as of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities end of the Company fiscal year ended July 31, 1999 and the related consolidated statements of operations, stockholders' equity and cash flows for the fiscal year then ended, prepared in accordance with GAAP and on a basis not available to Parent or Sub in the event consistent with that Parent or Sub were to acquire any shares of its capital stock; or
(xvi) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees statements delivered pursuant to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt3.5.
Appears in 1 contract
Samples: Stock Purchase and Contribution Agreement (Emarketplace Inc)
Conduct of the Business of the Company Pending the Closing Date. (a) The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter Agreement or otherwise consented to or approved in writing by ParentEMKT, during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half of and ending on the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereofClosing Date:
(ai) The Company shall, and shall cause each of its Subsidiaries to, will conduct their respective operations only according to their ordinary and usual course of business consistent with past practice and will use their commercially reasonable best efforts to preserve intact their respective business organization, keep available the services of their officers and employees and maintain satisfactory relationships with licensorslicensers, suppliers, distributors, clients, joint venture partners clients and others having significant business relationships with them; and
(b) The Company shall not, and shall cause each of its Subsidiaries not to:
(i) amend its Certificate of Incorporation or its By-Laws (or comparable governing documents);
(ii) Neither the Company nor any of its Subsidiaries shall, except as may be necessary to effect the Transactions, (A) upon make any change in or amendment to the exercise of Options, Common Stock Purchase Warrants Company Articles or the Microsoft Warrant, By-Laws of the Company (or comparable governing documents of any Subsidiary); (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, sell any shares of its capital stock (other than in connection with the exercise of Company Options outstanding on the date hereof) or any of its other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe to, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock or any of its other securities, or make any other changes in its capital structure;
; (iiiC) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside make any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stock;
; (vD) enter into any contract or commitment with respect to capital expenditures with commitment, except for contracts in the ordinary course of business, including without limitation, any acquisition of a value in excess ofmaterial amount of assets or securities, any disposition of a material amount of assets or securities or release or relinquish any material contract rights; (E) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently, or requiring expenditures by otherwise) for the Company and its Subsidiaries in excess of, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate obligations of those provided for in the Plan;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets a Subsidiary in the ordinary course of business and consistent with past practice; (F) incur, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except assume or prepay any indebtedness or other material liabilities other than in the ordinary course of business and consistent with past practices; (G) make any loans, advances or capital contributions to, or investments in, any other Person, other than to Subsidiaries and employees in the Plan including without limitation ordinary course of business and not to exceed $25,000 in the implementation aggregate outstanding at any time; (H) authorize capital expenditures in excess of the Company's job structures and broad bonding program and its various variable compensation programs amount currently budgeted therefor; (including its management incentives and sales compensation plans), and except to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of I) permit any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of insurance policy naming the Company or any Subsidiary as a beneficiary or a loss payee to be canceled or terminated other than in the ordinary course of its Subsidiariesbusiness; (J) amend any employee or nonemployee benefit plan or program, employment agreement, license agreement or retirement agreement, or establish, adopt, enter into orpay any bonus or contingent compensation, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except each case in the ordinary course of business consistent with past practicepractice prior to the date of this Agreement; (K) agree, transferin writing or otherwise, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber to take any of the foregoing actions; or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person or, make any loan or other extension of credit;
(ixL) agree to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;litigation.
(xb) make or rescind any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidationThe Company shall not, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or and shall not permit any of its material Subsidiaries to (other than the Merger);
(xii) except in the ordinary course of business consistent with past practice, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filings;
(xiii) except in the ordinary course of business consistent with past practice, enter into any agreement, understanding or commitment that restrains, limits or impedes the Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xivi) take any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions representations or warranties set forth in Article III to be untrue as of the Closing Date, or (ii) purchase or acquire, or offer to purchase or acquire, any shares of capital stock of the Company and the Company shall not be satisfiedsell or pledge or agree to sell or pledge any stock owned by it in any of the Subsidiaries, or allow any Subsidiary to pledge or agree to sell or pledge any stock owned by it in any other Subsidiary;
(xvc) The Company shall use reasonable efforts to operate its business in a manner consistent with prior practice and maintain the case goodwill of its employees and other persons with which it has commercial dealings. In addition, the Company agrees that: (i) effective as of January 1, 2000, there will no increases in salary or other payments, disbursements or distributions in any manner or form to shareholders, directors, officers, or employees (or related parties thereto) of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation affiliated or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to voterelated entities, or otherwise changes in the cash or cash equivalent account of the Company, other than normal and necessary transactions in the ordinary course of business; (ii) revenues and accounts receivable will be maintained on a normal basis and there will no changes in its methods or procedures for billing, collection or recording of customer accounts receivable or reserves for doubtful accounts; (iii) inventories will be maintained on a normal basis, purchases of inventory items will be made in accordance with past practices and no changes will be made in other normal inventory procedures; (iv) property, plant, and equipment will be maintained and serviced in accordance with normal policies, and repairs, maintenance to exercise such plant and equipment will be made as necessary in the rights normal course of business (v) accounts payable and receive the benefits of a stockholder with respect to, securities accrued expenses of the Company that may will be acquired or controlled maintained on a current basis; (vi) all normal and recurring installment payments of bank debt, leases, contractual obligations and other amounts due third parties, if any, will be made by Parent or Sub or permit any stockholder to acquire securities of the Company on as they become due, except to the extent suspended, withheld or terminated by the Company due to a basis bona fide dispute; (vii) the Company shall not available to Parent incur any new blank debt, leases, loans, encumbrances, liens, attachments, contractual obligations or Sub other indebtedness, except those incurred in the event that Parent ordinary course of business; (viii) all federal, state, municipal and other tax returns, reports and declarations required to be filed, and all taxes, interest, penalties, fines or Sub were to acquire any shares of its capital stock; or
(xvi) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues assessments related thereto will be satisfied by with respect to the business and, in any event, shall keep Parent fully informed with respect periods of time prior to the progress closing of the transactions described on Schedule 6.3 of Transaction, except to the extent suspended, withheld or terminated by the Company Disclosure Letter. Each of the parties agree due to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receiptbona fide dispute.
Appears in 1 contract
Samples: Merger Agreement (Emarketplace Inc)
Conduct of the Business of the Company Pending the Closing Date. (a) The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter or otherwise consented to or approved in writing by Parent, that during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half of and ending on the members of the Board of Directors of Expiration Date, the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereof:
(a) The Company shall, and shall cause each of conduct its Subsidiaries to, conduct their respective operations only according to their in the ordinary and usual course of business consistent with past practice and to use their its commercially reasonable best efforts to preserve intact their respective its business organization, keep available the services of their officers and employees its Employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners clients and others having significant business relationships with them; and.
(b) The In furtherance and not in limitation of Section 5.3(a), the Company agrees that during the period commencing on the date hereof and ending on the Expiration Date, the Company shall not, and not effect any of the following except with the prior written consent of Buyer (which shall cause each of its Subsidiaries not to:be unreasonably withheld):
(i) amend or restate any of its Certificate of Incorporation Organizational Documents or its By-Laws (or comparable governing documents)form any Subsidiary;
(ii) except authorize for issuance, issue, sell or deliver (A) upon any share stock of, or other equity or voting interest in the exercise of OptionsCompany, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe toexchangeable for, or enter into evidencing the right to subscribe for or acquire any arrangement (1) shares of capital stock of, or contract with respect other equity or voting interest in the Company, (2) securities convertible into, exchangeable for, or evidencing the right to the issuance subscribe for or sale ofacquire, any shares of its the share capital of, or other equity or voting interest in the Company including rights, warrants or options, or (3) phantom stock or any other securities, or make any other changes in its capital structuresimilar equity based payment option;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend or make any distribution (other than dividends on the Series A Preferred Stock or Series B Preferred Stock whether in accordance with the terms of their respective Certificates of Designation) cash, stock or other distribution or payment property) with respect to, or split, combine, redeem or redeem, reclassify, or purchase or otherwise acquireacquire directly, or indirectly, any shares of its share capital stockof, or other equity or voting interest in the Company or make any other change in the capital structure of the Company or make any other payment to the Sellers or their Affiliates (other than as set forth, if any, in Section 5.3(b)(iii) of the Company Disclosure Schedule);
(iv) establish, adopt, enter into, fund or accelerate payment under, amend or terminate any Benefit Plan;
(v) establish, adopt, enter into into, fund or accelerate payment under, amend or terminate any contract or commitment with respect to capital expenditures with a value in excess ofagreement, or requiring expenditures by arrangement for the Company and its Subsidiaries in excess ofbenefit of any directors, $10 million, individually, officers or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate of those provided for in the PlanEmployees;
(vi) acquire, by merging hire any new Employee or consolidating with, by purchasing an equity interest in terminate the employment of any Employee;
(vii) pay or a portion of the assets of, or by enter into any other manner, any material business or any Personagreement, or otherwise acquire promise, to pay any bonus, retention or special remuneration to any current or former Employee or increase the compensation payable (including wages, salaries, bonuses, benefits or any other remuneration) or to become payable to any current or former Employee, but other than as required under Contracts existing as of the date hereof;
(viii) grant, accelerate, amend or change the period of exercisability or vesting of any equity award of the Company, or authorize any cash payment in exchange for any equity award of the Company;
(ix) enter into, materially amend, become subject to, violate, terminate or otherwise modify or waive any of the material terms of any Material Contract (including, for the sake of clarity, any Contract that would constitute a Material Contract) or any Company Leases, except for entering into Contracts for the sale of the Company Products in the ordinary course of business, consistent with past practice with a value per contract that does not exceed $50,000;
(x) mortgage, pledge or encumber any assets or otherwise permit any of its properties or assets to be subject to any Lien;
(xi) (i) dispose of, license or transfer to any Person any rights to Company Intellectual Property other than pursuant to non exclusive licenses of binary code in connection with the sale of the Company Products in the ordinary course of business, consistent with past licensing practice, (ii) abandon, permit to lapse or otherwise dispose of any Person Company Intellectual Property, or (other than iii) make any material change in any Company Intellectual Property;
(Axii) sell, transfer, lease, license or otherwise dispose of any material assets or properties, except for the purchase sale of assets Company Products in the ordinary course of business and consistent with past practice, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(viixiii) except in the ordinary course acquire any business, line of business consistent with the Plan including without limitation the implementation or Person by merger or consolidation, purchase of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans)substantial assets or equity interests, and except to the extent required under benefit plansor by any other manner, agreementsin a single transaction or a series of related transactions, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay or enter into any employmentContract, consulting letter of intent or severance agreement similar arrangement (whether or arrangement not enforceable) with respect to the foregoing;
(xiv) enter into or amend any present agreements pursuant to which any other Person is granted exclusive rights of any type or former directorscope with respect to any Company Products;
(xv) make any capital expenditure or commitment therefor or enter into any operating lease in excess of $10,000 individually and $20,000 in the aggregate or otherwise deviate from the Company's short-term budget/forecast attached in Section 5.3(xv) to the Company Disclosure Schedule;
(xvi) (A) take any action reasonably likely to (i) accelerate the payment of customer accounts receivables (including shortening payment terms, officer providing incentives for early payment or other employee otherwise) or (ii) delay the payment on accounts payable to suppliers, vendors or others beyond due dates; (B) make any changes to the cash management policies of the Company; or (C) vary any inventory purchasing practices in any material respect from past practices;
(xvii) terminate or waive any right of the Company or any of its Subsidiaries, or establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000material value;
(viiixviii) except as required by GAAP, make any change in any method of accounting or auditing method, principle, policy, procedure or practice;
(xix) (A) make any Tax election or settle and/or compromise any Tax liability; (B) prepare any Returns in an inappropriate manner; incur any liability for Taxes, other than in the ordinary course of business consistent with past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber ; or subject to any lien, any material assets (C) file an amended Return or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible a claim for the obligations refund of any Person or, make any loan or other extension of credit;
(ix) agree Taxes with respect to the settlement income, operations or property of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its material Subsidiaries (other than the Merger);
(xii) except in the ordinary course of business consistent with past practice, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filingsbusiness;
(xiiixx) except in incur, repay, assume, guarantee or modify any Company Indebtedness;
(xxi) make any loans, advances or capital contributions to, or investments in, any other Person;
(xxii) initiate or settle any litigation;
(xxiii) agree to take (i) any of the ordinary course of business consistent with past practiceactions described above, enter into or (ii) any agreementother action that would prevent the Company from performing, understanding or commitment that restrainscause the Company not to perform, limits or impedes the Company's or any of its Subsidiaries' ability to compete with covenants and agreements under this Agreement or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or under any of its Subsidiaries' activities;
(xiv) take any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions to not be satisfied;
(xv) in the case of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stock; or
(xvi) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receiptAncillary Agreements.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. (a) The Company agrees that, except as permitted, required or specifically contemplated by(i) set forth in Section 5.3 of the Company Disclosure Letter, or otherwise described in, (ii) required by Law or by any Contract listed in the Company Disclosure Letter to which the Company or any of the Company Subsidiaries is a party as of the date of this Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter or otherwise consented to or approved in writing by Parent, during the period commencing on the date hereof until such time as nominees and ending at the earlier of Parent shall comprise more than half (A) the Effective Time and (B) termination of the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereof7.1:
(a1) The the Company shall, shall and shall cause each of its the Company Subsidiaries to, to conduct their respective operations only according to their in the ordinary and usual course of business consistent with past practice practice, including by:
(I) maintaining all of its material properties in customary repair, order and use their condition, reasonable best wear and tear excepted;
(II) complying in all material respects with all applicable Laws;
(III) using its commercially reasonable efforts to preserve intact the goodwill and organization of the Company’s and the Company Subsidiaries’ businesses and their respective business organization, keep available the services of their officers and employees and maintain satisfactory relationships with licensorsits customers, suppliers, distributors, clients, joint venture partners and others having significant business relationships with thememployees; and
(b2) The Company shall not, and shall cause each of its Subsidiaries Company Subsidiary not to, effect any of the following without the prior written consent of Parent:
(iI) amend make any change in or amendment to its Certificate certificate of Incorporation incorporation or its Byby-Laws laws (or comparable governing documents);
(iiII) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securitiesownership interests, as applicable, or issue or sell, or authorize to issue or sell, any securities convertible intointo or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or contract Contract with respect to the issuance or sale of, any shares of its capital stock or any other securitiesownership interests, or make as applicable, except for the issuance by the Company of Common Shares pursuant to the terms of any other changes in its capital structureOptions;
(iiiIII) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stockstock or its other securities, as applicable, except for the acquisition of Options from holders of Options in full or partial payment of the exercise price payable by such holder upon exercise of Options;
(vIV) enter into any contract or commitment with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate of those provided for in the Plan;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets in the ordinary course of business and consistent with past practice, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except in the ordinary course of business consistent with past practice, transferacquire, sell, lease, license, guarantee, sell, mortgage, pledge, license or otherwise dispose of, encumber of any of its properties or subject to assets (including any lien, any material assets or incur or modify any indebtedness shares or other material liability, equity interests in or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person or, make any loan or other extension of creditCompany Subsidiary);
(ixV) agree amend or terminate any Material Contract, enter into a Contract which, had it been entered into prior to the settlement of any material claim or litigation except for settlements which date hereof, would have been specifically reserved for a Material Contract or take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any Material Contract;
(VI) (1) incur any Indebtedness, other than short-term Indebtedness or letters of credit incurred in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in ordinary course of business or borrowings under existing credit facilities set forth on Section 6.3(b)(ix) 3.15 of the Company Disclosure Letter may only be settled for amounts in excess (all of the amounts reserved therefor in the Company's 1998 financial statements which shall constitute Closing Indebtedness), (the "Excess Settlement Amounts"2) make any loans or advances to the extent that the Excess Settlement Amountsany other Person, when aggregated other than loans and advances to employees consistent with all past practice or (3) or make any capital contributions to, or investments in, any other settlements after the date hereof , do not exceed $2,000,000Person (other than a Company Subsidiary);
(xVII) make hire any new officers or rescind (except in the ordinary course of business) any material tax election new employees, modify the employment terms of its officers or settle employees, generally or compromise individually, or grant or agree to grant to any material tax liability;
(xi) adopt officer or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization employee of the Company or any of its material the Company Subsidiaries any increase in wages or bonus, severance, profit sharing, retirement, insurance or other compensation or benefits, or establish any new compensation or benefit plans or arrangements, or amend or agree to amend any existing Employee Benefit Plans, except (other than 1) as may be required under applicable Law, (2) pursuant to the Merger);
Employee Benefit Plans of the Company or any of the Company Subsidiaries in effect on the date hereof, (xii3) except in the case of employees who are not Affiliates, for normal increases in wages in the ordinary course of business consistent with past practice, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against inbusiness, or contemplated by(4) pursuant to the terms of any employment, retention, change-of-control or similar type Contract existing as of the consolidated financial statements (or the notes thereto) contained date hereof and listed in the Commission FilingsCompany Disclosure Letter;
(xiiiVIII) except in the ordinary course of business consistent with past practicemake or change any Tax election not required by Law, change an annual accounting period, file any amended Tax Return, enter into any closing agreement, understanding waive or commitment that restrainsextend any statute of limitations with respect to Taxes, limits surrender any right to claim a refund of Taxes, settle or impedes compromise any Tax liability, claim or assessment, or take any other similar action relating to the Company's filing of any Tax Return or the payment of any Tax;
(IX) waive any rights of substantial value or cancel or forgive any material Indebtedness owed to the Company or any of its the Company Subsidiaries' ability , other than Indebtedness of the Company owed to compete with a Subsidiary of the Company or conduct any business Indebtedness of a Subsidiary of the Company owed to the Company or line another Subsidiary of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xivX) take except as may be required by Law or under GAAP, make any actionchange in its methods, engage in any transaction or enter into any agreement which would cause any principles and practices of the Tender Offer Conditions to not be satisfiedaccounting, including tax accounting policies and procedures;
(xvXI) acquire any capital stock or other equity interest, or all or substantially all of the assets of any Person;
(XII) declare, set aside or pay any dividend or other distribution (other than a dividend payable solely in cash) in the case of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stock;
(XIII) mortgage or pledge any of its property or assets or subject any such property or assets to any Lien (other than a Permitted Lien);
(XIV) make or commit to make any capital expenditure in excess of $50,000;
(XV) institute or settle any legal proceeding;
(XVI) take any action or fail to take any action permitted by this Agreement with the Knowledge that such action or failure to take action would result in (i) any of the representations and warranties of the Company set forth in this Agreement becoming untrue or (ii) any of the conditions to the Merger set forth in Article VI not being satisfied; or
(xviXVII) agreeauthorize any of, in writing or otherwise, commit or agree to take any of, the foregoing actions in respect of which it is restricted by the provisions of this Section 5.3.
(b) The Company and the Company Subsidiaries shall be permitted to maintain through the Closing Date the cash management systems of the foregoing actionsCompany and the Company Subsidiaries, maintain the cash management procedures as currently conducted by the Company and the Company Subsidiaries, and periodically settle intercompany balances consistent with past practices (including through dividends and capital contributions and all such intercompany balances shall be settled at the Closing in accordance with their terms). The Company agrees and the Company Subsidiaries are allowed to consult at least bi-weekly (dividend all or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress portion of the transactions described on Schedule 6.3 Cash and Cash Equivalents of the Company Disclosure Letter. Each of and the parties agree Company Subsidiaries to designate an officer Preferred Stockholders immediately prior to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receiptClosing.
Appears in 1 contract
Samples: Merger Agreement (Bottomline Technologies Inc /De/)
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter Agreement or otherwise consented to or approved in writing by ParentParent (which consent or approval shall not be unreasonably withheld or delayed), during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half of the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereofEffective Time:
(a) The the Company shall, and shall cause each of its Subsidiaries to, shall conduct their respective operations in all material respects only according to their ordinary and usual course of business consistent with past practice and shall use their reasonable best efforts to preserve intact their respective business organization, keep available the services of their officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners and others having significant business relationships with them; and
(b) The Except as set forth in Section 7.03(b) of the Company shall notDisclosure Letter or as expressly contemplated by this Agreement, and shall cause each neither the Company nor any of its Subsidiaries not toshall:
(i) amend its make any change in or amendment to the Company's Certificate of Incorporation or its By-Laws (or comparable governing documents)Laws;
(ii) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock or any other securities, or make any other changes in its capital structure;
, other than (iiii) sell the issuance of Company Common Stock upon the exercise of Options or pledge in connection with Company Stock Rights outstanding on the date hereof, in each case in accordance with their present terms or agree pursuant to sell or pledge any stock Options or other equity interest owned by it in any other Person except Company Stock Rights granted pursuant to clause (ii) below, (ii) the extent required to be pledged to the collateral agent granting of Options or Company Stock Rights granted under the Credit Facility;
(iv) except Company Stock Plans in effect on the case of the Company's wholly-owned Subsidiaries, date hereof in the ordinary course of business consistent with past practicepractice not in excess of the amounts set forth in Section 7.03(b) of the Company Disclosure Letter, (iii) issuances by a wholly-owned Subsidiary of the Company of capital stock to such Subsidiary's parent, the Company or another wholly-owned Subsidiary of the Company or (iv) issuances of Company Common Stock upon the conversion of convertible securities of the Company outstanding as of the date of this Agreement;
(iii) declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stockstock or its other securities, other than dividends payable by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company (it being understood that the Company's Board of Directors may declare and the Company may pay quarterly dividends of not more than $0.25 per share on the schedule which has been publicly announced by the Company on or prior to the date of this Agreement);
(viv) enter into other than in connection with transactions permitted by Section 7.03(b)(v), incur any contract or commitment with respect to capital expenditures with a value or any obligations or liabilities in excess ofrespect thereof, or requiring expenditures except for those (A) contemplated by the capital expenditure budgets for the Company and its Subsidiaries in excess ofmade available to Parent, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate of those provided for in the Plan;
(viB) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets incurred in the ordinary course of business of the Company and consistent with past practice, its Subsidiaries or (C) not otherwise described in clauses (A) and (B) intercompany transactions and (C) acquisitions which which, in the aggregate aggregate, do not exceed $10 25 million);
(viiv) acquire (whether pursuant to merger, stock or asset purchase or otherwise) in one transaction or series of related transactions (A) any assets (including any equity interests) having a fair market value in excess of $25 million, or (B) all or substantially all of the equity interests of any Person or any business or division of any Person having a fair market value in excess of $25 million;
(vi) except in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), past practice and except to the extent required under existing employee and director benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulationAgreement, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay not currently required to be paid under existing severance plans or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or establish, adopt, enter into or, except or amend in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend any material respect or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viiivii) except in the ordinary course of business consistent with past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lienLien, any material assets assets, other than in the ordinary course of business;
(viii) except as required by applicable law or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person orGAAP, make any loan or other extension material change in its method of creditaccounting;
(ix) agree to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its material Subsidiaries (other than the Merger)) or any agreement relating to a Takeover Proposal, except as provided for in Section 7.07;
(xiix) except (A) incur any material indebtedness for borrowed money or guarantee any such indebtedness of another Person, other than indebtedness owing to or guarantees of indebtedness owing to the Company or any direct or indirect wholly-owned Subsidiary of the Company or (B) make any loans or advances to any other Person, other than to the Company or to any direct or indirect wholly-owned Subsidiary of the Company, except, in the case of clause (A), for borrowings in the ordinary course of business consistent with past practice, including without limitation borrowings under existing credit facilities described in the Company SEC Reports in the ordinary course of business consistent with past practice for working capital purposes;
(xi) accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits;
(xii) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)) over $15 million, individually or in the aggregate, other than the payment, discharge or satisfaction (A) of any such claims, liabilities or obligations in the ordinary course of business and consistent with past practice or (B) of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission FilingsCompany SEC Reports;
(xiii) except in the ordinary course of business consistent with past practice, enter into any agreement, understanding or commitment that materially restrains, limits or impedes the Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xiv) take plan, announce, implement or effect any actionmaterial reduction in labor force, engage in any transaction lay-off, early retirement program, severance program or enter into any agreement which would cause any other program or effort concerning the termination of employment of employees of the Tender Offer Conditions to Company or its Subsidiaries; provided, however, that routine employee terminations for cause shall not be satisfiedconsidered subject to this clause (xiv);
(xv) in the case of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder shareholder with respect to, securities of the Company that may be acquired or controlled by Parent or Merger Sub or permit any stockholder shareholder to acquire securities of the Company on a basis not available to Parent or Merger Sub in the event that Parent or Merger Sub were to acquire any additional shares of the Company Common Stock;
(xvi) materially modify, amend or terminate any material contract to which it is a party or waive any of its capital stockmaterial rights or claims except in the ordinary course of business consistent with past practice;
(xvii) other than in the ordinary course of business consistent with past practice, make any tax election or enter into any settlement or compromise of any tax liability that in either case is material to the business of the Company and its Subsidiaries as a whole; or
(xvixviii) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except Except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter Agreement or otherwise consented to or approved in writing by Parent, which consent or approval shall not be unreasonably withheld, conditioned or delayed in the case of clauses 8.2(b)(4) or (12), and except as set forth in Section 8.2 of the Company Disclosure Schedule, during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half of the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereofEffective Time:
(a) The Company shall, and shall cause each of its Subsidiaries to, shall conduct their respective operations only according to their ordinary and usual course of business consistent with past practice and shall use their reasonable best efforts to preserve intact their respective business organizationorganizations, keep available the services of their officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners and others those Persons having significant business relationships with them; and;
(b) The Neither the Company shall not, and shall cause each nor any of its Subsidiaries not toshall:
(i1) amend make any change in or amendment to its Certificate certificate or articles of Incorporation incorporation or its Byby-Laws (laws or comparable governing similar organizational 36 of 56 documents);
(ii2) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock stock, Voting Debt or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock stock, Voting Debt or any other securities, or make any other changes in its capital structure;
(iii3) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stockstock or its other securities, other than (A) normal quarterly cash dividends not in excess of U.S. $0.19 per share declared and paid in accordance with the Company's past dividend policy, provided that the timing of the declaration, record and payment dates, shall be the same dates as were used by the Company in the last calendar year, or, if any such date shall not be a Business Day, the next succeeding Business Day, and provided further, that no such cash dividends shall be declared after Consummation of the Offer or (B) dividends payable by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(v4) enter into incur any contract capital expenditures or commitment any obligations or liabilities in respect thereof, except (A) with respect to expansion projects, for expenditures for such projects which are consistent with the budget for the Company set forth in Section 8.2(b) of the Company Disclosure Schedule (the "COMPANY BUDGET"), (B) those required for maintenance and replacement in the ordinary course of business not to exceed the amounts provided for maintenance and replacement in the Company Budget and (C) capital expenditures with a value in excess of, or requiring expenditures by outside the scope of the Company and its Subsidiaries in excess of, Budget that do not exceed U.S. $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess 250,000 in the aggregate of those provided for in the Plan;aggregate.
(vi5) acquire, acquire or agree to acquire (A) by merging or consolidating with, or by purchasing an equity interest in or a substantial portion of the assets of, or by any other manner, any material business or any Personcorporation, partnership, joint venture, association or otherwise acquire other business organization or division thereof (excluding any assets of any Person (other than (Athe Company's Subsidiaries) the purchase of assets in the ordinary course of business and consistent with past practice, or (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) any assets, including real estate, except purchases of inventory, equipment, or other non-material assets in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs Company Budget;
(including its management incentives and sales compensation plans), and 6) (A) except to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements existing Company Benefit Plans as in effect on the date of this Agreement or applicable law, rule or regulationAgreement, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay or not currently required to be paid under existing severance plans; (B) enter into any employment, employment or consulting or severance agreement or arrangement with any present or former directordirector or officer of the Company or any of its Subsidiaries, officer or any employment or consulting agreement with any other employee of the Company or any of its Subsidiaries, ; or establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viiiC) except in the ordinary course of business consistent with past practicepractice and to the extent necessary to fill vacancies, hire or agree to hire, or enter into any written employment agreement with, any new or additional employee or officer having an annual base salary of U.S. $40,000 or more or, in the aggregate, annual base salaries of U.S. $500,000 or more;
(7) except as required to comply with applicable Law or expressly provided in this Agreement, (A) adopt, enter into, terminate or amend any Company Benefit Plan, collective bargaining agreement or other arrangement for the current or future benefit or welfare of any director, officer or current or former employee, (B) pay any benefit not required under any Company Benefit Plan, accelerate the payment, right of payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, (C) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Company Benefit Plan (including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any Company Benefit Plans or agreements or awards made thereunder) or (D) except as required by the current terms thereof take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or arrangement or Company Benefit Plan;
(8) transfer, leaselease (as lessor), license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lienLien, any material assets assets, other than in the ordinary course of business and consistent with past practice, except as provided for in Section 8.2(b)(11) or incur in an amount in the aggregate not to exceed U.S. $250,000;
(9) except as required by applicable Law or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person orGAAP, make any loan or other extension change in its methods of creditaccounting;
(ix) agree to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election or settle or compromise any material tax liability;
(xi10) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its material Subsidiaries (other than the Merger), except as provided for in Section 8.5;
(xiiA) Incur any long-term indebtedness (other than under existing revolving credit facilities, as may be amended as contemplated hereby) or, except in the ordinary course of business consistent with past practice, pay, discharge or satisfy any short-term indebtedness; (B) modify any material claimsindebtedness or other liability; (C) assume, liabilities guarantee, endorse or obligations otherwise become liable or responsible (absolutewhether directly, accrued, asserted or unasserted, contingent contingently or otherwise)) for the obligations or indebtedness of any other Person; (D) make any loans, advances or capital contributions to, or investments in, any other Person (other than in or to wholly owned Subsidiaries of the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against inCompany, or contemplated byby wholly owned Subsidiaries to the Company, or customary loans or advances to employees); (E) other than with respect to the consolidated financial statements settlement of any claim that is completely covered (or the notes thereto) contained in the Commission Filings;
(xiii) except in the ordinary course of business consistent other than with past practice, enter into any agreement, understanding or commitment that restrains, limits or impedes respect to deductibles to the Company's insurance policies) by the Company's insurance carrier, settle any claims against the Company or any of its Subsidiaries' ability to compete with Subsidiaries where the amounts payable by the Company and its Subsidiaries would exceed U.S. $25,000 individually or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xiv) take any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions to not be satisfied;
(xv) U.S. $250,000 in the aggregate, in each such case without admission of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stockliability; or
(xvi) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt.
Appears in 1 contract
Samples: Merger Agreement (Cemex Sa De Cv)
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter or otherwise consented to or approved in writing by Parent, during During the period commencing on the date hereof until such time and ending at the earlier of (x) the Closing Date and (y) the termination of this Agreement pursuant to Section 9.1, except as nominees of Parent shall comprise more than half expressly required under this Agreement or as otherwise set forth in Section 6.3 of the members Company Disclosure Letter, the Company shall, and the Seller shall cause the Company to (a) conduct its business in the ordinary course consistent with past practice, and (b) use its commercially reasonable efforts to preserve intact its business organizations and relationships with third parties, including its customers, suppliers and others having business dealings with them, and to keep available the services of their present officers and significant employees (provided that this clause (b) shall not oblige the Company to make any out-of-pocket payments to such third parties, customers, suppliers, officers or significant employees). Without limiting the generality of the Board foregoing, except (A) as expressly required under this Agreement, (B) as required by applicable Laws or any Governmental Entity or (C) as otherwise set forth in Section 6.3 of Directors the Company Disclosure Letter or required under Contracts which are in existence on the date hereof, from the date hereof until the earlier of (x) the Closing Date and (y) the termination of this Agreement pursuant to Section 9.1, the Company shall not, and the Seller shall cause the Company not to, take any of the following actions without the prior written consent of the Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed):
(a) amend the Company’s certificate of formation or limited liability company agreement;
(b) authorize the issuance of or grant any membership interests of the Company, transfer, sell or otherwise dispose of, purchase, redeem or subject to any new Lien (other than Permitted Liens) any membership interests of the Company or this Agreement shall have been terminated pursuant issue or become obligated with respect to Section 9.1 hereof:any Commitment with respect to the Company;
(ac) The sell, transfer or otherwise dispose of, or subject to any new Lien (other than Permitted Liens), any Owned Real Property or fixed assets that are material to the conduct of the business of the Company;
(d) incur any new Company shallIndebtedness for borrowed money with any third party or with the Seller or its Affiliates, and shall cause each other than as reasonably necessary to meet working capital requirements or in the ordinary course of its Subsidiaries tobusiness or in replacement of existing Company Indebtedness, conduct their respective operations only according provided that such new Company Indebtedness is fully prepayable at the Closing without penalty;
(e) split, combine, divide, distribute, or reclassify any membership interests of the Company, declare, pay, or set aside for payment any non-cash dividend or other non-cash distribution in respect of the Company’s membership interests;
(f) undertake a Bankruptcy Event;
(g) dissolve, liquidate or merge or consolidate the Company with or into any other entity;
(h) establish, sponsor, amend or terminate (except for amendments which do not increase costs to their the Company) any Employee Plan;
(i) complete any acquisition (by merger, consolidation, or acquisition of stock or assets) of any Person or any division or assets thereof;
(j) materially increase the compensation payable or paid, whether conditionally or otherwise, to any director, officer, Employee, consultant or agent other than in the ordinary and usual course of business consistent with past practice and use their reasonable best efforts to preserve intact their respective business organization, keep available the services of their officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners and others having significant business relationships with them; and
(b) The Company shall not, and shall cause each of its Subsidiaries not to:
(i) amend its Certificate of Incorporation or its By-Laws (or comparable governing documents);
(ii) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe topractices, or enter into or amend arrangements requiring severance, change of control or other payments in connection with the transactions contemplated hereby;
(k) except as required by GAAP (or interpretations thereof by recognized accounting boards or institutions) or by applicable Law, change any arrangement of the material accounting principles or contract with respect to practices used by the issuance Company;
(l) assume, guarantee, endorse, or sale ofotherwise become liable or responsible (whether directly, contingently, or otherwise) for the obligations of any shares person other than the Company (other than endorsements of its capital stock or any other securities, checks in the ordinary course) or make any loans, advances (other changes in its capital structure;
(iii) sell than advances or pledge or agree loans to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, Employees in the ordinary course of business consistent with past practice), declareor capital contributions to, pay or set aside investments in, any dividend other Person;
(m) make or change any material Tax election, change any annual Tax accounting period, adopt or change any material method of Tax accounting, amend any material Tax Returns or file any claims for material Tax refunds, enter into any material closing agreement, settle any material Tax claim, audit or assessment or surrender any right to claim a material Tax refund, offset or other reduction in Tax liability, provided that, this Section 6.3(m) shall not apply to any Consolidated Tax or Tax Return of any Seller Consolidated Group unless such action would be reasonably expected to cause any adverse effect (other than dividends a de minimis one) on the Series A Preferred Stock Company or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stockPurchaser after the Closing;
(vn) enter into engage in any contract or commitment transaction with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate of those provided for in the Plan;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business Seller or any Personof its respective Affiliates, or otherwise acquire any assets of any Person (other than (Ai) ordinary course transactions and arrangements consistent with past practices, (ii) the purchase distribution to the Seller of assets all cash and other funds of the Company in a manner consistent with past practices or (iii) purchase, sale or other trade transactions in the ordinary course of business and consistent with past practicepractices, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million)each case on arm’s length terms;
(viiA) except in the ordinary course of business consistent with the Plan including without limitation the implementation make any material payments or grant any material discounts or any other consideration to customers or suppliers of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except to the extent required under benefit plansin each case, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except in the ordinary course of business consistent with past practicepractice or (B) otherwise change any billing or cash management practices or methods used by the Company, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for than in the obligations ordinary course of any Person or, make any loan or other extension of creditbusiness;
(ixp) agree to the settlement of make any amendment, forgive, cancel, compromise or waive any material claim claim, debt or litigation except for settlements which have been specifically reserved for in right of the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(xq) make enter into, assume, amend, assign or rescind terminate any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company Material Contract or any of its material Subsidiaries (agreement that would be a Material Contract, other than the Merger);
(xii) except Material Contracts entered into in the ordinary course of business consistent with past practice, pay, discharge or satisfy practice and providing for payments over the term of such agreements of no more than $1,000,000 with respect to any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained single agreement and $3,000,000 in the Commission Filingsaggregate;
(xiiir) except acquire or dispose of any real property or any direct or indirect interest in the ordinary course any real property;
(s) forgive, cancel or compromise any material debt or claim, or waive or release any right of business consistent with past practicematerial value;
(t) settle or compromise any material litigation, enter into any agreement, understanding or commitment a new line of business that restrains, limits or impedes is material to the Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;; or
(xivu) take any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions to not be satisfied;
(xv) in the case of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder Contract with respect to, securities of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stock; or
(xvi) agreeauthorize, in writing or otherwise, to take any of the actions described in the foregoing actions. The Company agrees to consult at least bi-weekly clauses (or such shorter intervals as Parent may reasonably requesta) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations through (each, a "Designated Representative"t). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt.
Appears in 1 contract
Samples: Equity Purchase Agreement (Nci Building Systems Inc)
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Agreement or Schedule 6.3 of the Company's Disclosure Letter 5.2 or otherwise consented to or approved in writing by ParentEMKT (which consent shall not be unreasonably withheld, delayed or conditioned), during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half of and ending on the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereofClosing Date:
(a) The Company shall, and shall cause each of its Subsidiaries to, will conduct their respective operations only according to their ordinary and usual course of business consistent with past practice and will use their reasonable best efforts to preserve intact their respective business organization, keep available the services of their officers and employees and maintain satisfactory relationships with licensorslicensers, suppliers, distributors, clients, joint venture partners clients and others having significant business relationships with them; and;
(b) The Neither the Company shall not, and shall cause each nor any of its Subsidiaries not to:
shall (i) amend make any change in or amendment to its Certificate of Incorporation or its By-Laws (or comparable governing documents);
; (ii) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, sell any shares of its capital stock (other than in connection with the exercise of Company Options outstanding on the date hereof) or any of its other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe to, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock or any of its other securities, or make any other changes in its capital structure;
; (iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside make any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stock;
; (viv) enter into any contract or commitment with respect to capital expenditures with commitment, except for contracts in the ordinary course of business, including without limitation, any acquisition of a value in excess ofmaterial amount of assets or securities, any disposition of a material amount of assets or securities or release or relinquish any material contract rights; (v) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently, or requiring expenditures by otherwise) for the Company and its Subsidiaries in excess of, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate obligations of those provided for in the Plan;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets a Subsidiary in the ordinary course of business and consistent with past practice; (vi) incur, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except assume or prepay any indebtedness or other material liabilities other than in the ordinary course of business and consistent with past practices, except that the Plan including without limitation Company may prepay its legal fees in connection with the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except Transactions to the extent required under benefit plansthey do not exceed the amount set forth in Section 9.1(a); (vii) make any loans, agreementsadvances or capital contributions to, collective bargaining agreements or their arrangements as investments in, any other Person, other than to Subsidiaries; (viii) authorize capital expenditures in effect on excess of the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of amount currently budgeted therefor; (ix) permit any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of insurance policy naming the Company or any Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of its Subsidiariesbusiness; (x) amend any employee or nonemployee benefit plan or program, employment agreement, license agreement or retirement agreement, or establish, adopt, enter into orpay any bonus or contingent compensation, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except each case in the ordinary course of business consistent with past practicepractice prior to the date of this Agreement; (xi) agree, transferin writing or otherwise, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber to take any of the foregoing actions; or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person or, make any loan or other extension of credit;
(ixxii) agree to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000litigation;
(xc) make or rescind any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidationThe Company shall not, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or and shall not permit any of its material Subsidiaries to (other than the Merger);
(xii) except in the ordinary course of business consistent with past practice, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filings;
(xiii) except in the ordinary course of business consistent with past practice, enter into any agreement, understanding or commitment that restrains, limits or impedes the Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xivi) take any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions representations or warranties set forth in Article III to not be satisfied;
untrue as of the Closing Date, or (xvii) in the case purchase or acquire, or offer to purchase or acquire, any shares of capital stock of the Company only, take and the Company shall not sell or pledge or agree to sell or pledge any action including, without limitation, stock owned by it in any of the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to voteSubsidiaries, or otherwise allow any Subsidiary to exercise pledge or agree to sell or pledge any stock owned by it in any other Subsidiary.
(d) The Company will use its commercially reasonable best efforts to deliver to EMKT prior to the rights and receive the benefits of Closing a stockholder with respect to, securities consolidated balance sheet as of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities end of the Company fiscal year ended July 31, 1999 and the related consolidated statements of operations, stockholders' equity and cash flows for the fiscal year then ended, prepared in accordance with GAAP and on a basis not available to Parent or Sub in the event consistent with that Parent or Sub were to acquire any shares of its capital stock; or
(xvi) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees statements delivered pursuant to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt3.5.
Appears in 1 contract
Samples: Stock Purchase and Contribution Agreement (Emarketplace Inc)
Conduct of the Business of the Company Pending the Closing Date. (a) The Company agrees that, except as permitted, required or specifically expressly contemplated by, or otherwise described in, by this Agreement, as set forth on Schedule 6.3 of Agreement and the Company's Disclosure Letter or otherwise consented to or approved in writing by ParentAncillary Agreements, during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half of and ending on the members of the Board of Directors of Expiration Date, the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereof:
(a) The Company shall, and shall cause each of conduct its Subsidiaries to, conduct their respective operations only according to their in the ordinary and usual course of business consistent with past practice and to use their its commercially reasonable best efforts to preserve intact their its respective business organizationorganizations, keep available the services of their officers and employees its Employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners clients and others having significant business relationships with them; and.
(b) The In furtherance and not in limitation of Section 5.3(a), the Company agrees that during the period commencing on the date hereof and ending on the Expiration Date, the Company shall notnot effect any of the following except with the prior written consent (including email) of Parent (which shall not be unreasonably withheld, conditioned or delayed), except as expressly contemplated by this Agreement and the Ancillary Agreements, and shall cause each except as set forth on Section 5.3(b) of its Subsidiaries not tothe Company Disclosure Schedule:
(i) amend or restate any of its Certificate of Incorporation or its By-Laws (or comparable governing documents)Organizational Documents;
(ii) except authorize for issuance, issue, grant, sell or deliver (A) any capital stock of, or other equity or voting interest in, the Company, other than issuance of shares of Company Capital Stock upon the exercise of Company Stock Options outstanding on the date hereof in accordance with the existing terms of such outstanding Company Stock Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe toexchangeable for, or enter into evidencing the right to subscribe for or acquire any arrangement (1) shares of capital stock of, or contract with respect other equity or voting interest in, the Company, (2) securities convertible into, exchangeable for, or evidencing the right to the issuance subscribe for or sale ofacquire, any shares of its the capital stock or any other securitiesof, or make any other changes in its capital structureequity or voting interest in, the Company including rights, warrants or options, or (3) phantom stock or similar equity based payment option;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend or make any distribution (other than dividends on the Series A Preferred Stock or Series B Preferred Stock whether in accordance with the terms of their respective Certificates of Designation) cash, stock or other distribution or payment property) with respect to, or split, combine, redeem or redeem, reclassify, or purchase or otherwise acquireacquire directly, or indirectly, any shares of its capital stockstock of, or other equity or voting interest in, the Company, or make any other change in the capital structure of the Company or make any other payment to the Company Stockholders;
(iv) establish, adopt, enter into, fund or accelerate payment under, amend or terminate any Benefit Plan;
(v) establish, adopt, enter into into, fund or accelerate payment under, amend or terminate any contract or commitment with respect to capital expenditures with a value in excess ofagreement, or requiring expenditures by arrangement for the Company and its Subsidiaries in excess ofbenefit of any directors, $10 million, individually, officers or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate of those provided for in the PlanEmployees;
(vi) acquirehire any new Employee or terminate the employment of any Employee;
(vii) pay or enter into any agreement, by merging or consolidating withotherwise promise, by purchasing an equity interest in to pay any bonus, retention or a portion special remuneration to any current or former Employee or increase the compensation payable (including wages, salaries, bonuses, benefits or any other remuneration) or to become payable to any current or former Employee, but other than as required under Contracts existing as of the date hereof;
(viii) grant, accelerate, amend or change the period of exercisability or vesting of any Company Stock Option or authorize any cash payment in exchange for a Company Stock Option or other equity award of the Company;
(ix) enter into, materially amend, become subject to, violate, terminate or otherwise modify or waive any of the material terms of any Material Contract (including, for the sake of clarity, any Contract that would constitute a Material Contract) or any Company Leases, except for entering into Contracts for the sale of the Company Products in the ordinary course of business, consistent with past practice, that (i) are with a value per contract that does not exceed $50,000 and (ii) do not contain any of the restrictions of the sort specified in, or would otherwise qualify as Material Contracts under, Sections 2.13(a)(ii), (vii), (xi), (xii) or (xxi);
(x) mortgage, pledge or encumber any assets or otherwise permit any of its properties or assets to be subject to any Lien;
(xi) (i) dispose of, license or transfer to any Person any rights to Company Intellectual Property other than pursuant to non exclusive licenses of binary code in connection with the sale of the Company Products in the ordinary course of business, consistent with past licensing practice, (ii) abandon, permit to lapse or otherwise dispose of any Company Intellectual Property, or (iii) make any material change in any Company Intellectual Property;
(xii) sell, transfer, lease, license or otherwise dispose of any material assets or properties, except for the sale of Company Products in the ordinary course of business and consistent with past practice;
(xiii) acquire any business, line of business or Person by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, any material business in a single transaction or any Persona series of related transactions, or otherwise acquire enter into any assets Contract, letter of intent or similar arrangement (whether or not enforceable) with respect to the foregoing;
(xiv) enter into or amend any agreements pursuant to which any other Person is granted exclusive rights of any Person type or scope with respect to any Company Products;
(other than xv) make any capital expenditure or commitment therefor or enter into any operating lease in excess of $5,000 individually and $10,000 in the aggregate or otherwise deviate from the Company's short-term budget/forecast attached to Section 5.3(xv) of the Company Disclosure Schedule;
(xvi) (A) take any action reasonably likely to (i) accelerate the purchase payment of assets customer accounts receivables (including shortening payment terms, providing incentives for early payment or otherwise) or (ii) delay the payment on accounts payable to suppliers, vendors or others beyond due dates; (B) make any changes to the cash management policies of the Company, or (C) vary any inventory purchasing practices in any material respect from past practices;
(xvii) terminate or waive any right of the Company of material value;
(xviii) except as required by GAAP, make any change in any method of accounting or auditing method, principle, policy, procedure or practice;
(xix) (A) make any Tax election or settle and/or compromise any Tax liability; (B) prepare any Returns in an inappropriate manner; incur any liability for Taxes, other than in the ordinary course of business and consistent with past practice, (B) intercompany transactions and or (C) acquisitions which in file an amended Return or a claim for refund of Taxes with respect to the aggregate do not exceed $10 million);
(vii) except income, operations or property of the Company, other than in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except in the ordinary course of business consistent with past practice;
(xx) incur, transferrepay, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of modify any Person or, make any loan or other extension of creditCompany Indebtedness;
(ixxxi) make any loans, advances or capital contributions to, or investments in, any other Person;
(xxii) initiate or settle any litigation;
(xxiii) agree to the settlement of take (i) any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements actions described above, or (the "Excess Settlement Amounts"ii) to the extent any other action that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of would prevent the Company from performing, or cause the Company not to perform, any of its material Subsidiaries (other than the Merger);
(xii) except in the ordinary course of business consistent with past practice, pay, discharge covenants and agreements under this Agreement or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filings;
(xiii) except in the ordinary course of business consistent with past practice, enter into any agreement, understanding or commitment that restrains, limits or impedes the Company's or under any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xiv) take any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions to not be satisfied;
(xv) in the case of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stock; or
(xvi) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receiptAncillary Agreements.
Appears in 1 contract
Samples: Merger Agreement (Attunity LTD)
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except Except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter Agreement or otherwise consented to or approved in writing by Parent, which consent or approval shall not be unreasonably withheld, conditioned or delayed in the case of clauses 8.2(b)(4) or (12), and except as set forth in Section 8.2 of the Company Disclosure Schedule, during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half of the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereofEffective Time:
(a) The Company shall, and shall cause each of its Subsidiaries to, shall conduct their respective operations only according to their ordinary and usual course of business consistent with past practice and shall use their reasonable best efforts to preserve intact their respective business organizationorganizations, keep available the services of their officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners and others those Persons having significant business relationships with them; and;
(b) The Neither the Company shall not, and shall cause each nor any of its Subsidiaries not toshall:
(i1) amend make any change in or amendment to its Certificate certificate or articles of Incorporation incorporation or its Byby-Laws (laws or comparable governing similar organizational documents);
(ii2) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock stock, Voting Debt or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock stock, Voting Debt or any other securities, or make any other changes in its capital structure;
(iii3) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stockstock or its other securities, other than (A) normal quarterly cash dividends not in excess of U.S. $0.19 per share declared and paid in accordance with the Company's past dividend policy, provided that the timing of the declaration, record and payment dates, shall be the same dates as were used by the Company in the last calendar year, or, if any such date shall not be a Business Day, the next succeeding Business Day, and provided further, that no such cash dividends shall be declared after Consummation of the Offer or (B) dividends payable by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(v4) enter into incur any contract capital expenditures or commitment any obligations or liabilities in respect thereof, except (A) with respect to expansion projects, for expenditures for such projects which are consistent with the budget for the Company set forth in Section 8.2(b) of the Company Disclosure Schedule (the "COMPANY BUDGET"), (B) those required for maintenance and replacement in the ordinary course of business not to exceed the amounts provided for maintenance and replacement in the Company Budget and (C) capital expenditures with a value in excess of, or requiring expenditures by outside the scope of the Company and its Subsidiaries in excess of, Budget that do not exceed U.S. $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess 250,000 in the aggregate of those provided for in the Plan;aggregate.
(vi5) acquire, acquire or agree to acquire (A) by merging or consolidating with, or by purchasing an equity interest in or a substantial portion of the assets of, or by any other manner, any material business or any Personcorporation, partnership, joint venture, association or otherwise acquire other business organization or division thereof (excluding any assets of any Person (other than (Athe Company's Subsidiaries) the purchase of assets in the ordinary course of business and consistent with past practice, or (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) any assets, including real estate, except purchases of inventory, equipment, or other non-material assets in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs Company Budget;
(including its management incentives and sales compensation plans), and 6) (A) except to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements existing Company Benefit Plans as in effect on the date of this Agreement or applicable law, rule or regulationAgreement, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay or not currently required to be paid under existing severance plans; (B) enter into any employment, employment or consulting or severance agreement or arrangement with any present or former directordirector or officer of the Company or any of its Subsidiaries, officer or any employment or consulting agreement with any other employee of the Company or any of its Subsidiaries, ; or establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viiiC) except in the ordinary course of business consistent with past practicepractice and to the extent necessary to fill vacancies, hire or agree to hire, or enter into any written employment agreement with, any new or additional employee or officer having an annual base salary of U.S. $40,000 or more or, in the aggregate, annual base salaries of U.S. $500,000 or more;
(7) except as required to comply with applicable Law or expressly provided in this Agreement, (A) adopt, enter into, terminate or amend any Company Benefit Plan, collective bargaining agreement or other arrangement for the current or future benefit or welfare of any director, officer or current or former employee, (B) pay any benefit not required under any Company Benefit Plan, accelerate the payment, right of payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits, (C) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Company Benefit Plan (including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any Company Benefit Plans or agreements or awards made thereunder) or (D) except as required by the current terms thereof take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or arrangement or Company Benefit Plan;
(8) transfer, leaselease (as lessor), license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lienLien, any material assets assets, other than in the ordinary course of business and consistent with past practice, except as provided for in Section 8.2(b)(11) or incur in an amount in the aggregate not to exceed U.S. $250,000;
(9) except as required by applicable Law or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person orGAAP, make any loan or other extension change in its methods of creditaccounting;
(ix) agree to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election or settle or compromise any material tax liability;
(xi10) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its material Subsidiaries (other than the Merger), except as provided for in Section 8.5;
(xiiA) Incur any long-term indebtedness (other than under existing revolving credit facilities, as may be amended as contemplated hereby) or, except in the ordinary course of business consistent with past practice, pay, discharge or satisfy any short-term indebtedness; (B) modify any material claimsindebtedness or other liability; (C) assume, liabilities guarantee, endorse or obligations otherwise become liable or responsible (absolutewhether directly, accrued, asserted or unasserted, contingent contingently or otherwise)) for the obligations or indebtedness of any other Person; (D) make any loans, advances or capital contributions to, or investments in, any other Person (other than in or to wholly owned Subsidiaries of the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against inCompany, or contemplated byby wholly owned Subsidiaries to the Company, or customary loans or advances to employees); (E) other than with respect to the consolidated financial statements settlement of any claim that is completely covered (or the notes thereto) contained in the Commission Filings;
(xiii) except in the ordinary course of business consistent other than with past practice, enter into any agreement, understanding or commitment that restrains, limits or impedes respect to deductibles to the Company's insurance policies) by the Company's insurance carrier, settle any claims against the Company or any of its Subsidiaries' ability to compete with Subsidiaries where the amounts payable by the Company and its Subsidiaries would exceed U.S. $25,000 individually or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xiv) take any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions to not be satisfied;
(xv) U.S. $250,000 in the aggregate, in each such case without admission of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stockliability; or
(xvi) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt.
Appears in 1 contract
Samples: Merger Agreement (Cemex Sa De Cv)
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Schedule 6.3 in Section 5.3 of the Company's Company Disclosure Letter or otherwise consented to as expressly permitted or approved in writing required by Parentthis Agreement, during the period commencing on the date hereof until such time as nominees and ending at the earlier of Parent shall comprise more than half (x) the Effective Time and (y) termination of the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereof7.1:
(a) The the Company shall, and shall cause each of its the Company Subsidiaries to, shall conduct their respective operations in all material respects only according to their in the ordinary and usual course of business consistent with past practice and and, to the extent consistent therewith, use their commercially reasonable best efforts to preserve intact their respective business organizationorganizations, keep available the services of their current officers and employees senior management and maintain satisfactory preserve its present relationships with licensors, suppliers, distributors, clients, joint venture partners and others any Person having significant business relationships with themthe Company or any such Company Subsidiary; and
(b) The neither the Company nor any of the Company Subsidiaries shall noteffect any of the following without the prior written consent of Parent (such consent not to be unreasonably withheld, and shall cause each of its Subsidiaries not to:conditioned or delayed):
(i) amend make any change in or amendment to its Certificate certificate of Incorporation incorporation or its Byby-Laws laws (or comparable governing documents);
(ii) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securitiesownership interests, or issue or sell, or authorize to issue or sell, any securities convertible intointo or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or contract Contract with respect to the issuance or sale of, any shares of its capital stock or any other securitiesownership interests except for the issuance by the Company of Common Shares or Preferred Shares, as applicable, pursuant to the terms of any Options or make any other changes in its capital structureWarrants, and except as contemplated by Section 5.21;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stockstock or its other securities, except for the acquisition of Options or Warrants from holders of Options or Warrants in connection with a “cashless exercise” thereof;
(iv) sell, lease or otherwise dispose of any of its properties or assets that are material to its business other than Inventory in the ordinary course of business;
(v) enter into amend in any contract material respect or commitment terminate (other than in accordance with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of, $10 million, individually, terms) any Material Contract or enter into contracts or commitments with respect a Contract which, had it been entered into prior to capital expenditures in excess in the aggregate of those provided for in the Plandate hereof, would have been a Material Contract;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase incur any Indebtedness, other than short-term Indebtedness or letters of assets credit incurred in the ordinary course of business and or borrowings under existing credit facilities set forth in Section 3.15 of the Company Disclosure Letter or (B) make any loans or advances to any other Person, other than routine advances to employees consistent with past practice, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except grant or agree to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of grant to any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiariesthe Company Subsidiaries any increase in wages or bonus, or establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonusseverance, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, insurance or other compensation or benefits, or establish any new compensation or benefit plans or arrangements, or amend or agree to amend any existing Employee Benefit Plans, except (A) as may be required under applicable Law, (B) pursuant to the Employee Benefit Plans or collective bargaining agreements of the Company or any of the Company Subsidiaries in effect on the date hereof or (C) pursuant to employment, terminationretention, severance change-of-control or other plan, agreement, trust, fund, policy or arrangement for similar type agreements existing as of the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000date hereof;
(viii) except in the ordinary course of business consistent with past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person or, make any loan or other extension of credit;
(ix) agree to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election not required by Law or settle or compromise any material Tax liability;
(A) waive any rights of substantial value or (B) cancel or forgive any material Indebtedness owed to the Company or any of the Company Subsidiaries, other than Indebtedness of the Company to a wholly owned Subsidiary of the Company or Indebtedness for borrowed money of a wholly owned Subsidiary of the Company to the Company or to another wholly owned Subsidiary of the Company;
(x) except as may be required by any Governmental Entity or under GAAP, make any change in its methods, principles and practices of accounting, including tax liabilityaccounting policies and procedures;
(xi) adopt sell, transfer, assign, license, dispose of, or enter into a plan of complete abandon, or partial liquidationfail to take commercially reasonable steps to maintain or prosecute, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization any Intellectual Property of the Company or any of its material Subsidiaries (other than the Merger)Company Subsidiary or any registration or pending application therefor;
(xii) except incur or commit to any capital expenditures which are not part of the capital expenditure budget of the Company for the 2006 fiscal year in any amount greater than $50,000 in respect of any individual capital expenditure or $150,000 in the ordinary course of business consistent with past practice, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filingsaggregate;
(xiii) except in make any dividend or other distribution to any Equity Holder of any amounts received by or payable to the ordinary course Company pursuant to (i) Sections 3.4 or 3.5 of business consistent with past practicethe Asset Purchase Agreement, enter into any agreementdated as of March 3, understanding or commitment that restrains2006, limits or impedes among Cxxxxxx Wire & Cable Corporation, Bxxxx X. Xxxxxxxx, the Company's or any , CSC and Cxxxxxx and/or (ii) Section 2.4 of its Subsidiaries' ability to compete with or conduct any business or line the Stock Purchase Agreement, dated as of businessMay 5, including2006, but not limited to, geographic limitations on among the Company's or any , River Associates Investments, LLC, Liberty and each of its Subsidiaries' activities;the other parties thereto; or
(xiv) take authorize any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions to not be satisfied;
(xv) in the case of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to voteof, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company that may be acquired commit or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stock; or
(xvi) agree, in writing or otherwise, agree to take any of of, the foregoing actions. The Company agrees to consult at least bi-weekly actions in respect of which it is restricted by the provisions of this Section 5.3.
(or such shorter intervals as Parent may reasonably requestc) with Parent on ongoing operational issues with respect Notwithstanding anything to the business andcontrary contained herein, in any eventthe Company and the Company Subsidiaries shall, shall keep Parent fully informed with respect at or prior to the progress of Closing, cash-out, settle, unwind or otherwise terminate any interest rate swap, cap or collar agreement or similar agreement or arrangement designed to alter the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 risks arising from fluctuations in no more than 48 hours from the time of receiptinterest rates.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Agreement or Schedule 6.3 of the Company's Disclosure Letter 5.2 or otherwise consented to or approved in writing by ParentEMKT (which consent shall not be unreasonably withheld, delayed or conditioned), during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half of and ending on the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereofClosing Date:
(a) The Company shall, and shall cause each of its Subsidiaries to, will conduct their respective operations only according to their ordinary and usual course of business consistent with past practice and will use their reasonable best efforts to preserve intact their respective business organization, keep available the services of their officers and employees and maintain satisfactory relationships with licensorslicensers, suppliers, distributors, clients, joint venture partners clients and others having significant business relationships with them; and;
(b) The Neither the Company shall not, and shall cause each nor any of its Subsidiaries not to:
shall (i) amend make any change in or amendment to its Certificate of Incorporation or its By-Laws (or comparable governing documents);
; (ii) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, sell any shares of its capital stock (other than in connection with the exercise of Company Options outstanding on the date hereof) or any of its other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe to, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock or any of its other securities, or make any other changes in its capital structure;
; (iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside make any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stock;
; (viv) enter into any contract or commitment with respect to capital expenditures with commitment, except for contracts in the ordinary course of business, including without limitation, any acquisition of a value in excess ofmaterial amount of assets or securities, any disposition of a material amount of assets or securities or release or relinquish any material contract rights; (v) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently, or requiring expenditures by otherwise) for the Company and its Subsidiaries in excess of, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate obligations of those provided for in the Plan;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets a Subsidiary in the ordinary course of business and consistent with past practice, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except in the ordinary course of business consistent with past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person or, make any loan or other extension of credit;
(ix) agree to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its material Subsidiaries (other than the Merger);
(xii) except in the ordinary course of business consistent with past practice, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filings;
(xiii) except in the ordinary course of business consistent with past practice, enter into any agreement, understanding or commitment that restrains, limits or impedes the Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xiv) take any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions to not be satisfied;
(xv) in the case of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stock; or
(xvi) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt.
Appears in 1 contract
Samples: Stock Purchase and Contribution Agreement (Emarketplace Inc)
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except as permittedset forth on Section 6.3 of the Disclosure Schedule, or as may be required or specifically contemplated by, or not otherwise described in, prohibited by this Agreement, as set forth on Schedule 6.3 of or required by Law, by a Governmental Entity, or by any Contract to which the Company's Disclosure Letter or otherwise consented to or approved in writing by ParentCompany is a party, during the period commencing on the date hereof until such time as nominees and ending at the earlier of Parent shall comprise more than half (i) the Effective Time and (ii) termination of the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereof8.1:
(a) The the Company shall, shall conduct its business and shall cause each of its Subsidiaries to, conduct their respective operations in all material respects only according to their in the ordinary and usual course of business consistent with past practice and use their reasonable best efforts to preserve intact their respective business organization, keep available the services of their officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners and others having significant business relationships with thempractice; and
(b) The the Company shall notnot effect any of the following without the prior written consent of Parent (such consent not to be unreasonably withheld, and conditioned or delayed); provided, that the consent of Parent shall cause each of its Subsidiaries be deemed to have been given if Parent does not toobject within five (5) Business Days from the date on which request for such consent is received in writing by Parent:
(i) amend its Certificate of Incorporation make any change in or its By-Laws (amendment to the Company Charter Documents in a manner that would reasonably be expected to materially delay or comparable governing documents)impede the Company’s ability to consummate the Merger;
(ii) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securitiesownership interests, as applicable, or issue or sell, or authorize to issue or sell, any securities convertible intointo or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or contract Contract with respect to the issuance or sale of, any shares of its capital stock or any other securitiesownership interests, or make as applicable except for the issuance by the Company of Shares pursuant to the terms of any other changes in its capital structurecurrently outstanding Options;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stockstock or its other securities, as applicable, except for the acquisition of Options from Option Holders in full or partial payment of the exercise price payable by such holder upon exercise of Options;
(viv) enter into any contract or commitment with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate of those provided for in the Plan;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase transfer of assets in the ordinary course of business and consistent with past practice, Presstek Specific Inventory to Presstek or (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except in the ordinary course of business consistent with past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse lease or otherwise as an accommodation become responsible for the obligations dispose of any Person or, make any loan of its material properties or other extension of creditassets;
(ixv) agree to the settlement of amend in any material claim respect or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind terminate any material tax election or settle or compromise any material tax liability;
(xi) adopt Material Contract or enter into a plan of complete or partial liquidationContract which, dissolutionhad it been entered into prior to the date hereof, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its material Subsidiaries (other than the Merger)would have been a Material Contract;
(xiivi) except (A) incur any Indebtedness, other than short-term Indebtedness, letters of credit issued in the ordinary course of business or Intercompany Indebtedness, (B) make any loans or advances to any other Person, other than loans and routine advances to employees consistent with past practice, pay, discharge or satisfy (C) incur any material claims, obligations or liabilities or obligations (absolute, whether accrued, asserted or unassertedabsolute, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained incurred in the Commission Filingsordinary course of business;
(xiiivii) send any written communications (including electronic communications) to the employees of the Company regarding this Agreement or the transactions contemplated hereby;
(viii) make any representations or issue any communications to employees of the Company that are inconsistent with this Agreement or the transactions contemplated thereby, including any representations regarding Parent’s potential offers of employment to the Company’s employees or otherwise;
(ix) grant or agree to grant to any officer of the Company any increase in wages or bonus, severance, profit sharing, retirement, insurance or other compensation or benefits, or establish any new compensation or benefit plans or arrangements, or amend or agree to amend any existing Employee Benefit Plans, except (A) as may be required under applicable Law, (B) pursuant to the Employee Benefit Plans or collective bargaining agreements of the Company in effect on the date hereof, (C) in the ordinary course of business consistent with past practiceor (D) pursuant to employment, retention, change-of-control or similar type agreements existing prior to the date hereof;
(x) make any Tax election not required by Law that is likely to have a continuing material effect on the Company following the Closing Date, or settle or compromise any material Tax liability other than in the ordinary course of business;
(xi) other than in the ordinary course of business (A) waive any rights of substantial value or (B) cancel or forgive any material Indebtedness owed to the Company;
(xii) except as may be required by any Governmental Entity or under GAAP, make any material change in its methods, principles and practices of accounting, including tax accounting policies and procedures;
(xiii) enter into any agreement to purchase or sell any interest in real property, grant any security interest in any real property, enter into any agreementlease, understanding sublease, license or commitment that restrainsother occupancy agreement with respect to any real property or alter, limits amend, modify, violate or impedes the Company's or terminate any of its Subsidiaries' ability to compete with or conduct the terms of any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;Real Property Leases; or
(xiv) take authorize any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions to not be satisfied;
(xv) in the case of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to voteof, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company that may be acquired commit or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stock; or
(xvi) agree, in writing or otherwise, agree to take any of, the foregoing actions in respect of which it is restricted by the provisions of this Section 6.3.
(c) Notwithstanding anything contained in this Agreement to the contrary, Presstek, its Affiliates and the Company shall be permitted to: (i) maintain through the Closing Date the cash management system of Presstek, its Affiliates and the Company; (ii) maintain the cash management procedures as currently conducted by Presstek, its Affiliates and the Company; and (iii) periodically settle intercompany balances consistent with past practices (including through dividends, capital contributions and Intercompany Indebtedness), all such intercompany balances to be settled prior to the Closing in accordance with their terms or otherwise. Presstek or its Affiliates are allowed (x) to withdraw all cash and cash equivalents of the foregoing actions. The Company; and (y) shall contribute all Intercompany Indebtedness to the capital of the Company, immediately prior to the Closing.
(d) Except for those Contracts delivered by Presstek or the Company agrees pursuant to consult at least bi-weekly Section 2.9(b), each Contract between Presstek (or one of Presstek’s other Subsidiaries) and the Company shall automatically be terminated effective as of the Closing without any further action on the part of Presstek (or such shorter intervals other Subsidiary, as the case may be), the Company, Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in or any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipttheir respective Affiliates.
Appears in 1 contract
Samples: Merger Agreement (Presstek Inc /De/)
Conduct of the Business of the Company Pending the Closing Date. The (a) Sellers shall cause the Company agrees that, except not to take any actions outside the ordinary course of business that would affect Closing Working Capital from the amount thereof as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, of 12:01 A.M. on the Closing Date to the time of the Closing.
(b) Except as (x) set forth on Schedule 6.3 Section 6.4(b) of the Company's Company Disclosure Letter Letter, (y) may be required by this Agreement or otherwise consented (z) required by any Law, any Governmental Entity or any Contract to or approved in writing by Parentwhich the Company is a party, during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half of the members of the Board of Directors of Pre-Closing Period, the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereofshall:
(ai) The Company shall, and shall cause each of conduct its Subsidiaries to, conduct their respective operations only according to their in the ordinary and usual course of business consistent with past practice practice;
(ii) comply in all material respects with all applicable Law and the requirements of all Contracts;
(iii) use their commercially reasonable best efforts to maintain and preserve intact their respective its business organization, keep available the services of their its officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners clients and others having significant business relationships with themthe Company, in each case, such that its goodwill and ongoing business shall be unimpaired at the Closing; and
(biv) The use commercially reasonable efforts to keep in full force and effect all material Policies maintained by the Company, other than changes to such policies made in the ordinary course of business.
(c) Except as (x) set forth on Section 6.4(c) of the Company Disclosure Letter, (y) may be required by this Agreement or (z) required by any Law, any Governmental Entity or any Contract to which the Company is a party, during the Pre-Closing Period, the Company shall notnot take any of the following actions without the prior written consent of Buyer (which consent shall not be unreasonably withheld, and shall cause each of its Subsidiaries not to:conditioned or delayed):
(i) amend its Certificate other than in the ordinary course of Incorporation business consistent with past practice, declare, set aside or its By-Laws (pay any dividend or comparable governing documents)other distribution with respect to the capital stock of the Company, or any direct or indirect redemption, purchase or other acquisition by the Company of any such capital stock or any option with respect to the Company;
(ii) except make any change in, or amendment to, the Company’s or any of its Subsidiaries’ Organizational Documents;
(Aiii) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, grant, or authorize to issue any issuance or sellsale of, pledge or otherwise encumber any shares of its capital stock or any other securitiesownership interests, as applicable, or issue or sell, or authorize to issue any issuance or sellsale of, any securities convertible intointo or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or contract Contract with respect to the issuance or sale of, any shares of its capital stock or any other securitiesownership interests, or make any other changes in its capital structure;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facilityas applicable;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stockstock or its other securities, as applicable;
(v) enter into any contract or commitment with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate of those provided for in the Plan;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets in the ordinary course of business and consistent with past practice, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except in the ordinary course of business consistent with past practice, transferacquire, leaseassign, license, guaranteetransfer, sell, mortgage, pledge, dispose of, encumber or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse lease or otherwise as an accommodation become responsible for the obligations dispose of any Person or, make any loan of its properties or other extension assets that are material to the business of creditthe Company;
(ixvi) agree to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its material Subsidiaries (other than the Merger);
(xii) except in the ordinary course of business consistent with past practice, payamend, discharge terminate or satisfy enter into any material claimsContract that provides for aggregate annual payments by or to the Company in excess of $100,000; provided, liabilities however, that the Company may renegotiate the terms of, or obligations otherwise extend, any Material Contract that has expired in accordance with its terms prior to the date hereof or is scheduled to expire in accordance with its terms within six (absolute, accrued, asserted 6) months after the date hereof;
(vii) (A) incur or unasserted, contingent or otherwise)guarantee any Indebtedness, other than the payment, discharge short-term Indebtedness or satisfaction letters of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained credit incurred in the Commission Filingsordinary course of business or (B) make any loans or advances to any other Person, other than loans and advances to employees or intercompany loans, in each case, consistent with past practice;
(xiiiviii) cancel or discharge, or waive any right of the Company with respect to, any material Indebtedness;
(ix) mortgage, pledge or subject to any material Lien any of the Company’s properties or assets, except for Permitted Liens and Liens incurred in the ordinary course of business consistent with past practice;
(x) (A) increase the compensation or fringe benefits of any present or former director, enter into any agreementofficer, understanding employee or commitment that restrains, limits or impedes consultant of the Company's Company or any of its Subsidiaries' ability , (B) grant any new right to compete with severance or conduct termination pay to any business present or line former director, officer, employee or consultant of business, including, but not limited to, geographic limitations on the Company's Company or any of its Subsidiaries' activities, (C) loan or advance any money or other property to any present or former director, officer, employee or consultant of the Company or any of its Subsidiaries, (D) establish, adopt, enter into, amend or terminate any Company Plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Plan if it were in existence as of the date of this Agreement, (E) grant any equity or equity-based awards or (F) hire, promote or change the classification or status in respect of any employee, consultant or individual;
(xi) change any material annual Tax accounting period, adopt or change any material method of Tax accounting, make or change any material Tax election, enter into any Tax closing agreement, prepare any Tax Returns in a manner inconsistent with the Company’s or any such Subsidiary’s past practice (including tax positions claimed therein), file a Tax Return in new jurisdictions, surrender any right to claim a refund of Taxes, request or obtain any Tax ruling, file any income or other material Tax Return, or settle any Tax claim, audit or assessment in excess of $100,000, incur any material Liability for Taxes outside the ordinary course of business or fail to pay any material Tax that becomes due and payable (including any estimated Taxes);
(xii) except as may be required under GAAP, make any change in its methods, principles and practices of financial accounting;
(xiii) adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization, merger, consolidation or other reorganization;
(xiv) take settle any action, engage legal proceedings other than a settlement agreement providing solely for the payment of monetary damages in any transaction an amount not to exceed $100,000 individually or enter into any agreement which would cause any of $250,000 in the Tender Offer Conditions to not be satisfiedaggregate;
(xv) make or agree to make any capital expenditure, except in the case ordinary course of business and in an amount for capital expenditures that do not exceed $100,000 in the aggregate for the Company taken as a whole during any consecutive three month period;
(xvi) directly or indirectly acquire any interest in any corporation, association, joint venture, partnership, limited liability company or other business entity or division thereof;
(xvii) make any investment (by contribution to capital, property transfers, purchase of securities or otherwise) in, or loan or advance (other than travel and similar advances to its employees in the ordinary course of business) to, any Person other than in the ordinary course of business;
(xviii) (A) enter into, terminate or amend any Material Contract, or make any proposal to enter into, terminate, or amend any Material Contract, or, other than in the ordinary course of business, any other Contract that is material to the Company, (B) enter into any Contract that would be breached by, or require the consent of any third party in order to continue in full force and effect following consummation of the Company onlyTransactions, or (C) release any Person from, or modify or waive any provision of, any confidentiality, standstill or similar agreement or fail to take all action necessary to enforce each such confidentiality, standstill and similar agreement (in each case, other than any action includingsuch agreement with Buyer);
(xix) sell, without limitationassign, the adoption transfer, convey, license, sublicense, covenant not to assert, abandon, allow to lapse, lease or otherwise dispose of any shareholder rights plan or amendments to its Certificate Company Intellectual Property, other than in the ordinary course of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights business and receive the benefits of a stockholder other than with respect toto any Intellectual Property that, securities in the good faith belief of the Company that may be acquired Company, is useless or controlled by Parent or Sub or permit any stockholder to acquire securities obsolete;
(xx) make an “investment” (as defined in subsection 212.3(1)(10) of the Company on ITA) in a basis not available to Parent or Sub in “foreign affiliate” (for purposes of section 212.3 of the event that Parent or Sub were to acquire any shares ITA) of its capital stockthe Company; or
(xvixxi) authorize, commit or agree to take, any of the foregoing actions to the extent restricted by the provisions of this Section 6.4(c) or take any action or agree, in writing or otherwise, to take any action which would (A) cause any of the foregoing actions. The Company agrees to consult at least bi-weekly (representations or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 warranties of the Company Disclosure Letter. Each set forth in this Agreement to be untrue in any material respect or (B) in any material respect impede or delay the ability of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative satisfy any of the Parent conditions to the Transactions set forth in this Agreement.
(d) Nothing contained in this Agreement shall use be construed to give to Buyer, directly or indirectly, rights to control or direct the Company’s operations prior to the Closing. Prior to the Closing, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision of its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receiptoperations.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter Agreement or otherwise consented to or approved in writing by ParentParent (which consent or approval shall not be unreasonably withheld or delayed), during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half of the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereofEffective Time:
(a) The Company shall, and shall cause each of its Subsidiaries to, shall conduct their respective operations in all material respects only according to their ordinary and usual course of business consistent with past practice and shall use their reasonable best efforts to preserve intact their respective business organizationorganizations, keep available the services of their officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners and others having significant business relationships with them; and;
(b) The Except as set forth in Section 7.3(b) of the Company shall notDisclosure Schedule or as expressly contemplated by this Agreement, and shall cause each neither the Company nor any of its Subsidiaries not toshall:
(i1) amend its make any change in or amendment to the Company's Certificate of Incorporation or its By-Laws (or comparable governing documents)Laws;
(ii2) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock or any other securities, or make any other changes in its capital structure, other than (i) the issuance of Company Common Stock upon the exercise of Stock Options outstanding on the date hereof, in accordance with their present terms, or (iii) issuances by a wholly owned Subsidiary of the Company of capital stock to such Subsidiary's parent, the Company or another wholly owned Subsidiary of the Company;
(iii3) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stockstock or its other securities, other than dividends payable by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(v4) enter into incur any contract or commitment with respect to capital expenditures with a value or any obligations or liabilities in excess ofrespect thereof, or requiring expenditures except for those (A) contemplated by the capital expenditure budget for the Company and its Subsidiaries in excess ofmade available to Parent, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess (B) incurred in the aggregate ordinary course of those provided for business of the Company and its Subsidiaries and set forth in Schedule 7.3(b) of the Company Disclosure Schedule (the "CAPITAL BUDGET") or (C) not otherwise described in clauses (A) and (B) which, in the Planaggregate, do not exceed U.S.$1.0 million;
(vi5) acquire, acquire or agree to acquire (A) by merging or consolidating with, or by purchasing an equity interest in or a substantial portion of the assets of, or by any other manner, any material business or any Personcorporation, partnership, joint venture, association or otherwise acquire other business organization of division thereof (including any assets of the Company's Subsidiaries) or (B) any Person assets, including real estate, except (x) purchases of inventory, equipment, other than (A) the purchase of non-material assets in the ordinary course of business and consistent with past practice, practice or (By) intercompany transactions and (C) acquisitions which in expenditures consistent with the aggregate do not exceed $10 million)Company's Capital Budget;
(vii6) except in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), past practice and except to the extent required under existing employee and director benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulationAgreement, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay not currently required to be paid under existing severance plans or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or establishhire or agree to hire, or enter into any employment agreement with, any new or additional key employee or officer having an annual salary of U.S.$150,000 or more;
(7) except as required to comply with applicable law or expressly provided in this Agreement, (A) adopt, enter into orinto, terminate or amend any Company Benefit Plan or other arrangement for the current or future benefit or welfare of any director, officer or current or former employee, except in connection to the extent necessary to coordinate any such Company Benefit Plans with the merger terms of various plans which will this Agreement, (B) pay any benefit not materially increase provided for under any Company Benefit Plan, accelerate the benefits payable thereunderpayment, amend right of payment or terminate vesting of any collective bargainingbonus, bonusseverance, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employmentstock option, termination, severance insurance or other compensation or benefits, (C) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement or Company Benefit Plan (including the grant of stock options, stock appreciation rights, stock based or stock related awards, performance units or restricted stock, or the removal of existing restrictions in any Company Benefit Plans or agreements or awards made thereunder) or (D) except as required by the current terms thereof take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, trust, fund, policy contract or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000Benefit Plan;
(viii) except in the ordinary course of business consistent with past practice, 8) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lienLien, any material assets assets, other than in the ordinary course of business;
(9) except as required by applicable law or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person orGAAP, make any loan or other extension change in its methods of creditaccounting;
(ix) agree to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election or settle or compromise any material tax liability;
(xi10) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its material Subsidiaries (other than the Merger)) or any agreement relating to a Takeover Proposal, except as provided for in Section 7.6;
(xii11) (i) incur or assume any long-term debt, or except in the ordinary course of business, incur or assume any short-term indebtedness in amounts not consistent with past practice; (ii) incur or modify any material indebtedness or other liability; (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except in the ordinary course of business and consistent with past practice; (iv) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of the Company, or by such Subsidiaries to the Company, or customary loans or advances to employees in accordance with past practice); (v) settle any claims in excess of U.S.$1 million other than in the ordinary course of business, in accordance with past practice, and without admission of liability; or (vi) enter into any material commitment or transaction in excess of U.S.$1 million except in the ordinary course of business;
(12) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of any such claims, liabilities or obligations, in the ordinary course of business and consistent with past practice, or of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in of the Commission FilingsCompany and its consolidated Subsidiaries;
(xiii13) except in the ordinary course of business consistent with past practice, enter into any agreement, understanding or commitment that materially restrains, limits or impedes the Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xiv14) take plan, announce, implement or effect any actionmaterial reduction in labor force, engage in any transaction lay-off, early retirement program, severance program or enter into any agreement which would cause any other program or effort concerning the termination of employment of employees of the Tender Offer Conditions to Company or its Subsidiaries; PROVIDED, HOWEVER, that routine employee terminations for cause shall not be satisfiedconsidered subject to this clause (14);
(xv15) in the case of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder shareholder with respect to, securities of the Company that may be acquired or controlled by Parent or Sub Purchaser or permit any stockholder shareholder to acquire securities of the Company on a basis not available to Parent or Sub Purchaser in the event that Parent or Sub Purchaser were to acquire any additional shares of the Company Common Stock (subject to the Company's right to take action specifically permitted by Section 7.6);
(16) materially modify, amend or terminate any material contract to which it is a party or waive or assign any of its capital stockmaterial rights or claims except in the ordinary course of business consistent with past practice;
(17) other than in the ordinary course of business consistent with past practice, make any tax election or enter into any settlement or compromise of any tax liability that in either case is material to the business of the Company and its Subsidiaries as a whole; or
(xvi18) agree, in writing or otherwise, to take any of the foregoing actions. .
(c) The Company agrees shall not, and shall not permit any of its Subsidiaries to, take any voluntary action that would result in (i) any of its representations and warranties set forth in this Agreement that are qualified as to consult at least bi-weekly materiality becoming untrue, (ii) any of such representations and warranties that are not so qualified becoming untrue in any material manner having a Company Material Adverse Effect or such shorter intervals as Parent may reasonably request(iii) with Parent on ongoing operational issues with respect any of the conditions to the business andOffer set forth in subsections (a), in any event(c), shall keep Parent fully informed with respect (d) and (e) of Annex I not being satisfied (subject to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree Company's right to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"take action specifically permitted by Section 7.6). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt.
Appears in 1 contract
Samples: Merger Agreement (Endosonics Corp)
Conduct of the Business of the Company Pending the Closing Date. (a) The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter or otherwise consented to or approved in writing by Parent, that during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half of and ending on the members of Expiration Date, the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereof:
(a) The Company shall, and shall cause each of its Subsidiaries to, conduct their its respective operations only according to their in the ordinary and usual course of business consistent with past practice and to use their commercially reasonable best efforts to preserve intact their respective business organizationorganizations, keep available the services of their officers and employees Employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners clients and others having significant business relationships with them; and.
(b) The In furtherance and not in limitation of Section 5.3(a), the Company agrees that during the period commencing on the date hereof and ending on the Expiration Date, the Company shall not, and shall cause each of its Subsidiaries not to:, effect any of the following except (i) as specifically contemplated by this Agreement, or (ii) with the prior written consent of Parent (which shall not be unreasonably withheld):
(i) amend or restate any of its Certificate of Incorporation Organizational Documents or its By-Laws (or comparable governing documents)form any Subsidiary;
(ii) except authorize for issuance, issue, sell or deliver (A) any capital stock of, or other equity or voting interest in, the Company or any of its Subsidiaries, other than issuance of shares of Capital Stock of the Company upon the exercise of Company Stock Options outstanding on the date hereof in accordance with the existing terms of such outstanding Company Stock Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe toexchangeable for, or enter into evidencing the right to subscribe for or acquire any arrangement (1) shares of capital stock of, or contract with respect other equity or voting interest in, the Company or any of its Subsidiaries, (2) securities convertible into, exchangeable for, or evidencing the right to the issuance subscribe for or sale ofacquire, any shares of its the capital stock of, or other equity or voting interest in, the Company or any other securitiesof its Subsidiaries including rights, warrants or options, or make any other changes in its capital structure(3) phantom stock or similar equity based payment option;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend or make any distribution (other than dividends on the Series A Preferred Stock or Series B Preferred Stock whether in accordance with the terms of their respective Certificates of Designation) cash, stock or other distribution or payment property) with respect to, or split, combine, redeem or redeem, reclassify, or purchase or otherwise acquireacquire directly, or indirectly, any shares of its capital stock;
(v) enter into any contract or commitment with respect to capital expenditures with a value in excess stock of, or requiring expenditures by the Company and its Subsidiaries in excess ofother equity or voting interest in, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate of those provided for in the Plan;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets in the ordinary course of business and consistent with past practice, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or make any other change in the capital structure of the Company or any of its Subsidiaries;
(iv) establish, adopt, enter into orinto, except in connection with the merger of various plans which will not materially increase the benefits payable thereunderfund or accelerate payment under, amend or terminate any collective bargainingBenefit Plan;
(v) establish, bonusadopt, profit sharingenter into, thriftfund or accelerate payment under, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance amend or other plan, terminate any agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employeesEmployees; PROVIDED, HOWEVER, other than in the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on ordinary course of business and after January 1, 1999, the Company shall consistent with past practice in respect of Employees who are not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000officers or Designated Employees;
(viiiA) hire any new Employee or terminate the employment of any Employee, except in the ordinary course of business consistent with past practice; (B) hire any new Employee for a position which replaces any officer or Designated Employee; or (C) terminate the employment of any officer or Designated Employee;
(vii) pay or enter into any agreement, or otherwise promise, to pay any bonus, retention or special remuneration to any current or former Employee or increase the compensation payable (including wages, salaries, bonuses, benefits or any other remuneration) or to become payable to any current or former Employee, but other than as required under Contracts existing as of the date hereof;
(viii) accelerate, amend or change the period of exercisability or vesting of any Company Stock Option (except as required under Contracts existing as of the date hereof or unless determined within the scope of this Agreement or the Merger) or authorize any cash payment in exchange for a Company Stock Option or other equity award of the Company;
(ix) enter into, materially amend, become subject to, violate, terminate or otherwise modify or waive any of the material terms of any Material Contract or any Company Leases, except for entering into Contracts for the sale of the Company Products in the ordinary course of business, consistent with past practice with a value per contract that does not exceed $50,000;
(x) mortgage, pledge or encumber any assets or otherwise permit any of its properties or assets to be subject to any Lien;
(xi) (i) dispose of, license or transfer to any Person any rights to Company Intellectual Property other than pursuant to non exclusive licenses of binary code in connection with the sale of the Company Products in the ordinary course of business, consistent with past licensing practice, (ii) abandon, permit to lapse or otherwise dispose of any Company Intellectual Property, or (iii) make any material change in any Company Intellectual Property;
(xii) sell, transfer, lease, license, guarantee, sell, mortgage, pledge, license or otherwise dispose of, encumber or subject to any lien, of any material assets or incur or modify any indebtedness or other material liabilityproperties, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible except for the obligations sale of any Person or, make any loan or other extension of creditCompany Products in the ordinary course and consistent with past practice;
(ixxiii) agree acquire any business, line of business or Person by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any Contract, letter of intent or similar arrangement (whether or not enforceable) with respect to the settlement foregoing;
(xiv) enter into or amend any agreements pursuant to which any other Person is granted exclusive rights of any material claim type or litigation except for settlements which have been specifically reserved for scope with respect to any Company Products;
(xv) make any capital expenditure or commitment therefor or enter into any operating lease in excess of $10,000 individually and $20,000 in the aggregate or otherwise deviate from the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described short-term budget/forecast attached in Section 6.3(b)(ix5.3(xv) of to the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000Schedule;
(xxvi) (A) take any action reasonably likely to (i) accelerate the payment of customer accounts receivables (including shortening payment terms, providing incentives for early payment or otherwise) or (ii) delay the payment on accounts payable to suppliers, vendors or others beyond due dates; (B) make or rescind any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization changes to the cash management policies of the Company or any of its Subsidiaries, or (C) vary any inventory purchasing practices in any material Subsidiaries (other than the Merger)respect from past practices;
(xiixvii) terminate or waive any right of the Company or any Company Subsidiary of material value;
(xviii) except as required by GAAP, make any change in any method of accounting or auditing method, principle, policy, procedure or practice;
(xix) make any material Tax election or settle and/or compromise any material Tax liability; prepare any Returns in an inappropriate manner; incur any material liability for Taxes, other than in the ordinary course of business consistent business, or file an amended Return or a claim for refund of Taxes with past practicerespect to the income, pay, discharge operations or satisfy any material claims, liabilities property of the Company or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)its Subsidiaries, other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filings;
(xiii) except in the ordinary course of business consistent with past practicebusiness;
(xx) incur, enter into repay, assume, guarantee or modify any agreementCompany Indebtedness;
(xxi) make any loans, understanding advances or commitment that restrainscapital contributions to, limits or impedes investments in, any other Person other than loans, advances or capital contributions by the Company's Company or any of its Subsidiaries' ability Subsidiaries to compete with any direct or conduct any business or line indirect wholly owned Subsidiary of business, including, but not limited to, geographic limitations on the Company's ;
(xxii) initiate or settle any litigation;
(xxiii) agree to take (i) any of the actions described in Sections 5.3(b)(i) through (xxii) above, or (ii) any other action that would prevent the Company from performing, or cause the Company not to perform, any of its Subsidiaries' activities;
(xiv) take any action, engage in any transaction covenants and agreements under this Agreement or enter into any agreement which would cause under any of the Tender Offer Conditions to not be satisfied;
(xv) in the case of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stock; or
(xvi) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receiptAncillary Agreements.
Appears in 1 contract
Samples: Merger Agreement (Attunity LTD)
Conduct of the Business of the Company Pending the Closing Date. (a) The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter or otherwise consented to or approved in writing by Parent, that during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half and ending on the earlier of the members termination of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereof:
(a) The or the Effective Time, the Company shall, and shall cause each of its Subsidiaries to, conduct its respective operations (including their respective operations working capital, capital expenditure, accounts receivable and accounts payable practices and cash management practices) only according to their in the ordinary and usual course of business consistent with past practice and to use their its commercially reasonable best efforts to preserve intact their respective business organizationorganizations, keep available the services of their officers and employees and maintain satisfactory relationships with licensors, suppliers, vendors, distributors, clients, joint venture partners clients and others having significant business relationships with them; and.
(b) The In furtherance and not in limitation of Section 5.3(a), the Company agrees that during the period commencing on the date hereof and ending on the earlier of the termination of this Agreement or the Effective Time, the Company shall not, and shall cause each of its Subsidiaries not to:, effect any of the following without the prior written consent of Parent (which consent shall not, in the cases of clauses (b)(xv) and (xxix) be unreasonably withheld):
(i) amend or restate its Certificate certificate of Incorporation incorporation or its Byby-Laws (laws or comparable governing documents)other equivalent charter documents or create or form any Subsidiary;
(ii) except in each case for issuances of Company Capital Stock upon conversion or exercise of any Company Preferred Stock, Company Restricted Stock or Company Options, and except for the granting of the Agreed RSU Awards, authorize for issuance, issue, sell or deliver (A) upon any capital stock of, or other equity or voting interest in, the exercise Company or any of Options, Common Stock Purchase Warrants its Subsidiaries or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe toexchangeable for, or enter into evidencing the right to subscribe for or acquire any arrangement (1) shares of capital stock of, or contract with respect other equity or voting interest in, the Company or any of its Subsidiaries, (2) securities convertible into, exchangeable for, or evidencing the right to the issuance subscribe for or sale ofacquire, any shares of its the capital stock of, or other equity or voting interest in, the Company or any other securitiesof its Subsidiaries including rights, warrants or options, or make any other changes in its capital structure(3) phantom stock or similar equity-based payment option;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend or make any distribution (other than dividends on the Series A Preferred Stock or Series B Preferred Stock whether in accordance with the terms of their respective Certificates of Designation) cash, stock or other distribution or payment property) with respect to, or split, combine, redeem or redeem, reclassify, or purchase or otherwise acquireacquire directly, or indirectly, any shares of its capital stock;
(v) enter into any contract or commitment with respect to capital expenditures with a value in excess stock of, or requiring expenditures by the Company and its Subsidiaries in excess ofother equity or voting interest in, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate of those provided for in the Plan;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets in the ordinary course of business and consistent with past practice, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or Subsidiaries (other than in connection with the repurchase of Company Restricted Stock upon the triggering of any applicable forfeiture condition in accordance with the applicable award agreement in existence on the date hereof);
(iv) establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunderor accelerate payment under, amend or terminate any Employee Benefit Plan or any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance compensation or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVERother than (A) as expressly contemplated by this Agreement or (B) as required by Law;
(v) hire any new employee or consultant, or terminate the Company may employment, other than for cause, of any Key Employee or officer-level employee;
(vi) pay or enter into agreements any agreement or promise to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1pay (or amend, 1999remove or change any limitations on, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost or conditions to the payment of) any bonus, retention or incentive compensation to any current or former employee, consultant or director or otherwise increase (or amend, remove or change any limitations on, or conditions to the payment of) any compensation payable (including wages, salaries, bonuses, benefits or any other remuneration) or to become payable to any current or former officer, director, employee or agent;
(vii) accelerate, amend or change the period of exercisability or vesting of any Company Option or Company Restricted Stock or authorize any cash payment in exchange for a Company Option, Company Restricted Stock or other equity award of all such agreements shall not exceed $1,000,000the Company;
(viii) materially amend, violate, terminate or otherwise modify or waive any of the material terms of any Material Contract or any Company Leases;
(ix) (A) amend the terms and conditions of the Global Sales Compensation Plan, amended June 1, 2011, other than to extend the termination date thereof by not more than six (6) months, (B) amend the terms and conditions of any individual sales compensation plan, (C) amend the Company policy document on the recognition of orders, revenue and payments dated May 2, 2007, (D) provide any special or additional incentive to enter into multi-year renewals other than the incentives existing as of October 13, 2011, (E) increase (or take any action intended to increase) multi-year renewals other beyond the average level of multi-year bookings in 2009 and 2010, or (F) approve or agree to any customer discounts not in the ordinary course of business consistent with the Company's standard discount practices.
(x) mortgage, pledge or encumber any assets or otherwise permit any of its properties or assets to be subject to any Lien (other than Permitted Liens);
(xi) (i) dispose of, license or transfer to any Person any rights to Company Intellectual Property other than pursuant to non-exclusive licenses of binary code in connection with the sale of the Products in the ordinary course of business, consistent with past licensing practice, (ii) abandon, permit to lapse or otherwise dispose of any Company Intellectual Property, or (iii) make any material change in any Company Intellectual Property;
(xii) sell, transfer, lease, license or otherwise dispose of any assets or properties except for (A) sales of inventory in the ordinary course of business consistent with past practice and (B) leases or licenses entered into in the ordinary course of business consistent with past practice with annual lease or royalty payments to the Company or any of its Subsidiaries that are not reasonably expected to exceed Fifty Thousand Dollars ($50,000);
(xiii) acquire any business, line of business or Person by merger or consolidation, purchase of substantial assets or equity interests, or by any other manner, in a single transaction or a series of related transactions, or enter into any Contract, letter of intent or similar arrangement (whether or not enforceable) with respect to the foregoing;
(xiv) enter into or amend any agreements pursuant to which any other Person is granted joint or exclusive rights of any type or scope with respect to any Products or services of the Company;
(xv) make any capital expenditure or commitment therefor or enter into any operating lease in excess of Twenty-Five Thousand Dollars ($25,000) individually or Fifty Thousand Dollars ($50,000) in the aggregate or otherwise acquire any assets or properties (other than inventory in the ordinary course of business consistent with practice) or enter into any Contract, letter of intent or similar arrangement (whether or not enforceable) with respect to the foregoing;
(xvi) (A) take any action reasonably likely to (i) accelerate the payment of accounts receivables (including shortening payment terms, providing incentives for early payment or otherwise) or (ii) delay the payment on accounts payable (other than those that are being contested in good faith by appropriate means or procedures) to suppliers, vendors, any Governmental Authority or others; or (B) make any changes to the cash management policies of the Company or any of its Subsidiaries;
(xvii) establish or close any bank account other than the establishment or closing of a bank account that is required or customary in connection with the settlement of a foreign exchange transaction;
(xviii) write off as uncollectible any notes or accounts receivable, except write offs in the ordinary course of business consistent with past practice charged to applicable reserves;
(xix) except as required by GAAP, make any change in any method of accounting or auditing method, principle, policy, procedure or practice;
(xx) make any Tax election or settle and/or compromise any Tax liability (other than the Company Sales Tax Liability, which is the subject of (xxi) below); prepare any Returns in a manner which is inconsistent with the past practices of the Company or any of its Subsidiaries, as applicable, with respect to the treatment of items on such Returns; incur any liability for Taxes other than in the ordinary course of business or pursuant to the transactions contemplated by this Agreement, or file an amended Return or a claim for refund of Taxes with respect to the income, operations or property of the Company or its Subsidiaries;
(xxi) settle and/or compromise any Company Sales Tax Liability in any Specified State in excess of the amount set forth in Exhibit F-2;
(xxii) fail to pay, discharge, settle or satisfy any claims, actions, Liabilities or obligations, other than those that (A) are not past due, (B) are immaterial in amount, individually and in the aggregate, or (C) are being contested in good faith by appropriate means or procedures;
(xxiii) incur, repay, assume, guarantee or modify any Indebtedness, guarantee any such Indebtedness, issue or sell any debt securities or guarantee any debt securities of others;
(xxiv) make any loans, advances or capital contributions to, or investments in, any other Person other than (A) loans, advances or capital contributions by the Company or any of its Subsidiaries to any direct or indirect wholly owned Subsidiary of the Company or (B) travel and entertainment advances to the employees of the Company and any of its Subsidiaries extended in the ordinary course of business consistent with past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person or, make any loan or other extension of credit;
(ixxxv) agree to the settlement of initiate or settle any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000litigation;
(xxxvi) file a petition in bankruptcy, make an assignment for the benefit of creditors, or rescind any material tax election file a petition seeking reorganization or settle arrangement or compromise any material tax liabilityother action under U.S. federal or state bankruptcy laws;
(xixxvii) adopt fail to keep in full force and effect the Company’s and any of its Subsidiaries’ current insurance policies or enter into a plan reduce the amount of complete any insurance coverage provided by existing insurance policies;
(xxviii) plan, announce, implement or partial liquidationeffect any reduction in force, dissolutionlayoff, mergerearly retirement program, consolidation, restructuring, recapitalization severance program or other reorganization program or effort concerning the termination of employment of employees of the Company or any of its material Subsidiaries (other than the Mergerroutine employee terminations for cause);
(xiixxix) except in the ordinary course of business consistent with past practice, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filings;
(xiii) except in the ordinary course of business consistent with past practice, enter into any agreementContract which, understanding if entered into prior to the date hereof would be required to be set forth in Section 3.14(a) of the Company Disclosure Schedule or commit or agree (whether or not such Contract, commitment or agreement is legally binding) to do any of the foregoing; provided that restrainsif the Company reasonably believes, limits upon advice of counsel, that obtaining consent of Parent to entry into such Contract may violate Antitrust Laws, then such consent shall not be required; or
(xxx) agree in writing or impedes otherwise to take (i) any of the Company's actions described in Sections 5.3(b)(i) through (xxix) above, or (ii) any other action that would prevent the Company from performing, or cause the Company not to perform, any of its Subsidiaries' ability to compete with covenants and agreements under this Agreement or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xiv) take any action, engage in any transaction or enter into any agreement which would cause under any of the Tender Offer Conditions Ancillary Agreements to not be satisfied;which it is a party.
(xvc) in Without limiting the case foregoing, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, the Company onlywill notify Parent in writing not less than five (5) Business Days prior to making any material modification to any Product, take any action the Company’s website design or graphical user interface (including, without limitation, aspects of its design, such as colors, shapes, layout and typefaces, and the adoption behavior of its dynamic elements, such as buttons, boxes, and menus) or (iii) making any shareholder rights plan or amendments modifications to (x) the terms of use and terms of service applicable to its Certificate of Incorporation members, web site visitors or By-Laws other parties or (or comparable governing documents), which would, directly or indirectly, restrict or impair y) the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stock; or
(xvi) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receiptCompany’s privacy policies.
Appears in 1 contract
Samples: Sale and Purchase of Shares Agreement (Nice Systems LTD)
Conduct of the Business of the Company Pending the Closing Date. The Except as set forth in the corresponding subsections of Section 5.2(b) of the Company Disclosure Letter, the Company agrees that, except as permitted, expressly permitted or required by this Agreement or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Schedule 6.3 with the prior written consent of the Company's Disclosure Letter or otherwise consented to or approved in writing by Parent, during the period commencing on the date hereof until such time as nominees and ending at the earlier of Parent shall comprise more than half (x) the Effective Time and (y) termination of the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereof7.1:
(a) The the Company shall, and shall cause each of its Subsidiaries to, shall conduct their respective operations only according to their ordinary and usual course of business consistent with past practice and shall use their commercially reasonable best efforts to preserve intact their respective business organization, keep available the services of their officers and employees and who are employed by the Company on the date hereof, maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners customers and others having significant business relationships with them; and, maintain their Intellectual Property, and preserve and keep confidential their trade secrets;
(b) The neither the Company shall not, and shall cause each nor any of its Subsidiaries not toshall:
(i) amend make any change in or amendment to its Certificate of Incorporation or its By-Laws laws (or comparable governing documents);
(ii) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible intointo or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock or any other securities, or make any other changes in its capital structure;
(iii) sell sell, pledge or pledge dispose of or agree to sell sell, pledge or pledge dispose of any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit FacilityPerson;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stockstock or its other securities;
(v) enter into any contract or commitment with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of, $10 million50,000, individually, or enter into contracts or commitments with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of, $50,000, in the aggregate of those provided for in the Planaggregate;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets in the ordinary course of business and consistent with past practice, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except to the extent required under existing employee and director benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulationand set forth in Section 5.2(b)(vii) of the Company Disclosure Letter, increase materially the compensation or fringe benefits of any of its directors, officers or employees employees, or grant any severance or termination pay not currently required to be paid as part of the COC Incentive Payments, or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or, except to comply with this Agreement, applicable law or Section 280G of the Code, establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, or amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except in the ordinary course of business consistent with past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lienLien (other than a Lien permitted hereby) or otherwise encumber any assets, any material assets or incur or modify any indebtedness Indebtedness or other material liability, other than in the ordinary course of business consistent with past practice, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person or, or make any loan or other extension of credit;
(ix) other than in the ordinary course of business, enter into any agreement for the acquisition by or license to the Company or any of Subsidiaries of any software or technology of any third-party;
(x) except with regard to any customer account receivable settled in the ordinary course of business (but in no event in excess of $20,000), agree to the settlement of or waive any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election or settle or compromise any material tax liabilitylitigation;
(xi) except as required by applicable law or GAAP, make any change in its method of accounting;
(xii) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its material Subsidiaries (other than the Merger);
(xiixiii) except (x) incur, assume or prepay any Indebtedness or guarantee any such Indebtedness of another Person, other than intercompany indebtedness or guarantees of intercompany indebtedness among the Company and any direct or indirect wholly-owned Subsidiary of the Company, or (y) make any loans, extensions of credit or advances to any other Person, other than to the Company or to any direct or indirect wholly-owned Subsidiary of the Company;
(xiv) other than pursuant to arrangements in effect on the ordinary course date hereof and as set forth in Section 5.2(b)(xiv) of business consistent with past practicethe Company Disclosure Letter, accelerate the payment, right to payment or vesting of any bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits;
(xv) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filings;
(xiiixvi) except in the ordinary course enter into, materially modify, amend or terminate any Material Contract or waive any of business consistent with past practice, its material rights or claims;
(xvii) enter into any agreement, understanding agreement or commitment arrangement that restrains, materially limits or impedes otherwise restricts the Company's or , any of its Subsidiaries' ability to compete with , or conduct any successor thereto, or that would, after the Effective Time, limit or restrict the Surviving Corporation and its affiliates (including Parent) or any successor thereto, from engaging or competing in any line of business or line in any geographic area; or
(xviii) other than pursuant to arrangements set forth in Section 5.2(b)(xviii) of businessthe Company Disclosure Letter, includingplan, but not limited toannounce, geographic limitations on implement or effect any reduction in force, lay-off, early retirement program, severance program or other program or effort concerning the Company's termination of employment of employees of the Company or any of its Subsidiaries' activities;
(xivxix) take any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions representations or warranties set forth in Article 3 that are subject to, or qualified by, a “Material Adverse Effect,” “material adverse change” or other materiality qualification to be untrue as of the Effective Time, or any such representations and warranties that are not so qualified to be satisfieduntrue in any material respect;
(xvxx) other than pursuant to arrangements set forth in the case Section 5.2(b)(xx) of the Company onlyDisclosure Letter, purchase or acquire, or offer to purchase or acquire, any shares of Company Stock;
(xxi) take any action includingaction, without limitation, including the adoption of any shareholder stockholder-rights plan or amendments to its Certificate of Incorporation or By-Laws laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, vote or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, to securities of the Company that may be acquired or controlled by Parent or Sub Sub, or which would permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of Company Stock;
(xxii) (v) file or cause to be filed any amended Returns or claims for refund of Taxes, (w) prepare any Return in a manner which is inconsistent with the past practices of the Company or a Subsidiary, as the case may be, with respect to the treatment of items on such Returns; (x) make any Tax election in a manner which is inconsistent with the past practices of the Company or a Subsidiary; (y) incur any liability for Taxes other than in the ordinary course of business or as required by this Agreement; (z) enter into any settlement or closing agreement with a taxing authority;
(xxiii) fail to maintain with financially responsible insurance companies insurance on its capital stocktangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; or
(xvixxiv) agree, in writing or otherwise, or commit to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as (A) set forth on Schedule 6.3 of the Company's Disclosure Letter 5.3, (B) may be required by this Agreement, (C) required by Law or otherwise by a Governmental Entity, (D) as consented to or approved in writing by Parent (such consent not to be unreasonably withheld, conditioned or delayed; provided, that the consent of Parent shall be deemed to have been given if Parent does not object within five (5) Business Days from the date on which a request for such consent is provided by the Company to Parent), during the period commencing on the date hereof until such time as nominees and ending at the earlier of Parent shall comprise more than half (x) the Closing and (y) termination of the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereof7.1:
(a) The the Company shall, and shall cause each of its the Company Subsidiaries to, use commercially reasonable efforts to conduct their respective operations only according to their businesses in the ordinary and usual course of business consistent with past practice and use their reasonable best efforts to preserve intact their respective business organization, keep available the services of their officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners and others having significant business relationships with them; andin all material respects;
(b) The the Company shall not, and shall cause each of its the Company Subsidiaries not to, effect any of the following:
(i) amend make any change in or amendment to its Certificate of Incorporation or its By-Laws (or comparable governing documents)Charter Documents, as applicable;
(ii) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock Shares, or any other securitiesownership interests, as applicable, or issue or sell, or authorize to issue or sell, any securities convertible intointo or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or contract Contract with respect to the issuance or sale of, any shares of its Shares, capital stock or any other securitiesownership interests, or make any other changes in its capital structureas applicable;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares Shares or any other ownership interests, as applicable;
(iv) other than in the ordinary course of business, (A) sell, lease or otherwise dispose of any of its capital stockproperties or assets (including all Company Intellectual Property) that are material to its business or (B) acquire any business of any Person or all or substantially all of the assets of any Person;
(v) other than in the ordinary course of business, amend in any material respect or terminate any Material Contract or enter into any contract or commitment with respect a Contract which, had it been entered into prior to capital expenditures with the date hereof, would have been a value in excess Material Contract; provided, however, that the Company and the Company Subsidiaries may renegotiate the terms of, or requiring expenditures by otherwise extend, any Material Contract that has expired in accordance with its terms prior to the Company and date hereof or is scheduled to expire in accordance with its Subsidiaries in excess of, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess in terms within six (6) months after the aggregate of those provided for in the Plandate hereof;
(vi) acquireother than in the ordinary course of business, by merging enter into any arrangement, agreement or consolidating with, by purchasing an equity interest in or a portion transaction with (i) any Affiliate of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person Company (other than another member of the Group), (ii) the Key Stockholder or any Affiliate of the Key Stockholder (other than another member of the Group), and (iii) any Company Related Party;
(vii) other than Indebtedness that will be repaid in full at or prior to the Closing, (A) incur any material funded Indebtedness, other than (i) Indebtedness that will be repaid at Closing, (ii) short-term Indebtedness or letters of credit incurred in the purchase ordinary course of assets business or (iii) borrowings under existing credit facilities or (B) make any loans or advances to any other Person, other than loans and advances to employees made in the ordinary course of business;
(viii) grant or agree to grant to any officer or employee of the Company or any Company Subsidiary any material increase in wages or bonus, severance, profit sharing, retirement, insurance or other compensation or benefits, or establish any new compensation or employee benefit plans or arrangements, or amend or agree to amend any existing Employee Benefit Plans (except to the extent that such amendment would not result in more than a de minimis increase to the cost to the Company under such arrangement or plan), except (A) as may be required by applicable Law (B) pursuant to any Employee Benefit Plan in effect on the date hereof, (C) for merit-based increases in compensation in the ordinary course of business and consistent with past practicepractices during the Company’s annual review period or in connection with a promotion, (B) intercompany transactions and (C) acquisitions which it being understood that any such increases in guaranteed payments shall not be greater than 20% individually or 3% in the aggregate do not exceed $10 million)aggregate, or (D) as otherwise provided for in this Agreement;
(viiix) except other than in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs business, (including its management incentives and sales compensation plans), and except to the extent A) make any material Tax election not required under benefit plans, agreements, collective bargaining agreements or their arrangements as in by Law that would have a continuing effect on the date Company following the Closing Date, (B) adopt a new method of accounting (whether or not such method is impermissible) for Tax purposes or (C) settle or compromise any material Tax liability imposed on the Company;
(x) other than in the ordinary course of business, (A) waive any rights of substantial value or (B) cancel or forgive any material Indebtedness owed to the Company or any Company Subsidiary, other than Indebtedness of the Company owed to a Company Subsidiaries or Indebtedness for borrowed money of a Company Subsidiaries to the Company or to another Company Subsidiary;
(xi) except as may be required by any Governmental Entity or under GAAP, make any material change in its methods, principles and practices of accounting; or
(xii) authorize any of, or commit or agree to take any of, the foregoing actions in respect of which it is restricted by the provisions of this Section 5.3.
(c) Notwithstanding anything contained in this Agreement to the contrary, the Company and the Company Subsidiaries shall be permitted to maintain through the Closing Date the cash management systems of the Company and the Company Subsidiaries, maintain the cash management procedures as currently conducted by the Company and the Company Subsidiaries, and periodically settle intercompany balances consistent with past practices (including through dividends and capital contributions and all such intercompany balances shall be settled at the Closing in accordance with their terms). The Company and the Company Subsidiaries are allowed to dividend or applicable lawdistribute any and all Cash and Cash Equivalents of the Company and the Company Subsidiaries to the Key Stockholder at any time prior to the delivery of the Closing Estimate Statement.
(d) Notwithstanding anything contained in this Agreement to the contrary, rule or regulation, increase materially neither the compensation or fringe benefits of Company nor any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee the Company Subsidiaries shall be deemed to have operated outside the ordinary course of business because the Company or any of its Subsidiaries, or establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements Subsidiaries were responding to provide salary continuation benefits for six months any of the following an employee's termination without cause in good faith and such actions shall not be deemed to be a breach of Section 5.3(a) or Section 5.3(b) in response to any of the following (so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements action or such refraining from action is done in a manner materially consistent with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except how a similarly situated company in the ordinary course of business consistent with same industry acting reasonably could reasonably be expected to act or refrain from acting under similar circumstances and reasonably informed by the past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person or, make any loan or other extension of credit;
(ix) agree to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) practice of the Company Disclosure Letter may only be settled for amounts and the Company Subsidiaries (taken as a whole)): (i) changes or proposed changes in excess Laws or Orders or interpretations thereof or changes in GAAP or other accounting requirements or principles; (ii) the negotiation, execution, announcement or performance of this Agreement or the transactions contemplated hereby or any communication by Parent, Merger Sub or any of their respective Affiliates of its plans or intentions (including in respect of employees) with respect to any of the amounts reserved therefor businesses of the Company and the Company Subsidiaries, including (A) losses or threatened losses of, or any adverse change in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amountsrelationship, when aggregated contractual or otherwise, with all other settlements after the date hereof employees, do not exceed $2,000,000;
(x) make customers, suppliers, distributors, financing sources, joint venture partners, licensors, licensees or rescind any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of others having relationships with the Company or any Company Subsidiary and (B) the initiation of its material Subsidiaries (litigation or other than the Merger);
(xii) except in the ordinary course of business consistent administrative proceedings by any Person with past practice, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filings;
(xiii) except in the ordinary course of business consistent with past practice, enter into any agreement, understanding or commitment that restrains, limits or impedes the Company's respect to this Agreement or any of the transactions contemplated hereby; (iii) the consummation of the transactions contemplated by this Agreement or any actions by PLC, Parent, Merger Sub, the Company or any Company Subsidiary taken pursuant to this Agreement; (iv) conduct by the Company or any Company Subsidiary (A) prohibited under Section 5.3 for which Parent gave its Subsidiaries' ability prior written consent or (B) in order to compete comply with its obligations under Section 5.3; (v) any natural disaster or conduct any business acts of terrorism, cyberterrorism, sabotage, military action, armed hostilities, war (whether or line not declared), epidemic, pandemic or disease outbreak or the response of businessany Governmental Entity thereto, in each case whether or not occurring or commenced before or after the date of this Agreement; (vi) (A) proposing, negotiating, committing to or effecting, by consent decree, hold separate order or otherwise, the sale, transfer, divestiture, license or disposition of operations, divisions, businesses, product lines, customers or assets arising from Parent’s or Merger Sub’s compliance with its obligations under Section 5.5, (B) otherwise taking or committing to take actions that limit or could limit Parent’s or its Affiliates’ (including, but not limited toafter the Closing, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xiv) take any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions to not be satisfied;
(xv) in the case of ’s and the Company only, take any Subsidiaries’) freedom of action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities or their ability to retain, one or more of their respective operations, divisions, businesses, product lines, customers or assets arising solely from Parent’s or Merger Sub’s compliance with its obligations under Section 5.5, or (C) the application of applicable Laws (including any action or judgment arising under applicable Laws) to the transactions contemplated by this Agreement; or (ix) any failure, in and of itself, by the Company or any Company Subsidiary to meet any internal projections or forecasts (as distinguished from any Event giving rise or contributing to such failure), provided that may be acquired or controlled by Parent or Sub or permit prior to taking any stockholder to acquire securities of such action the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stock; or
(xvi) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its commercially reasonable efforts efforts, to respond to written requests for waivers of the covenants under this Section 6.3 extent practicable, notify and discuss in no more than 48 hours from the time of receiptgood faith with Parent their intended action(s).
Appears in 1 contract
Samples: Merger Agreement (Endava PLC)
Conduct of the Business of the Company Pending the Closing Date. The (a) Sellers and the Company agrees agree that, except as permitted(i) set forth in Section 6.3(a) of the Sellers Disclosure Letter, (ii) may be required by or specifically contemplated by, or as otherwise described in, set forth in this Agreement, as set forth on Schedule 6.3 or (iii) required by Law, by a Governmental Entity, or by any Contract to which the Company or any of the Company's Disclosure Letter or otherwise consented to or approved in writing by ParentCompany Subsidiaries is a party, during the period commencing on the date hereof until such time as nominees and ending on the earlier of Parent shall comprise more than half (A) the Closing and (B) the termination of the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereof:
(a) The 8.1 the Company shall, shall and shall cause each of its the Company Subsidiaries to, to conduct their respective operations in all material respects only according to their ordinary and usual course in the Ordinary Course of business Business consistent with past practice and use their reasonable best efforts to preserve intact their respective business organization, keep available the services of their officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners and others having significant business relationships with thempractice; and
(bi) The the Company shall not, not and shall cause each of its the Company Subsidiaries not to:to effect any of the following without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed; provided, that the consent of Purchaser shall be deemed to have been given if Purchaser does not object within three (3) Business Days from the date on which request for such consent is provided by Sellers to Purchaser)):
(iA) amend make any change in or amendment to its Certificate certificate of Incorporation incorporation or its Byby-Laws (laws or comparable governing other equivalent charter documents), as applicable, in a manner that would delay or impede the Company’s ability to consummate the transactions contemplated by this Agreement;
(ii) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securitiesownership interests, as applicable, or issue or sell, or authorize to issue or sell, any securities convertible intointo or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or contract Contract with respect to the issuance or sale of, any shares of its capital stock or any other securitiesownership interests, or make any other changes in its capital structureas applicable;
(iiiC) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stockstock or its other securities, as applicable;
(vD) enter into any contract or commitment with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess other than in the aggregate Ordinary Course of those provided for in the Plan;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets in the ordinary course of business and Business consistent with past practice, sell, lease or otherwise dispose of any of its Assets other than Parcels and in no event over $100,000 without Purchasers consent that shall not be unreasonably delayed or withheld; provided that the restrictions set forth in this Section 6.3(a)(i) shall not apply to any sales of Inventory made after seven (B7) intercompany transactions calendar days from the date hereof.
(E) sell, lease or otherwise dispose of, or enter into any Contract or arrangement for the sale, lease or other disposition of, any Parcel and will not buy or acquire any legal or beneficial interest in any real property and not occupy, lease, manage or control or agree to occupy, lease, manage or control any facility or property;
(CF) acquisitions which in grant or perfect, or permit the aggregate do not exceed $10 milliongranting, attachment or perfection of, any Lien on any Parcel (other than Permitted Liens);
(viiG) except create any Lien other than Permitted Liens;
(H) other than in the ordinary course Ordinary Course of business Business consistent with past practice, amend in any material respect or terminate any Material Contract or enter into a Contract which, had it been entered into prior to the Plan including without limitation date hereof, would have been a Material Contract; provided, however, that the implementation Company and the Company Subsidiaries may renegotiate the terms of, or otherwise extend, any Material Contract that has expired in accordance with its terms prior to the date hereof or is scheduled to expire in accordance with its terms within six (6) months after the date hereof with, to the extent legally permissible, Purchaser’s consent not to be unreasonably withheld or delayed;
(I) incur any Indebtedness, other than letters of credit incurred in the Ordinary Course of Business or borrowings under existing credit facilities set forth in Section 4.15 of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans)Sellers Disclosure Letter, and except to the extent required under benefit plansthat they are deemed Indebtedness for purposes of Working Capital, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement make any loans or applicable law, rule advances to any other Person;
(J) grant or regulation, increase materially the compensation or fringe benefits of agree to grant to any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiariesthe Company Subsidiaries any increase in wages or bonus, or establishcontract extension, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonusseverance, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance insurance or other plancompensation or benefits, agreementor establish any new compensation or benefit plans or arrangements, trustor amend or agree to amend any existing employee benefit plans, fundexcept (w) as may be required under applicable Law, policy (x) pursuant to the employee benefit plans or arrangement for the benefit collective bargaining agreements of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, or any of the Company shall not be permitted to enter into such agreements with more than 25 employees and Subsidiaries in effect on the aggregate maximum potential cost to date hereof, or (y) in the Company Ordinary Course of all such agreements shall not exceed $1,000,000Business;
(viiiK) except in the ordinary course of business consistent with past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person or, make any loan or other extension of credit;
(ix) agree to the settlement of any material claim or litigation except for settlements which tax election not required by Law that could have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of a continuing effect on the Company Disclosure Letter may only be settled for amounts in excess of following the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement AmountsClosing Date, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election or settle or compromise any material tax liabilityTax liability other than in the Ordinary Course of Business; unless it has received Purchaser’s prior written consent, not to be unreasonably withheld or delayed;
(xiL) adopt (x) waive any rights of substantial value or enter into a plan of complete (y) cancel or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of forgive any material Indebtedness owed to the Company or any of the Company Subsidiaries, other than Indebtedness of the Company owed to a Subsidiary of the Company or Indebtedness for borrowed money of a Company Subsidiary owed to the Company or to another Company Subsidiary;
(M) except as may be required by any Governmental Entity or under GAAP make any material change in its material Subsidiaries methods, principles and practices of accounting, including tax accounting policies and procedures;
(N) authorize any of, or commit or agree to take any of, the foregoing actions in respect of which it is restricted by the provisions of this Section 6.3;
(O) buy or acquire any legal or beneficial interest or title in any real property, or occupy, lease, mortgage or control (other than the Merger);
(xii) except in the ordinary course of business consistent with past practice, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwiseParcels), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filings;
(xiii) except in the ordinary course of business consistent with past practice, enter into any agreement, understanding or commitment that restrains, limits or impedes the Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xiv) take any action, engage in any transaction or enter into any new agreement which would cause to occupy, lease, mortgage or control, any of the Tender Offer Conditions to not be satisfied;
(xv) in the case of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan real property or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stockfacility; or
(xviP) agree, terminate any lease identified in writing or otherwise, to take any Section 4.17(a) of the foregoing actionsSellers Disclosure Letter, or enter into any new lease, amendment, renewal, extension or other modification of any such lease.
(b) Notwithstanding anything contained in this Agreement to the contrary, the Company and the Company Subsidiaries shall be permitted to maintain through the Closing Date the cash management systems and procedures of the Company and the Company Subsidiaries as currently conducted by the Company and the Company Subsidiaries, and periodically settle intercompany balances in the Ordinary Course of Business consistent with past practices (including through dividends and capital contributions and all such intercompany balances shall be settled at the Closing in accordance with their terms). The Company agrees and the Company Subsidiaries are allowed to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 dividend all Cash and Cash Equivalents of the Company Disclosure Letter. Each and the Company Subsidiaries to Sellers immediately prior to Closing.
(c) From the date hereof until Closing, the Company and the Company Subsidiaries shall comply in all material respects with the obligations of and the prohibitions on the Company and the Company Subsidiaries under Sections 7.1(d)(vi) through (ix) and 7.3(b), (c), (d) and (g) of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt2008 Purchase Agreement.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Globe Specialty Metals Inc)
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as (A) set forth on Schedule 6.3 5.3, (B) expressly required by this Agreement, or (C) required by Law, by a Governmental Entity, or by any Contract to which the Company or any of the Company's Disclosure Letter or otherwise consented to or approved in writing by ParentCompany Subsidiaries is a party, during the period commencing on the date hereof until such time as nominees and ending at the earlier of Parent shall comprise more than half (x) the Effective Time and (y) termination of the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereof8.1:
(a) The the Company shall, shall and shall cause each of its the Company Subsidiaries to, to (i) conduct their respective operations in all material respects only according to their in the ordinary and usual course of business consistent with past practice and (ii) use their its commercially reasonable best efforts to preserve substantially intact their respective the business organization, keep available organization of the services Company and the Company Subsidiaries and to preserve substantially intact the current relationships of their officers the Company and employees and maintain satisfactory relationships the Company Subsidiaries with licensors, suppliers, distributors, clients, joint venture partners and others having significant any persons with which the Company or any Company Subsidiary has material business relationships with themrelations; and
(b) The the Company shall not, not and shall cause each Company Subsidiary not to effect any of its Subsidiaries the following without the prior written consent of Parent (such consent not to:to be unreasonably withheld, conditioned or delayed; provided, that the consent of Parent shall be deemed to have been given if Parent does not object within three (3) Business Days from the date on which request for such consent is provided by the Company to Parent):
(i) amend make any change in or amendment to its Certificate certificate of Incorporation incorporation or its Byby-Laws laws, certificate of formation or limited liability company agreement (or comparable governing documents), as applicable;
(ii) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securitiesownership interests, as applicable, or issue or sell, or authorize to issue or sell, any securities convertible intointo or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or contract Contract with respect to the issuance or sale of, any shares of its capital stock or any other securitiesownership interests, or make as applicable, except for (1) the issuance by the Company of shares of common stock of the Company pursuant to the terms of any other changes Options outstanding on the date hereof and (2) the issuance by the Company of shares of common stock of the Company pursuant to the Certificate of Incorporation in its capital structurethe Conversion;
(iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stockstock or its other securities, as applicable, except for (x) the acquisition of Options from holders of Options in full or partial payment of the exercise price payable by such holder upon exercise of Options, (y) the Conversion or (z) the acquisition of any capital stock or other equity interests in connection with the Minority Interest Acquisition;
(iv) acquire (including by purchase, merger, consolidation, or acquisition of stock or assets or any other business combination) any corporation, partnership or other business organization (or any division or business thereof);
(v) enter into any contract or commitment with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate of those provided for in the Plan;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets in the ordinary course of business and consistent with past practice, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except in the ordinary course of business consistent with past practice, sell, transfer, abandon or otherwise dispose of or lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse license or otherwise as an accommodation become responsible for the obligations encumber (other than Permitted Liens) any of any Person orits properties, make any loan rights or other extension of credit;
(ix) agree assets that are material to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its material Subsidiaries (other than the Merger)Company Subsidiaries, taken as a whole;
(xiivi) except other than in the ordinary course of business consistent with past practice, pay, discharge or satisfy amend in any material claimsrespect or terminate or fail to renew any Material Contract or waive, liabilities release or obligations assign any material rights or claims thereunder or enter into a Contract which, had it been entered into prior to the date hereof, would have been a Material Contract;
(absolutevii) authorize, accruedor make any commitment with respect to, asserted capital expenditures that, individually or unassertedtaken together, contingent or otherwise)exceed by 10% the aggregate amount of the annual capital expenditures budget of the Company and Company Subsidiaries, taken as a whole;
(viii) (A) incur any material Indebtedness, other than short-term Indebtedness or letters of credit incurred in the payment, discharge ordinary course of business or satisfaction of claims, liabilities or obligations reflected or reserved against inborrowings under existing credit facilities, or contemplated by(B) make any loans, the consolidated financial statements advances, investments or capital contributions to any other Person, other than (or the notes thereto1) contained loans and advances to employees in the Commission Filingsordinary course of business consistent with past practice and (2) among the Company and Company Subsidiaries;
(xiiiix) grant or agree to grant to Company Personnel any material increase in wages or bonus, severance, retention, change in control, profit sharing, retirement, insurance or other compensation or benefits, or establish, adopt or enter into any new compensation or employee benefit plans or arrangements (including any Employee Benefit Plan), or terminate, amend or modify or agree to terminate, amend or modify any existing Employee Benefit Plans (including to accelerate the time of payment or vesting, or to trigger any payment or funding), except (A) as may be required under applicable Law, (B) pursuant to the Employee Benefit Plans in effect on the date hereof or (C) in the ordinary course of business consistent with past practice;
(x) establish, enter into into, adopt or amend any collective bargaining agreement or similar labor agreement;
(xi) make, understanding modify or commitment revoke any material Tax election, or change any material Tax accounting method (not required by Law to be changed), that restrainscould be reasonably expected to materially increase the Tax liability of the Company or any Company Subsidiary in a Post-Closing Tax Period, limits or impedes settle or compromise any material Tax Liability;
(xii) pay, discharge or settle (A) any Action other than payments, discharges and settlements involving not more than $100,000 in the Company's aggregate (net of insurance proceeds) and that do not require any material actions or impose any material restrictions on the business or operations of the Company and Company Subsidiaries, taken as a whole, or (B) any Action involving any Equityholder;
(xiii) other than in the ordinary course of business consistent with past practices, (A) waive any rights of substantial value or (B) redeem, purchase, prepay, defease, cancel or forgive any Indebtedness owed to the Company or any of the Company Subsidiaries, other than Indebtedness of the Company to a Company Subsidiary or Indebtedness for borrowed money of a Company Subsidiary to the Company to another Company Subsidiary and as required in accordance with its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activitiesterms;
(xiv) take except as may be required by any actionGovernmental Entity or Law or under GAAP, engage make any material change in any transaction or enter into any agreement which would cause any its methods, principles and practices of the Tender Offer Conditions to not be satisfied;financial accounting; or
(xv) authorize any of, or commit or agree to take any of, the foregoing actions in respect of which it is restricted by the case provisions of this Section 5.3. Notwithstanding anything contained in this Agreement to the contrary, the Company and the Company Subsidiaries shall be permitted to maintain through the Closing Date the cash management systems of the Company onlyand the Company Subsidiaries, take any action includingmaintain the cash management procedures as currently conducted by the Company and the Company Subsidiaries, without limitation, and periodically settle intercompany balances consistent with past practices (including through dividends and capital contributions among the adoption of any shareholder rights plan or amendments Company and the Company Subsidiaries and all such intercompany balances shall be settled at the Closing in accordance with their terms). The Company and the Company Subsidiaries are allowed to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights dividend all Cash and receive the benefits of a stockholder with respect to, securities Cash Equivalents of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities of and the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stock; or
(xvi) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect Subsidiaries to the business and, in any event, shall keep Parent fully informed with respect Equityholders immediately prior to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receiptClosing.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter Agreement or otherwise consented to or approved in writing by ParentEMKT, during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half of and ending on the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereofClosing Date:
(a) The Company shall, and shall cause each of its Subsidiaries to, will conduct their respective operations only according to their ordinary and usual course of business consistent with past practice and will use their reasonable best efforts to preserve intact their respective business organization, keep available the services of their officers and employees and maintain satisfactory relationships with licensorslicensers, suppliers, distributors, clients, joint venture partners clients and others having significant business relationships with them; and;
(b) The Neither the Company shall not, and shall cause each nor any of its Subsidiaries not to:
shall (i) amend make any change in or amendment to its Certificate Articles of Incorporation or its By-Laws (or comparable governing documents);
; (ii) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, sell any shares of its capital stock (other than in connection with the exercise of Company Options outstanding on the date hereof) or any of its other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe to, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock or any of its other securities, or make any other changes in its capital structure;
; (iii) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside make any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stock;
; (viv) enter into any contract or commitment with respect to capital expenditures with commitment, except for contracts in the ordinary course of business, including without limitation, any acquisition of a value in excess ofmaterial amount of assets or securities, any disposition of a material amount of assets or securities or release or relinquish any material contract rights; (v) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently, or requiring expenditures by otherwise) for the Company and its Subsidiaries in excess of, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess in the aggregate obligations of those provided for in the Plan;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets a Subsidiary in the ordinary course of business and consistent with past practice; (vi) incur, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except assume or prepay any indebtedness or other material liabilities other than in the ordinary course of business and consistent with the Plan including without limitation the implementation past practices; (vii) make any loans, advances or capital contributions to, or investments in, any other Person, other than to Subsidiaries; (viii) authorize capital expenditures in excess of the Company's job structures and broad bonding program and its various variable compensation programs amount currently budgeted therefor; (including its management incentives and sales compensation plans), and except to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of ix) permit any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of insurance policy naming the Company or any Subsidiary as a beneficiary or a loss payee to be cancelled or terminated other than in the ordinary course of its Subsidiariesbusiness; (x) amend any employee or nonemployee benefit plan or program, employment agreement, license agreement or retirement agreement, or establish, adopt, enter into orpay any bonus or contingent compensation, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except each case in the ordinary course of business consistent with past practicepractice prior to the date of this Agreement; (xi) agree, transferin writing or otherwise, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber to take any of the foregoing actions; or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person or, make any loan or other extension of credit;
(ixxii) agree to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000litigation;
(xc) make or rescind any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan of complete or partial liquidationThe Company shall not, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or and shall not permit any of its material Subsidiaries to (other than the Merger);
(xii) except in the ordinary course of business consistent with past practice, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filings;
(xiii) except in the ordinary course of business consistent with past practice, enter into any agreement, understanding or commitment that restrains, limits or impedes the Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xivi) take any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions representations or warranties set forth in Article III to not be satisfied;
untrue as of the Closing Date, or (xvii) in the case purchase or acquire, or offer to purchase or acquire, any shares of capital stock of the Company only, take and the Company shall not sell or pledge or agree to sell or pledge any action including, without limitation, stock owned by it in any of the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or By-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to voteSubsidiaries, or otherwise allow any Subsidiary to exercise pledge or agree to sell or pledge any stock owned by it in any other Subsidiary.
(d) The Company will use its commercially reasonable best efforts to deliver to EMKT prior to the rights and receive the benefits of Closing a stockholder with respect to, securities consolidated balance sheet as of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities end of the Company fiscal year ended July 31, 1999 and the related consolidated statements of operations, stockholders' equity and cash flows for the fiscal year then ended, prepared in accordance with GAAP and on a basis not available to Parent or Sub in the event consistent with that Parent or Sub were to acquire any shares of its capital stock; or
(xvi) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees statements delivered pursuant to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt3.5.
Appears in 1 contract
Samples: Stock Purchase and Contribution Agreement (Emarketplace Inc)
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except as permitted, expressly permitted or required by this Agreement or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Schedule 6.3 with the prior written consent of the Company's Disclosure Letter or otherwise consented to or approved in writing by Parent, during the period commencing on the date hereof until such time as nominees and ending at the earlier of Parent shall comprise more than half (x) the Effective Time and (y) termination of the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereof7.1:
(a) The the Company shall, and shall cause each of its Subsidiaries to, shall conduct their respective operations only according to their ordinary and usual course of business consistent with past practice and shall use their commercially reasonable best efforts to preserve intact their respective business organization, keep available the services of their officers and employees and who are employed by the Company on the date hereof, maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners customers and others having significant business relationships with them; and, maintain their Intellectual Property, and preserve and keep confidential their trade secrets;
(b) The neither the Company shall not, and shall cause each nor any of its Subsidiaries not toshall:
(i) amend make any change in or amendment to its Certificate of Incorporation or its By-Laws laws (or comparable governing documents);
(ii) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible intointo or exchangeable for, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock or any other securities, or make any other changes in its capital structure;
(iii) sell sell, pledge or pledge dispose of or agree to sell sell, pledge or pledge dispose of any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit FacilityPerson;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stockstock or its other securities;
(v) enter into any contract or commitment with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of, $10 million50,000, individually, or enter into contracts or commitments with respect to capital expenditures with a value in excess of, or requiring expenditures by the Company and its Subsidiaries in excess of, $50,000, in the aggregate of those provided for in the Planaggregate;
(vi) acquire, by merging or consolidating with, by purchasing an equity interest in or a portion of the assets of, or by any other manner, any material business or any Person, or otherwise acquire any assets of any Person (other than (A) the purchase of assets in the ordinary course of business and consistent with past practice, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs (including its management incentives and sales compensation plans), and except to the extent required under existing employee and director benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulationand set forth on Schedule 5.2(b)(vii), increase materially the compensation or fringe benefits of any of its directors, officers or employees employees, or grant any severance or termination pay not currently required to be paid under existing severance plans, or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or, except to comply with applicable law or Section 280G of the Code, establish, adopt, enter into or, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, or amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except in the ordinary course of business consistent with past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lienLien (other than a Lien permitted hereby) or otherwise encumber any assets, any material assets or incur or modify any indebtedness Indebtedness or other material liability, other than in the ordinary course of business consistent with past practice, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person or, or make any loan or other extension of credit;
(ix) enter into any agreement for the acquisition by or license to the Company or any of Subsidiaries of any software or technology of any third party;
(x) agree to the settlement of or waive any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election or settle or compromise any material tax liabilitylitigation;
(xi) except as required by applicable law or GAAP, make any change in its method of accounting;
(xii) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its material Subsidiaries (other than the Merger);
(xiixiii) except (x) incur, assume or prepay any Indebtedness or guarantee any such Indebtedness of another Person, other than intercompany indebtedness or guarantees of intercompany indebtedness among the Company and any direct or indirect wholly-owned Subsidiary of the Company, or (y) make any loans, extensions of credit or advances to any other Person, other than to the Company or to any direct or indirect wholly-owned Subsidiary of the Company;
(xiv) other than pursuant to arrangements in effect on the ordinary course date hereof and as set forth on Schedule 5.2(b)(xiv), accelerate the payment, right to payment or vesting of business consistent with past practiceany bonus, severance, profit sharing, retirement, deferred compensation, stock option, insurance or other compensation or benefits;
(xv) pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filings;
(xiiixvi) except in the ordinary course enter into, materially modify, amend or terminate any Material Contract or waive any of business consistent with past practice, its material rights or claims;
(xvii) enter into any agreement, understanding agreement or commitment arrangement that restrains, materially limits or impedes otherwise restricts the Company's or , any of its Subsidiaries' ability to compete with , or conduct any successor thereto, or that would, after the Effective Time, limit or restrict the Surviving Corporation and its affiliates (including Parent) or any successor thereto, from engaging or competing in any line of business or line in any geographic area; or
(xviii) other than pursuant to arrangements set forth on Schedule 5.2(b)(xviii), plan, announce, implement or effect any reduction in force, lay-off, early retirement program, severance program or other program or effort concerning the termination of business, including, but not limited to, geographic limitations on employment of employees of the Company's Company or any of its Subsidiaries' activities;
(xivxix) take any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions representations or warranties set forth in Article 3 that are subject to, or qualified by, a “Material Adverse Effect,” “material adverse change” or other materiality qualification to be untrue as of the Effective Time, or any such representations and warranties that are not so qualified to be satisfieduntrue in any material respect;
(xvxx) in the case other than pursuant to arrangements set forth on Schedule 5.2(b)(xx), purchase or acquire, or offer to purchase or acquire, any shares of the Company only, Stock;
(xxi) take any action includingaction, without limitation, including the adoption of any shareholder stockholder-rights plan or amendments to its Certificate of Incorporation or By-Laws laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, vote or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, to securities of the Company that may be acquired or controlled by Parent or Sub Sub, or which would permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of Company Stock;
(xxii) (v) file or cause to be filed any amended Returns or claims for refund of Taxes, (w) prepare any Return in a manner which is inconsistent with the past practices of the Company or a Subsidiary, as the case may be, with respect to the treatment of items on such Returns; (x) make any Tax election; (y) incur any liability for Taxes other than in the ordinary course of business; (z) enter into any settlement or closing agreement with a taxing authority;
(xxiii) fail to maintain with financially responsible insurance companies insurance on its capital stocktangible assets and its businesses in such amounts and against such risks and losses as are consistent with past practice; or
(xvixxiv) agree, in writing or otherwise, or commit to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt.
Appears in 1 contract
Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as set forth on Schedule 6.3 of the Company's Disclosure Letter Agreement or otherwise consented to or approved in writing by ParentParent (which consent or approval shall not be unreasonably withheld or delayed), during the period commencing on the date hereof until such time as nominees of Parent shall comprise more than half of the members of the Board of Directors of the Company or this Agreement shall have been terminated pursuant to Section 9.1 hereofEffective Time:
(a) The Company shall, and shall cause each of its Subsidiaries to, shall conduct their respective operations in all material respects only according to their ordinary and usual course of business consistent with past practice and shall use their reasonable best efforts to preserve intact their 42 47 respective business organizationorganizations, keep available the services of their officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients, joint venture partners and others having significant business relationships with them; and;
(b) The Except as set forth in Section 7.3(b) of the Company shall notDisclosure Schedule or as expressly contemplated by this Agreement, and shall cause each neither the Company nor any of its Subsidiaries not toshall:
(i1) amend its make any change in or amendment to the Company's Certificate of Incorporation or its By-Laws (or comparable governing documents)Laws;
(ii2) except (A) upon the exercise of Options, Common Stock Purchase Warrants or the Microsoft Warrant, (B) upon the conversion of the Series A Preferred Stock or Series B Preferred Stock and (C) pursuant to the terms of the Ancillary Consideration Agreement, dated as of March 17, 1998, by and between the Company and Olivetti, issue or sell, or authorize to issue or sell, any shares of its capital stock or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible into, or options, warrants or rights to purchase or subscribe tofor, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock or any other securities, or make any other changes in its capital structure, other than (i) the issuance of Company Common Stock upon the exercise of Stock Options outstanding on the date hereof, in accordance with their present terms, or (iii) issuances by a wholly owned Subsidiary of the Company of capital stock to such Subsidiary's parent, the Company or another wholly owned Subsidiary of the Company;
(iii3) sell or pledge or agree to sell or pledge any stock or other equity interest owned by it in any other Person except to the extent required to be pledged to the collateral agent under the Credit Facility;
(iv) except in the case of the Company's wholly-owned Subsidiaries, in the ordinary course of business consistent with past practice, declare, pay or set aside any dividend (other than dividends on the Series A Preferred Stock or Series B Preferred Stock in accordance with the terms of their respective Certificates of Designation) or other distribution or payment with respect to, or split, combine, redeem or reclassify, or purchase or otherwise acquire, any shares of its capital stockstock or its other securities, other than dividends payable by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company;
(v4) enter into incur any contract or commitment with respect to capital expenditures with a value or any obligations or liabilities in excess ofrespect thereof, or requiring expenditures except for those (A) contemplated by the capital expenditure budget for the Company and its Subsidiaries in excess ofmade available to Parent, $10 million, individually, or enter into contracts or commitments with respect to capital expenditures in excess (B) incurred in the aggregate ordinary course of those provided for business of the Company and its Subsidiaries and set forth in Schedule 7.3(b) of the Company Disclosure Schedule (the "CAPITAL BUDGET") or (C) not otherwise described in clauses (A) and (B) which, in the Planaggregate, do not exceed U.S.$1.0 million;
(vi5) acquire, acquire or agree to acquire (A) by merging or consolidating with, or by purchasing an equity interest in or a substantial portion of the assets of, or by any other manner, any material business or any Personcorporation, partnership, joint venture, association or otherwise acquire other business organization of division thereof (including any assets of any Person (other than (A) the purchase of assets in the ordinary course of business and consistent with past practice, (B) intercompany transactions and (C) acquisitions which in the aggregate do not exceed $10 million);
(vii) except in the ordinary course of business consistent with the Plan including without limitation the implementation of the Company's job structures and broad bonding program and its various variable compensation programs Subsidiaries) or (B) any assets, including its management incentives and sales compensation plans), and except to the extent required under benefit plans, agreements, collective bargaining agreements or their arrangements as in effect on the date of this Agreement or applicable law, rule or regulation, increase materially the compensation or fringe benefits of any of its directors, officers or employees or grant any severance or termination pay or enter into any employment, consulting or severance agreement or arrangement with any present or former director, officer or other employee of the Company or any of its Subsidiaries, or establish, adopt, enter into orreal estate, except in connection with the merger of various plans which will not materially increase the benefits payable thereunder, amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any directors, officers or employees; PROVIDED, HOWEVER, the Company may enter into agreements to provide salary continuation benefits for six months following an employee's termination without cause so long as on and after January 1, 1999, the Company shall not be permitted to enter into such agreements with more than 25 employees and the aggregate maximum potential cost to the Company of all such agreements shall not exceed $1,000,000;
(viii) except in the ordinary course of business consistent with past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of, encumber or subject to any lien, any material assets or incur or modify any indebtedness or other material liability, or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligations of any Person or, make any loan or other extension of credit;
(ix) agree to the settlement of any material claim or litigation except for settlements which have been specifically reserved for in the Company's 1998 financial statements and except for settlements which individually do not exceed $300,000 and which in the aggregate, when aggregated with the Excess Settlement Amounts (as hereinafter defined), do not exceed $2,000,000; PROVIDED, FURTHER that those items described in Section 6.3(b)(ix) of the Company Disclosure Letter may only be settled for amounts in excess of the amounts reserved therefor in the Company's 1998 financial statements (the "Excess Settlement Amounts") to the extent that the Excess Settlement Amounts, when aggregated with all other settlements after the date hereof , do not exceed $2,000,000;
(x) make or rescind any material tax election or settle or compromise any material tax liability;
(xi) adopt or enter into a plan purchases of complete or partial liquidationinventory, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its material Subsidiaries (other than the Merger);
(xii) except in the ordinary course of business consistent with past practice, pay, discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise)equipment, other than the payment, discharge or satisfaction of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (or the notes thereto) contained in the Commission Filings;
(xiii) except in the ordinary course of business consistent with past practice, enter into any agreement, understanding or commitment that restrains, limits or impedes the Company's or any of its Subsidiaries' ability to compete with or conduct any business or line of business, including, but not limited to, geographic limitations on the Company's or any of its Subsidiaries' activities;
(xiv) take any action, engage in any transaction or enter into any agreement which would cause any of the Tender Offer Conditions to not be satisfied;
(xv) in the case of the Company only, take any action including, without limitation, the adoption of any shareholder rights plan or amendments to its Certificate of Incorporation or Bynon-Laws (or comparable governing documents), which would, directly or indirectly, restrict or impair the ability of Parent to vote, or otherwise to exercise the rights and receive the benefits of a stockholder with respect to, securities of the Company that may be acquired or controlled by Parent or Sub or permit any stockholder to acquire securities of the Company on a basis not available to Parent or Sub in the event that Parent or Sub were to acquire any shares of its capital stock; or
(xvi) agree, in writing or otherwise, to take any of the foregoing actions. The Company agrees to consult at least bi-weekly (or such shorter intervals as Parent may reasonably request) with Parent on ongoing operational issues with respect to the business and, in any event, shall keep Parent fully informed with respect to the progress of the transactions described on Schedule 6.3 of the Company Disclosure Letter. Each of the parties agree to designate an officer to serve as its designated representative to facilitate these consultations (each, a "Designated Representative"). The Designated Representative of the Parent shall use its reasonable efforts to respond to written requests for waivers of the covenants under this Section 6.3 in no more than 48 hours from the time of receipt.material
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