Conduct of the Business of the Company. The Company covenants and agrees as to itself and its Subsidiaries that, from the date of this Agreement and continuing until the Effective Time, except (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) to the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure Letter, the Company (A) shall conduct its business in all material respects only in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned): (i) (A) issue, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company; (ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property); (iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret; (iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000; (v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement; (vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices; (vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice); (viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; or (ix) authorize any of, or commit or agree to take any of, the foregoing actions other than as provided for in this Section 5.1.
Appears in 2 contracts
Samples: Merger Agreement (Tween Brands, Inc.), Merger Agreement (Dress Barn Inc)
Conduct of the Business of the Company. The Except as (i) contemplated by this Agreement, (ii) set forth on Schedule 5.1 of the Company covenants Disclosure Schedule, or (iii) agreed in writing by Parent, after the date hereof and prior to the Appointment Time, the Company agrees as to itself and its Subsidiaries thatthat the Company and its Subsidiaries shall conduct their respective operations according to the ordinary course of business consistent with past practice, and each of the Company and its Subsidiaries will use commercially reasonable efforts to preserve intact its present business organization, to keep available the services of its present officers and employees and to maintain satisfactory relationships with licensors, licensees, suppliers, contractors, distributors, customers and others having business relationships with it. Without limiting the generality of the foregoing, during the period from the date of this Agreement and continuing until to the Effective Appointment Time, except (i) as expressly contemplated or permitted by this Agreementneither the Company nor any of its Subsidiaries shall, (ii) as required by Law, (iii) to without the extent prior written consent of Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure Letter, the Company (A) shall conduct its business in all material respects only in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):
(i) (A) issue, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (Ca) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange dividend or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement distribution with respect to the voting any shares of the capital stock of the Company;
(ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any Subsidiary of its Subsidiaries, the Company (B) hire any new employees, except other than dividends or other distributions in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except from a wholly owned Subsidiary of the Company to the extent required by applicable Law Company), or by repurchase, redeem or acquire any existing Company Plan or written agreement existing on the date outstanding shares of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus capital stock or other material employee benefit to any employeeequity securities of, officeror other ownership interests in, director or consultant of the Company or any Subsidiary of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreementCompany;
(vib) except as required by GAAP amend any provision of the Certificate of Incorporation, Bylaws or under applicable Law and as concurred with by the Company’s independent auditorssimilar organizational documents of, make or any material change in accounting methodsterm of any outstanding security issued by, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any Subsidiary (other than any wholly owned Subsidiary) of its Subsidiaries the Company; (c) incur, assume or guarantee any indebtedness for borrowed money other than borrowings under existing short term credit facilities not in excess of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made $500,000 in the ordinary course of business consistent with past practice)aggregate;
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; or
(ix) authorize any of, or commit or agree to take any of, the foregoing actions other than as provided for in this Section 5.1.
Appears in 2 contracts
Samples: Agreement and Plan of Reorganization (C Cube Microsystems Inc/De), Agreement and Plan of Reorganization (C Cube Microsystems Inc/De)
Conduct of the Business of the Company. The Company covenants and agrees as to itself and its Subsidiaries that, During the period from the date of this Agreement and continuing until the Effective Time, the Company shall, and shall cause each of its Subsidiaries, except (i) as expressly contemplated or permitted by this Agreement, (ii) as required by applicable Law, (iii) to as set forth in Section 5.01 of the extent Company Disclosure Letter or with the prior written consent of Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed conditioned, or conditioneddelayed), or (iv) as set forth on Section 5.1 of the Company Disclosure Letter, the Company (A) shall to conduct its business in all material respects only in the ordinary course of business, business consistent with past practice, and, to . To the extent consistent therewith, it the Company shall, and shall cause each of its Subsidiaries shall to, use their respective its reasonable best efforts to (i) preserve their its and its Subsidiaries’ business organization intactorganization, to keep available the services of its and its Subsidiaries’ current officers and management-level employees, to preserve the Company Contracts in force its and maintain existing relations and goodwill its Subsidiaries’ present relationships with Governmental Entities, customers, suppliers, distributors, creditors, lessors, officersemployees and business associates, employeeslicensors, licensees, and other Persons having material business associates relationships with it. Without limiting the generality of the foregoing, between the date of this Agreement and consultantsthe Effective Time, (ii) maintain and keep material properties and assets except as otherwise expressly contemplated by this Agreement, as set forth in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which Section 5.01 of the Company Disclosure Letter, or as required by applicable Law, the Company shall not, nor shall it permit any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed conditioned, or conditioneddelayed):
(a) amend or propose to amend its Governing Documents;
(b) (i) split, combine, or reclassify any Company Securities or Company Subsidiary Securities, (Aii) repurchase, redeem, or otherwise acquire, or offer to repurchase, redeem, or otherwise acquire, any Company Securities or Company Subsidiary Securities (other than in connection with the payment of the exercise price or tax withholding relating to any Company Equity Award), or (iii) except as required by the Series A Certificate of Designation, declare, set aside, or pay any dividend or distribution (whether in cash, stock, property, or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital stock (other than dividends from its direct or indirect wholly-owned Subsidiaries);
(c) issue, sell, purchase pledge, dispose of, or redeem encumber any Company Securities or Company Subsidiary Securities, other than the issuance of shares of its or any Subsidiary’s capital stock or Company Common Stock upon (i) the exercise of any Company Security Equity Award outstanding as of the date of this Agreement in accordance with its terms, (ii) the exercise of any Warrants outstanding as of the date of this Agreement in accordance with its terms or (iii) the conversion of any share of Company Preferred Stock outstanding as of the date of this Agreement in accordance with the terms of the Series A Certificate of Designation;
(d) increase the compensation or benefits of any of its directors, officers, employees or consultants, other than (A) increases in compensation for non-officer employees (other than pursuant to the terms of any Company Plan increases in retirement, retiree medical, dental, vision or any awards made under the Company Equity Plans)life insurance, (B) effect any recapitalizationpension, reclassificationequity or equity-based, stock dividendretention, stock split or like change in its capitalization, (Ccontrol or severance payments or benefits for any employees whose annualized total compensation exceeds $150,000) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, business consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or thatprovided that such increases are not, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire as required by the terms of any new Company Employee Plan as in effect as of immediately prior to the date of this Agreement, or (C) as required by Law, (ii) promote any officers or employees, except (A) in connection with the Company’s annual or quarterly compensation review cycle or (B) as the result of the termination or resignation of any officer or employee, (iii) hire or terminate other than for cause (or provide a notice of termination other than for cause to) any officer, employee or consultant whose annualized total compensation exceeds $150,000, or (iv) except as required by Law or by the terms of any Company Employee Plan as in effect as of immediately prior to the date of this Agreement, establish, adopt, enter into, materially amend, terminate, or materially modify any Company Employee Plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a Company Employee Plan if it were in existence as of the date of this Agreement;
(e) other than as required by applicable Law, recognize any new union or other labor organization as the representative of any of the employees of the Company or its Subsidiaries, or enter into any new or amended collective bargaining agreement or other agreement with any labor organization, work council, or trade union;
(f) announce, implement or effect any material reduction in force, layoff or other program resulting in the termination of employees, in each case, that would trigger the WARN Act;
(g) acquire, by merger, consolidation, acquisition of stock or assets, or otherwise, any business or Person or division thereof or make any loans, advances, or capital contributions to or investments in any Person, in each case, in excess of $1,000,000 in the aggregate;
(i) transfer, license, sell, lease, or otherwise dispose of (whether by way of merger, consolidation, sale of stock or assets, or otherwise) or pledge, encumber, or otherwise subject to any Lien (other than a Permitted Lien), any assets, including the capital stock or other equity interests in any Subsidiary of the Company; except (A) transferring, selling, leasing or disposing of obsolete equipment or assets being replaced, or granting of non-exclusive licenses under the Company IP, (B) in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, or (C) except to the extent required by applicable Law for any assets having an aggregate value of less than $1,000,000, or by any existing Company Plan (ii) adopt or written agreement existing on the date effect a plan of this Agreement that has been disclosed complete or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employeespartial liquidation, pay or agree to pay any pensiondissolution, retirement allowancerestructuring, termination or severance payrecapitalization, bonus or other material employee benefit reorganization;
(i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, issue or sell any debt securities or options, warrants, calls, or other rights to acquire any employee, officer, director or consultant debt securities of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by guarantee any existing Company Plan or written agreement existing on the date debt securities of this Agreement that has been disclosed or made available to Parentanother Person, enter into any “keep well” or amend other Contract to maintain any contract financial statement condition of employment any other Person (other than any wholly-owned Subsidiary of it) or enter into any consultingarrangement having the economic effect of any of the foregoing, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees other than (i) indebtedness of borrowed money incurred in the ordinary course of business consistent with past practice with an annual base rate under the Company Credit Facility as of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend (ii) in connection with the financing of ordinary course trade payables consistent with past practice, and (iii) intercompany indebtedness between the Company and any wholly owned Subsidiaries or terminate among any existing, Company Plan or benefit arrangement or any collective bargaining agreementwholly owned Subsidiaries;
(vij) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made other than in the ordinary course of business consistent with past practice, enter into or amend or modify in any material respect, or consent to the termination of (other than at its stated expiry date), any Company Material Contract with respect to material Real Property or any other Contract or Real Property Lease that, if in effect as of the date of this Agreement would constitute a Company Material Contract with respect to material Real Property hereunder;
(viiik) makeinstitute, revoke settle, or amend compromise any Legal Action involving the payment of monetary damages by the Company or any of its Subsidiaries of any amount exceeding $1,000,000 in the aggregate, other than (i) any Legal Action brought against Parent or Merger Sub arising out of a breach or alleged breach of this Agreement by Parent or Merger Sub, and (ii) the settlement of claims, liabilities, or obligations reserved against on the Company Balance Sheet; provided, that neither the Company nor any of its Subsidiaries shall settle or agree to settle any Legal Action which settlement involves a conduct remedy or injunctive or similar relief that would have a material restrictive impact on the Company’s or any of its Subsidiaries’ business;
(l) make any material change in any method of financial accounting principles or practices, in each case except for any such change required by a change in GAAP or applicable Law;
(m) (i) settle or compromise any material Tax claim, audit, or assessment, (ii) make or change any material Tax election, change any annual Tax accounting period, or adopt or change any method of Tax accounting, extend (iii) amend any material Tax Returns or waive the application of file claims for material Tax refunds, or (iv) enter into any statute of limitation regarding the assessment material closing agreement, surrender in writing any right to claim a material Tax refund, offset or collection of any Tax, settle or compromise any other reduction in Tax liability or refund consent to any extension or file waiver of the limitation period applicable to any amended material Tax Returnclaim or assessment relating to the Company or its Subsidiaries;
(n) enter into any material agreement, agreement in principle, letter of intent, memorandum of understanding, or similar Contract with respect to any joint venture, strategic partnership, or alliance;
(o) except in connection with actions permitted by Section 5.04 hereof, take any action to exempt any Person from, or make any acquisition of securities of the Company by any Person not subject to, any state takeover statute or similar statute or regulation that applies to the Company with respect to a Takeover Proposal or otherwise, including the restrictions on “business combinations” set forth in Section 203 of the DGCL, except for Parent, Holdco, Rooster Merger Sub, Parent Merger Sub or any of their respective Subsidiaries or Affiliates, or the transactions contemplated by this Agreement;
(p) abandon, allow to lapse, sell, assign, transfer, grant any security interest in otherwise encumber or dispose of any material Company IP (other than in connection with a Permitted Lien), or grant any right or license to any material Company IP other than pursuant to non-exclusive licenses entered into in the ordinary course of business consistent with past practice;
(q) terminate or modify, or fail to exercise renewal rights, in any material respect any material insurance policy;
(r) except to the extent expressly permitted by Section 5.04 or Article VII, take any action that is intended or that would reasonably be expected to, individually or in the aggregate, prevent, materially delay, or materially impede the consummation of the Mergers, or the other transactions contemplated by this Agreement;
(s) adopt or otherwise implement any stockholder rights plan, “poison pill” or other comparable agreement designed to have the effect of delaying, deferring or discouraging Parent or Merger Sub from acquiring control of the Company pursuant to this Agreement; or
(ixt) agree, authorize any of, or commit or agree to take do any of, of the foregoing actions other than as provided for in this Section 5.1foregoing.
Appears in 2 contracts
Samples: Merger Agreement (NRC Group Holdings Corp.), Merger Agreement (Us Ecology, Inc.)
Conduct of the Business of the Company. The Except as contemplated -------------------------------------- by this Agreement, agreed to in writing by the Parent or as set forth in the Company covenants and agrees as to itself and its Subsidiaries thatDisclosure Letter, during the period from the date of this Agreement and continuing until prior to its termination or the Effective Timetime the directors designated by the Purchaser have been elected to, except and shall constitute a majority of, the Board of Directors of the Company, the Company and its subsidiaries will each conduct its operations (i) as expressly contemplated according to its ordinary course of business consistent with past practice or permitted by this Agreement, (ii) as required within the scope of the authority given management by Law, (iii) to the extent Parent shall otherwise consent Board of Directors of the Company in writing (which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) the corporate policies as set forth on Section 5.1 in and modified pursuant to a facsimile transmission, dated May 8, 2000, Re: Corporate Policies from Xxxxxxx X. Xxxxxxx, Senior Vice President of Parent to the Chairman and Chief Executive Officer of the Company (the "Corporate Policies"). Without limiting the generality of the foregoing, and except as otherwise expressly permitted by the Corporate Policies, contemplated by this Agreement or set forth in the Company Disclosure Letter, prior to the Effective Time, neither the Company (A) shall conduct its business in all material respects only in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or nor any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not tosubsidiaries will, without Parent’s the prior written consent of the Parent (which consent shall not be unreasonably withheldsolicited from Parent by notice given pursuant to Section 10.4, delayed or conditionedupon receipt of which Parent shall respond within 10 days):
(ia) amend its certificate of incorporation or by-laws (Aor equivalent instruments);
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of additional options, warrants, commitments, subscriptions, rights to purchase or redeem otherwise) any shares of capital stock of any class or any securities convertible into shares of capital stock of any class, except as required by any stock option plan or agreement existing as of the date hereof;
(c) split, combine or reclassify any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans)stock, (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock or property), property or any combination thereof) in respect of, any of its capital stock, redeem or otherwise acquire any shares of its capital stock, or alter in any respect the ownership structure of the Company and its subsidiaries;
(i) pledge or otherwise encumber shares of capital stock of the - Company or any of its subsidiaries; (ii) create, incur, assume, maintain, -- prepay, or permit to exist any long-term debt (including obligations in respect of capital leases) or obligations with respect to letters of credit or any material short-term debt, other than dividends indebtedness that is mandatorily prepayable in accordance with its terms and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory short-term borrowings incurred in the ordinary course of business, business consistent with past practice; (iii) assume, guarantee, endorse or stock otherwise become liable or --- responsible (whether by way directly, contingently or otherwise) for the obligations of mergerany person other than any subsidiary of the Company; or (iv) -- make any loans, consolidationadvances or capital contributions to, tender offeror investments in, share exchange any person other than any of the subsidiaries of the Company (other than de -- minimis amounts advanced to employees for travel, meal and other similar ------- business-related expenses or other activitythe advances it has committed to make on co- investments in COMIT);
(i) in sell, transfer, mortgage or otherwise dispose of or encumber, any transaction or any series business, subsidiary, assets of related transactions for an aggregate purchase price or pricesthe Company and its subsidiaries, in excess of $250,000or, other than in the ordinary course of business, business consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
fixed assets, (ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, assign or otherwise dispose of transfer any of its material properties or assets (includingrights to service loans, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, business and in a manner consistent with past practicepractice and, modifyin the case of encumbrances, amend pursuant only to existing conduit agreements that have been previously disclosed to the Parent, sell, transfer or encumber any loan or (iv) cancel any correspondent relationships;
(f) amend, default under or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly Contracts, waive, release or assign any material rights right or claims thereunderclaim, or (C) dispose ofmodify, grant or permit to lapse enter into any material Company Intellectual Property Rights new, intra-company agreements or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secretarrangements;
(ivg) discharge, settle, compromise, assign originate any DUS Loans with a greater risk level than Xxxxxx Mae Risk Level I or satisfy originate or underwrite any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result Loans under origination and underwriting standards other than those in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to place on the date of this Agreement that have been disclosed Agreement;
(h) permit any material insurance policy naming it as a beneficiary or made available a loss payable payee to Parent be cancelled or terminated;
(2i) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses compensation payable or other compensation and benefits to become payable by the Company or to any of its Subsidiaries to any of the employees, officers, directors officers or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, employees except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary who are not to exceed $100,000, (C) officers and except to the extent required by applicable Law under employment or by any existing Company Plan or written agreement existing consulting contracts in effect on the date of this Agreement Agreement, copies of which have been delivered to the Purchaser or increase the total number of employees employed by the Company or any subsidiary or take any other action that has been disclosed the effect of increasing the aggregate payroll obligations of the Company or made available any subsidiary in any material fashion, or establish, adopt, enter into, make any new grants or awards under, be obligated to Parent grant any awards under, terminate, amend, or in the ordinary course of business make any representations regarding, any Company Benefit Plan or any collective bargaining (except as required by law), bonus, profit sharing, thrift, compensation, stock option or other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employeesequity, pay or agree to pay any pension, retirement allowanceretirement, termination incentive or severance paydeferred compensation, bonus employment, retention, termination, severance, health, life or other material employee welfare, fringe or other plan, agreement, trust, fund, policy or arrangement for the benefit to of any employeecurrent or former directors, officer, director officers or consultant employees of the Company or any of its Subsidiariessubsidiaries, whether past or present, (D) except to the extent grant or pay any benefit not required by applicable Law or by any existing Company Plan plan or written agreement existing on arrangement (including, without limitation, the date granting of this Agreement that has been disclosed stock options, stock appreciation rights, shares of restricted stock or made available to Parent, enter into performance units) or amend any contract annual return or other filing required with respect to any Company Benefit Plan by the Service, the Pension Benefit Guaranty Corporation, the Department of employment Labor or any consultingother governmental agency or body having jurisdiction over any Company Benefits Plan;
(j) change in any material respect any of the accounting principles used by it, bonusunless required by GAAP or deplete the reserves or cash balances of the Company or any of the subsidiaries, severance, retention, retirement or similar agreement, except for agreements for newly hired employees other than in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(viik) (i) enter into any contract that limits material commitment or otherwise restricts transaction with respect - to the Company or its subsidiaries outside the ordinary course of business, (ii) transfer any business or material portion thereof, (iii) make any -- --- further investment in WMF Carbon Mesa Advisors, Inc. or (iv) enter into any -- new line of its Subsidiaries business;
(i) acquire or agree to acquire, by merging or consolidating with, - by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets of their respective Affiliates or any successor thereto from engaging or competing in any line other person (other than the purchase of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made assets in the ordinary course of business and consistent with past practice), or (ii) acquire any servicing right in a "bulk" transaction; --
(i) take any action, engage in any transaction or enter into any - agreement which would cause any of the representations or warranties set forth in Article IV hereof 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;
(viiin) maketake any action, revoke including without limitation, any amendments to the Company Certificate of Incorporation, which would, directly or indirectly, restrict or impair the ability of the 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 the Parent or the Purchaser or permit any stockholder to acquire securities of the Company on a basis not available to the Parent in the event that the Parent were to acquire securities of the Company;
(o) terminate the employment of any production or management personnel identified by the Parent to the Company in a facsimile communication from Xxxxxxx X. Xxxxxxx, Senior Vice President of Parent to the Chairman and Chief Executive Officer of the Company dated May 8, 2000;
(p) amend any Tax election, adopt Return previously filed or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, agree to settle or compromise any Tax liability government audit, assessment, dispute or refund or file any amended Tax Returnother proceedings with respect to Taxes; orand
(ixq) authorize any of, or commit or agree to take do any of, of the foregoing actions other than as provided for in this Section 5.1actions.
Appears in 2 contracts
Samples: Merger Agreement (Prudential Mortgage Capital Co LLC), Merger Agreement (Prudential Mortgage Capital Co LLC)
Conduct of the Business of the Company. The Company covenants and agrees as to itself and its Subsidiaries that, from the date of this Agreement and continuing until the Effective Time, except (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) Law or to the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure Letterwriting, the Company (A) shall conduct its business in all material respects only in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their its business organization intact, preserve the Company Contracts in force and maintain its existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company such party or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided. In addition, howeverand without limiting the generality of the foregoing, that no action by from the date of this Agreement to the Effective Time, except as set forth on Section 5.1 of the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provisionDisclosure Letter, and (B) the Company shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):consent:
(i) (A) issue, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions (whether or not related) for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, 1,000,000 or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(ii) incur any Indebtedness (other than letters of credit in the ordinary course of business not to exceed $3,000,000 in the aggregate and consistent with past practice and intercompany Indebtedness between the Company and any of its wholly owned Subsidiaries or between such wholly owned Subsidiaries) or sell, lease, sublease, license or permit to be subject to any Lien, Lien (other than a Liens existing on the date hereof and Permitted Lien, Liens) or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Propertyother than the sale of inventory in the ordinary course of business consistent with past practice);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or expenditures that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice4,000,000, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company Contract or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) except in the ordinary course of business consistent with past practice, dispose of, grant grant, obtain or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, business consistent with past practice, or (B) except where such discharge, settlement, compromise relating to or satisfaction of arising from any claim would result in payments securities class action claims or related derivative claims or (individually and not in the aggregate), net of insurance, by the Company C) relating to or arising from any of its Subsidiaries of less than $250,000drug pricing claims;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employeesParent, grant or announce any stock option, equity or incentive awards or the any increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors directors, stockholders or consultants other service providers of the Company or any of its Subsidiaries; provided, however, that the Company shall be permitted to increase the salaries of its employees in the ordinary course of business consistent with past practice and take such actions contemplated by Section 6.10(d), (B) hire any new employees, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000practice, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement agreements existing on the date of this Agreement that has have been disclosed or made available to Parent Parent, or except as provided in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employeesSection 6.10(d), pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit not required by any existing Company Plan or other agreement or arrangement in effect on the date of this Agreement to any employee, officer, director director, stockholder or consultant other service provider of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement agreements existing on the date of this Agreement that has have been disclosed or made available to ParentParent or as may otherwise be required to comply with the requirements of Section 409A of the Code, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate practice, provided that any such agreements shall not provide for the payment of salary not to exceed $100,000 any severance or termination amounts as a result of this Agreement or the consummation of the transactions contemplated hereby, or (E) except as otherwise provided in this Section 5.1(v), enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement)renew, amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) make any commitments to employees of the Company or any of its Subsidiaries regarding the compensation, benefits or other treatment that they will receive in connection with, or subsequent to the consummation of, the Merger, unless any such commitments are consistent with the express provisions of this Agreement or with the prior directives or documentation provided to the Company by Parent;
(vii) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(viiviii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto or that could, after the Effective Time, limit or restrict Parent or any of its Affiliates (including the Surviving Company) or any successor thereto, from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice)area;
(viiiix) not make, revoke or amend any material Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any material Tax, settle or compromise any material Tax liability or refund refund, enter into any agreement relating to material Taxes or file any material amended Tax ReturnReturn without Parent’s prior written consent;
(x) except to the extent expressly permitted by Section 6.4, take any action to render inapplicable, or to exempt any third party from, any state takeover Law or state Law that purports to limit or restrict business combinations or the ability to acquire or vote any securities of the Company or any of its Subsidiaries;
(xi) except to the extent expressly permitted by Section 6.4, take any action that is intended or could reasonably be expected to result in any of the conditions to the Merger set forth in Article VII not being satisfied; or
(ixxii) except to the extent expressly permitted by Section 6.4, authorize any of, or commit or agree to take any of, the foregoing actions other than as provided for in this Section 5.1actions.
Appears in 2 contracts
Samples: Merger Agreement (Celgene Corp /De/), Merger Agreement (Pharmion Corp)
Conduct of the Business of the Company. The Except as (i) contemplated by this Agreement and (ii) as set forth on the Company covenants Disclosure Schedule, after the date hereof and prior to the Appointment Time, the Company agrees as to itself and its Subsidiaries that, from the date of this Agreement and continuing until the Effective Time, that (except (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) to the extent that Parent shall otherwise consent in writing (consent, which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure Letter, the Company (A) shall conduct its business in all material respects only in operations according to the ordinary course of business, business consistent with past practice, andand will use commercially reasonable efforts to preserve intact its present business organization, to keep available the extent consistent therewithservices of its present officers and employees and to maintain satisfactory relationships with licensors, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customerslicensees, suppliers, contractors, distributors, creditorscustomers and others having business relationships with it. Without limiting the generality of the foregoing, lessorsduring the period from the date of this Agreement to the Appointment Time, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which neither the Company or nor any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not toshall, without Parent’s the prior written consent (of Parent, which consent shall not be unreasonably withheld, delayed or conditioned)::
(i) (A) issue, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (Ca) declare, set aside or pay any dividends ondividend or other distribution with respect to any shares of capital stock of the Company, or make repurchase, redeem or acquire any other distributions (whether in cash, outstanding shares of capital stock or property), in respect other equity securities of, or other ownership interests in, the Company or any Subsidiary of its capital stock, other than dividends and distributions by a direct the Company or indirect wholly owned Subsidiary to its parent, effect any stock split (Dforward or reverse) amend or otherwise change its capitalization or capital structure in any Subsidiary’s certificate manner from the way it existed on the date hereof;
(b) amend any provision of the Certificate of Incorporation or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition Bylaws of, or investment inany material term of any outstanding security issued by, assets the Company or any Subsidiary (other than any wholly owned Subsidiary) of the purchase of supplies Company;
(c) incur, assume or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or guarantee any indebtedness for borrowed money other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, than borrowings under existing short term credit facilities not in excess of $250,00025,000 in the aggregate;
(d) change any method of accounting or accounting practice by the Company or any Subsidiary of the Company, except for any such change required by reason of a change in GAAP;
(i) grant any severance or termination pay to any director, officer or employee of the Company or any Subsidiary of the Company, (ii) enter into any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any director, officer or employee of the Company or any Subsidiary of the Company, (iii) increase benefits payable under any existing severance or termination pay policies or employment agreements or (iv) increase compensation, bonus or other benefits payable to directors, officers or employees of the Company or any Subsidiary of the Company, in each case other than in the ordinary course of businessbusiness consistent with past practice;
(f) issue any Company Securities or the securities of any Subsidiary of the Company other than (i) pursuant to Company Options, warrants or other Common Stock equivalents outstanding as of the date of this Agreement, and (ii) pursuant to the Company ESPP;
(g) acquire, dispose of or license assets material to the Company and its Subsidiaries, except for sales of inventory in the ordinary course of business consistent with past practice, or acquire or dispose of capital stock of any third party, merge or consolidate with any third party;
(Fh) enter into any joint venture, partnership or similar agreement with respect to the voting of the capital stock of the Companyany Person other than a wholly owned Subsidiary;
(iii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which of the Company Company's or any of its Subsidiaries is a party Subsidiaries' Material Contracts, or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse under any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company Company's or Parentany of its Subsidiaries' Material Contracts, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of except in the ordinary course of business, consistent ;
(j) make any Tax election inconsistent with past practicepractice that, individually or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by would adversely affect in any material respect the Company Tax liability or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants Tax attributes of the Company or any of its Subsidiaries, (B) hire any new employees, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with taken as a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any newwhole, or materially increase benefits under settle or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate compromise any existing, Company Plan or benefit arrangement or any collective bargaining agreementmaterial Tax liability;
(vik) except as required by GAAP settle, compromise or under applicable Law and as concurred with by the Company’s independent auditorsotherwise terminate any litigation, make any material change in accounting methods, principles claim or practicesother settlement negotiation;
(viil) fail to maintain insurance covering the Company's or its Subsidiaries' material properties and assets under substantially similar terms and conditions as the Company's or its Subsidiaries', as applicable, current policies;
(m) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax ReturnMaterial Contract; or
(ixn) authorize any ofauthorize, or commit or agree to take any of, of the foregoing actions except as otherwise permitted by this Agreement. Notwithstanding the foregoing or anything contained herein to the contrary, from the date hereof to the Appointment Time, the Company shall confer with Parent and its Representatives, at such times as they may request, as to operational and integration matters, and promptly notify the same of any change in the normal course of any business, operations or financial condition of the Company, its Subsidiaries or their respective assets or properties, or any emergency related thereto. Without limiting the generality of the foregoing, the Company shall promptly notify Parent of (i) any discussions or actions (of any type, preliminary or otherwise) relating to bankruptcy of the Company or its Subsidiaries, (ii) any complaints, investigations or hearings (or communications indicating that the same may be contemplated) of any Governmental Entity, (iii) any material loss of or damage to any property, (iv) any material change in material existing relationships with outside third parties, (v) the institution or threat of any material litigation that could affect the Company (vi) the failure of the Company to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it pursuant to this Agreement or (vii) any other than as provided for matter that could result in this Section 5.1a Material Adverse Effect.
Appears in 1 contract
Samples: Offer Agreement (Peoplepc Inc)
Conduct of the Business of the Company. The Company covenants and agrees as Prior to itself and its Subsidiaries that, from the date of this Agreement and continuing until the Effective Time, except (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) to Agreement and except for the extent Parent matters set forth in SCHEDULE 5.3 or unless Merger Sub shall otherwise consent have previously agreed in writing (which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure Letterwriting, the Company (A) shall, and shall conduct cause its business Subsidiary to, cause the Property to be operated and maintained in a professional manner and to carry on their respective businesses in the usual, regular and ordinary course in accordance in all material respects only in the ordinary course of business, consistent with past practicepractice and in accordance with all applicable laws, andand shall, to the extent consistent therewithand shall cause its Subsidiary to, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve intact the Company's status as a REIT within the meaning of the Code, to preserve intact their present business organizations and properties, and keep available the services of their employees and preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill relationships with customers, suppliers, distributorstenants and others having business dealings with them. Without limiting the generality of the foregoing, creditorsand except as contemplated by this Agreement, lessorsincluding Section 2.5, officersand except for the matters set forth in SCHEDULE 5.3, employeesprior to the Effective Time unless Parent shall otherwise have previously agreed in writing, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, not and shall cause each not permit its Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned)::
(i) (A) issue, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (Cw) declare, set aside aside, or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than (1) dividends and distributions by a direct or indirect wholly owned the Company's Subsidiary to its parentthe Company, (D2) the Special Dividend and (3) if the Closing occurs after December 23, 2005, the 2005 Dividend, (x) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, (y) purchase, redeem or otherwise acquire, any shares of capital stock of the Company or its Subsidiary or any other equity securities thereof or any rights, warrants, or options to acquire any such shares or other securities or (z) create any subsidiaries;
(ii) issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, any other voting securities of the Company or any securities convertible into, or any rights, warrants or options to acquire, any such shares or voting securities;
(iii) amend its declaration of trust, by-laws or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent other comparable organizational documents);
(iv) acquire or agree to acquire (x) by merging or consolidating with, (E) make any acquisition or by purchasing a substantial portion of the assets of, or investment inby any other manner, assets (other than the purchase of supplies any business or inventory in the ordinary course of businessany corporation, consistent with past practice) or stock (whether by way of mergerpartnership, consolidationjoint venture, tender offer, share exchange association or other activitybusiness organization or division thereof, or (y) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, assets other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement practice and in accordance with respect the budget provided to the voting of the capital stock of the CompanyParent;
(i) sell, contribute, assign or create any right, title or interest whatsoever in or to the Property, (ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to cause any Lien, assessment, obligation, interest, encroachment or liability whatsoever (other than a the Company Permitted LienEncumbrances) to be placed or remain of record against the Property, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
and (iii) (A) enter into any new line of business knowingly impair or make or agree to make any new capital expenditure modify in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract respect the status of title to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in legal description of) the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreementProperty;
(vi) except as required by GAAP or under applicable Law and as concurred with by for the Company’s independent auditorsTelco Stores Lease, make any material change in accounting methods, principles or practices;
(vii1) enter into any contract new (or extend, renew or replace any existing) lease, agreement, service contract, employment contract, permit or obligation affecting the Property, (2) change, alter, file for, pursue, accept or obtain any zoning, land use permit or other development approval or entitlement, (3) consent to the inclusion of any portion of the Property into any special district or (4) terminate any Space Lease or Service Contract (other than upon expiration of such Tenant Lease or Service Contract pursuant to its terms); PROVIDED, HOWEVER, that limits or otherwise restricts the Company may enter into any -------- ------- service or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made similar contract without Merger Sub's approval if such contract is entered into in the ordinary course of the Company business consistent and is terminable without penalty or premium on not more than 30 days' notice from the owner of the Property and is disclosed promptly in writing to Merger Sub; provided, FURTHER, that with past practicethe prior consent of the Parent, the Company may enter into new leases; -------
(vii) make or rescind any material election relating to Taxes (unless the Company reasonably determines that such action is required by law or necessary to preserve the Company's status as a REIT);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; or
(ix) authorize any of, or commit or agree to take any of, the foregoing actions other than as provided for in this Section 5.1.
Appears in 1 contract
Conduct of the Business of the Company. The Company covenants and (a) Seller agrees as to itself and its Subsidiaries that, during the period from the date of this Agreement and continuing until to the Effective TimeClosing, except as consented to by Buyer in writing, Seller shall cause the Company to conduct the business in the ordinary course, consistent with past practices, and shall use its reasonable efforts to ensure that the Company (i) as expressly contemplated or permitted by this Agreementpreserves substantially intact its business organization, (ii) as required by Law, (iii) to keeps available the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 services of the Company Disclosure Letter, the Company (A) shall conduct its business in all material respects only in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates Producers and consultants, (ii) maintain consultants and keep material properties and assets in good repair and condition, (iii) maintain in effect maintains good relationships with all material governmental Permits pursuant to which Persons with whom it does business (including Producers).
(b) Without limiting the Company or any generality of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; providedthe foregoing, howeverSeller agrees that, that no action by during the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach period from the date of this sentence unless such action would constitute a breach of such other provisionAgreement to the Closing, and (B) except as consented to by Buyer in writing, Seller shall not, and Seller shall cause each Subsidiary the Company not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned)::
(i) amend, waive or otherwise change, in any respect, its articles of incorporation or bylaws;
(Aii) authorize for issuance, issue, grant, sell, purchase pledge, dispose of or redeem propose to issue, grant, sell, pledge or dispose of any shares of, or any options, warrants, commitments, subscriptions or rights of any kind to acquire or sell any shares of, its capital stock or other securities or equity interests, including any securities convertible into or exchangeable for shares of stock of any class and any other equity-based awards;
(iii) split, combine, recapitalize or reclassify any shares of its or any Subsidiary’s capital stock or equity interests or issue any Company Security (other than pursuant to the terms of any Company Plan securities in respect thereof, or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, pay or set aside any dividend or pay any dividends on, or make any other distributions distribution (whether in cash, stock or property), property or any combination thereof) in respect of, any of its capital stockstock or equity interests, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parentdirectly or indirectly redeem, (D) amend purchase or otherwise change acquire or offer to acquire any shares of its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or capital stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction securities or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secretequity interests;
(iv) dischargeincur, settlecreate, compromiseassume, assign prepay or satisfy otherwise become liable for any claimIndebtedness (directly, whether contingently or not pending before otherwise), make a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practiceloan or advance to or investment in any third party, or (B) except where such discharge, settlement, compromise guarantee or satisfaction endorse any Indebtedness or other liability or obligation of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000Person;
(v) (A) except (1) to the extent required by applicable Law enter into or by written agreements adopt any employee benefit plan or Company Plans existing prior to the date of this Agreement that have been disclosed arrangement solely sponsored or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable maintained by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its SubsidiariesCompany, (B) hire except as set forth in Section 5.1(b)(v)(B) of the Disclosure Schedule, increase in any new employees, except in manner the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance paycompensation, bonus or fringe or other material benefits of, or pay any bonus of any kind or amount whatsoever to, any current or former director, employee benefit to any employee, officer, director or consultant of the Company or the Business, (C) pay any benefit or amount not required under any Plan or any other benefit plan or arrangement for the benefit any current or former director, employee or consultant of its Subsidiaries, whether past the Company or presentthe Business, (D) except to grant or pay any severance or termination pay or increase in any manner the extent required by applicable Law severance or by termination pay of any existing current or former directors, employee or consultant of the Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to ParentBusiness, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into grant any awards under any bonus, incentive, performance or adopt other compensation plan or arrangement or Plan to any newcurrent or former director, employee or materially increase consultant of the Company or the Business, (F) take any action to fund or in any other way secure the payment of compensation or benefits under any employee plan, agreement, contract or renew arrangement or Plan for the benefit any current or former director, employee or consultant of the Company or the Business or (other than automatic renewals pursuant G) except as set forth in Section 5.1(b)(v)(G) of the Disclosure Schedule, take any action to an existing Company Plan accelerate the vesting or written agreement existing on the date payment of this Agreement), amend or terminate any existing, Company Plan compensation or benefit arrangement under any Plan for the benefit any current or any collective bargaining agreementformer director, employee or consultant of the Company or the Business;
(vi) except as required by GAAP hire any new employee, or under applicable Law and as concurred with by the Company’s independent auditorspromote any current employee, make any material change in accounting methods, principles to be an officer or practicesmember of senior management;
(vii) other than as contemplated by this Agreement, transfer any employee into the Company or out of the Company;
(viii) (A) make, revoke, or amend any Tax election or settle or compromise any Tax liability, claim or assessment or agree to an extension or waiver of the limitation period to any Tax claim or assessment or grant any power of attorney with respect to Taxes or enter into any closing agreement with respect to any Tax or surrender any right to claim a Tax refund, (B) change any method of accounting for Tax purposes or (C) file any amended U.S. federal, state or foreign income Tax Return or any other material amended Tax Return;
(ix) grant or acquire (except as contemplated by this Agreement), or abandon, cancel or otherwise dispose of or permit to lapse, any right, title or interest in or to, any rights to any Intellectual Property, or disclose to any Person (other than representatives of Buyer), any trade secret, except in each case as necessary in the ordinary conduct of the Business consistent with past practice and pursuant to reasonable confidentiality protection;
(x) except as contemplated by this Agreement, modify or amend in any material manner, terminate or waive or assign any material right under any Company Material Contract or enter into any new contract that limits or otherwise restricts would be a Company Material Contract;
(xi) fail to maintain the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing Books and Records in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made all material respects in the ordinary course of business consistent with past practice);
(viiixii) makeestablish any subsidiary or enter into any new line of business;
(xiii) fail to keep in force insurance policies or replacement or revised policies providing insurance coverage with respect to its assets, revoke operations and activities as are currently in effect;
(xiv) revalue any of its material assets or amend make any Tax electionchange in accounting methods, adopt principles or change any method of accountingpractices, extend or waive except as required by GAAP Accounting Principles;
(xv) except as contemplated in the application of any statute of limitation regarding the assessment or collection of any TaxAgreement, waive, release, assign, settle or compromise any Tax suit, action, claim, proceeding or investigation (including any suit, action, claim, proceeding or investigation relating to this Agreement or the transactions contemplated hereby), other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages (and not the imposition of equitable relief on, or the admission of wrongdoing by, the Company) not in excess of $25,000 individually, or $100,000 in the aggregate, or otherwise pay, discharge or satisfy any claims, liabilities or obligations other than in the ordinary course of business consistent with past practice. For the avoidance of doubt, nothing in this Section 5.1(b)(xv) shall limit the ability of the Company to settle insurance or reinsurance claims in the ordinary course of business ;
(xvi) acquire, including by merger, consolidation, acquisition of stock or assets, or any other form of business combination, any corporation, partnership, limited liability company, other business organization or refund any division thereof, or file any amended Tax Returnmaterial amount of assets;
(xvii) sell, lease, license, transfer, exchange or swap, mortgage or otherwise pledge or encumber (including securitizations), or otherwise dispose of any material portion of its properties, assets or rights;
(xviii) make any capital expenditures in excess of $100,000;
(xix) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;
(xx) enter into any agreement, understanding or arrangement with respect to the voting or registration of its capital stock;
(xxi) enter into any new reinsurance agreement or transaction as assuming or ceding insurer;
(xxii) alter or amend in any material respect any existing underwriting, claims handling, loss control, investment, actuarial, financial reporting or accounting practices, guidelines or policies (including compliance policies) or any material assumption underlying an actuarial practice or policy, except as may be required by GAAP or Applicable Law;
(xxiii) take any action that would reasonably be expected to delay or impair the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements; or
(ixxxiv) authorize any of, or commit or agree to take do any of, of the foregoing actions other than as provided for in this Section 5.1actions.
Appears in 1 contract
Samples: Stock Purchase Agreement (Montpelier Re Holdings LTD)
Conduct of the Business of the Company. The Except for matters permitted by this Agreement and the other Transaction Agreements, set forth on Section 6.01 of the Company covenants and Disclosure Schedule, Section 7.22 hereof, or as required by applicable Law, unless GrafTech otherwise agrees as to itself and its Subsidiaries thatin writing, from the date of this Agreement and continuing until to the Effective Time, the Company shall conduct, and shall cause each of its Subsidiaries to conduct, its business in the usual, regular and ordinary course in substantially the same manner as previously conducted and use reasonable best efforts to preserve intact its current business organization, keep available the services of its current officers and employees and keep its relationships with customers, suppliers, distributors and others having business dealings with them. In addition, and without limiting the generality of the foregoing, except (i) as expressly contemplated or for matters permitted by this AgreementAgreement and the other Transaction Agreements, (ii) as set forth on Section 6.01 of the Company Disclosure Schedule, Section 7.22 hereof, or required by applicable Law, (iii) from the date of this Agreement to the extent Parent Effective Time, the Company shall otherwise not (directly or indirectly), and shall cause its Subsidiaries not to, do any of the following without the prior written consent in writing of GrafTech (which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure Letter, the Company (A) shall conduct its business in all material respects only in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):
(ia) authorize any amendments to its organizational documents or the Limited Liability Company Operating Agreement;
(b) (A) issue, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (Ci) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock stock, property or property), otherwise) in respect of, of any of its capital stock, other than dividends and distributions by a direct equity interests or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock its Units or any equity interests of its Subsidiaries (other than dividends paid by a direct or indirect wholly owned Subsidiary of the CompanyCompany to its parent and as necessary to make Permitted Tax Distributions); (ii) split, combine or reclassify any of its equity interests; (iii) issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, any of its equity interests or (iv) purchase, redeem or otherwise acquire or issue or sell any of its equity interests or any other securities thereof or any rights, options, warrants or calls to acquire or sell any such shares or other securities;
(iic) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make acquire or agree to make acquire (i) by merging or consolidating with, or by purchasing a substantial equity interest in or portion of the assets of, or by any new capital expenditure in excess of $250,000 other manner, any business or thatany corporation, partnership, joint venture, association or other business organization or division thereof or (ii) any assets that are material, individually or in the aggregate, are in excess to the Company, except purchases of $500,000, other than inventory in the ordinary course of business, business consistent with past practice, ;
(Bd) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (Ci) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Personexecutive officer, other than to Representatives director, member or employee of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employeescompensation, except in the ordinary course of business consistent with past practice with respect or to employees with an annual base salary not to exceed $100,000the extent required under employment agreements set forth on Section 6.01(d) of the Company Disclosure Schedule, (Cii) grant to any executive officer, director or employee of the Company any increase in severance or termination pay, except to the extent required by applicable Law under any agreement set forth on Section 6.01(d) of the Company Disclosure Schedule, (iii) enter into any employment, consulting, indemnification, severance or by termination agreement, or a waiver of any existing terms thereof, with any such executive officer, director or employee, (iv) establish, adopt, enter into or amend in any material respect any collective bargaining agreement or Company Benefit Plan or written agreement existing on the date of this Agreement that has been disclosed (v) take any action to accelerate any rights or made available to Parent benefits, or make any material determinations not in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employeesprior practice, pay under any collective bargaining agreement or agree to pay Company Benefit Plan;
(e) make any pensionmaterial Tax elections or make any change in accounting methods, retirement allowanceprinciples or practices materially affecting the reported consolidated assets, termination liabilities or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant results of operations of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent insofar as may have been required by applicable Law a change in GAAP;
(f) (i) sell, lease, license, mortgage, sell and leaseback or by otherwise encumber or subject to any existing Company Plan Lien or written agreement existing on otherwise dispose of any of its material properties or other material assets or any interests therein, except for sales of inventory and used equipment in the date ordinary course of this Agreement that has been disclosed business consistent with past practice, or made available to Parent(ii) enter into, modify or amend in a material respect any lease of material property, other than in the ordinary course of business consistent with past practice, or enter in any sublease or assignment thereof;
(g) (i) incur, assume or guarantee any debt or obligation of another Person, enter into any agreement to maintain any financial statement condition of another Person or amend enter into any contract arrangement having the economic effect of employment or any consulting, bonus, severance, retention, retirement or similar agreementof the foregoing, except for agreements for newly hired employees short-term borrowings incurred in the ordinary course of business consistent with past practice, or (ii) make any loans, advances or capital contributions to, or investments in, any other Person, other than to or in the Company in the ordinary course of business consistent with past practice;
(h) enter into, modify, amend or terminate any Contract or waive, release or assign any rights or claims thereunder, which if so entered into, modified, amended, terminated, waived, released or assigned with any Affiliate or related or interested party, or could reasonably be expected to (i) impair the ability of the Company to perform its obligations under this Agreement or the other Transaction Agreements in any material respect, (ii) prevent or materially delay the consummation of the Merger, (iii) take any action intended to or that would reasonably be expected to, individually or in the aggregate, impede, interfere with, prevent, or materially delay the consummation of the Merger or the other transactions contemplated by this Agreement or the other Transaction Agreements or (iv) exceed a value of $250,000 other than in the ordinary course of business consistent with past practice;
(i) (i) pay, discharge or satisfy any material debt, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice or in accordance with an annual base rate their terms, of salary not to exceed $100,000 liabilities reflected or (E) enter into or adopt any newreserved against in, or materially increase benefits under contemplated by, the most recent consolidated financial statements (or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date notes thereto) of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made incurred in the ordinary course of business consistent with past practice, (ii) cancel any material Indebtedness (individually or in the aggregate) or waive any claims or rights of substantial value or (iii) waive the benefits of, or agree to modify in any manner, any exclusivity, confidentiality, standstill or similar agreement benefiting the Company or any of its Subsidiaries;
(j) allow any material Company Permit that was issued to the Company or otherwise relates to the business as conducted by the Company to lapse or terminate;
(k) make any material change in the practices, operations and policies of the Company with respect to (i) the method for, manufacturing, marketing and selling products or services, (ii) the standard terms and conditions of the sale of products or services, including standard prices and standard terms regarding returns and discounts other than in the ordinary course of business, (iii) the maintenance of inventory levels, (iv) the conduct of accounts receivable collection and accounts payable payment activities (or similar cash management or working capital activities and practices) or (v) the method and level of sourcing products;
(l) adopt a plan or agreement of complete or partial liquidation, dissolution or reorganization;
(m) institute, settle, or agree to settle any material Proceeding pending or threatened before any arbitrator, court or other Governmental Authority;
(n) agree to any exclusivity, confidentiality, standstill or non-competition provision or covenant binding on the Company or any of its Subsidiaries;
(o) grant, permit or allow a Lien (other than a Permitted Lien) on any of its assets other than in connection with any renewals, amendments, or restatements of the Company’s existing Indebtedness and to repay and reborrow with respect to such Indebtedness in the ordinary course or in connection with any Indebtedness permitted under subsection (q);
(viiip) make (or fail to make, revoke or amend ) capital expenditures other than in the ordinary course of business;
(q) incur any Tax election, adopt or change any method additional Indebtedness other than in the ordinary course of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Returnbusiness; or
(ixr) authorize any of, or commit or agree to take any of, the foregoing actions other than as provided for in actions. Any of the foregoing provisions of this Section 5.1.6.01 to the contrary notwithstanding, the Company and Seadrift shall be entitled to enter into the Long Term Supply Agreement in the form attached hereto as Exhibit E.
Appears in 1 contract
Conduct of the Business of the Company. The Company Seller covenants and agrees as to itself and its Subsidiaries that, from between the date hereof and the Closing Date (except as otherwise agreed in writing by the Buyer):
(a) the business of this Agreement the Company will be conducted in the ordinary course consistent with past practice;
(b) no amendment will be made to the Articles of Incorporation or Bylaws of the Company;
(c) the Company will use reasonable efforts to keep available the services of its employees and continuing until to preserve the Effective Timegoodwill of the customers, except suppliers and others having business relationships with the Company;
(d) the Company shall promptly advise the Buyer in writing of the commencement or threat of any suit, proceeding or investigation against, relating to or involving the Company or which could otherwise affect the assets or the businesses of the Company and which in each case would, if not covered by insurance and if determined adversely to the Company, have a Material Adverse Effect;
(e) the Company shall advise the Buyer of (i) as expressly contemplated any material adverse change in the assets, liabilities or permitted by this Agreement, financial condition of the Company and (ii) as required by Lawin any event, any condition or state of facts which results in the failure to satisfy any of the conditions of the Buyer's obligations hereunder;
(iiif) to the extent Parent shall otherwise consent in writing (which consent Company shall not be unreasonably withheld, delayed create or conditioned), or (iv) as set forth permit to become effective any Encumbrance on Section 5.1 the assets of the Company Disclosure Letter, the Company (A) shall conduct its business in all material respects only other than Encumbrances created in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to ;
(ig) preserve their business organization intact, preserve the Company Contracts will maintain its current liability, casualty, property and other insurance coverage in full force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, effect;
(iih) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company will not issue any debt securities or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):
(i) (A) issue, sell, purchase or redeem any additional shares of its or any Subsidiary’s capital stock or any Company Security (options, warrants or other than pursuant rights to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends onpurchase, or make any other distributions (whether in cashsecurities convertible into or exchangeable for, stock or property), in respect of, any shares of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(iii) the Company will not declare or pay any dividends on or make any distributions (however characterized) in respect of its Common Stock;
(j) the Company will not repurchase, redeem, retire or otherwise acquire any shares of its Common Stock or split, combine or reclassify its outstanding shares of its Common Stock;
(k) the Company will not make any change in the accounting principles or practices reflected in the Interim Financial Statements other than as required by GAAP or in the Company's methods of applying such principles or processes;
(l) the Company shall not, directly or indirectly, (i) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practiceindebtedness for borrowed money, (Bii) waive, release, grant or transfer any rights of material value, except in the ordinary course of business, consistent (iii) transfer, lease, License, sell, mortgage, pledge, dispose of, or encumber any asset of the Company with past practicea value exceeding $1,000 individually, modifyand/or $5,000 in the aggregate, amend (iv) purchase or terminate acquire any material contract to which interest in any business or any securities or assets of a business, (v) enter into any joint venture or partnership, (vi) settle any material litigation, or (vii) accelerate payments on any indebtedness;
(m) the Company will not, directly or indirectly, (i) increase the compensation payable or to become payable by it to any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors directors, managers or consultants of the Company or any of its Subsidiariesconsultants, (Bii) hire adopt any new employeesadditional, except or make any payment or provision with respect to any, or otherwise amend any, other than as required by existing plans or agreements in the ordinary course of business and consistent with past practice with respect to practice, stock option, bonus, profit sharing, pension, group insurance, severance pay, deferred compensation or other payment or employee compensation plan for the benefit of employees with an annual base salary not to exceed $100,000of the Company, (Ciii) except grant any stock options or stock appreciation rights, (iv) enter into any new, or alter or amend any employment severance, consulting or other compensation agreement with any director, manager, officer, employee or Affiliate of the Company, (v) make any loan or advance to, or enter into any written contract, lease or commitment with, any officer, manager, employee or director of the Company, or (vi) enter into any transactions with any Affiliate of the Company other than as contemplated by this Agreement;
(n) capital expenditures (or commitments to make such expenditures which are not terminable at the extent required option of the Company) shall be incurred by applicable Law or by any existing the Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent accordance with past practice for non-officer employees, pay practices but shall in no event exceed an aggregate of $5,000;
(o) the Seller and the Company will promptly advise the Buyer in writing of any facts or agree circumstances that could give rise to pay a Material Adverse Effect or any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant breach of the representations or warranties with respect to the Seller or the Company, or any breach of a covenant contained herein;
(p) the Company shall not, directly or indirectly, guaranty or otherwise become responsible for any obligation or liability of any third party;
(q) the Company shall not enter into any material contracts (or modify in a material way any such existing contracts) for the purchase or sale of communication services unless such contracts are first approved by the Buyer;
(r) the Company shall not, without the Buyer's written consent, change any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any rate plans for its existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;customers; and
(vis) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) Company will not enter into any contract that limits agreement or otherwise restricts the Company or commitment to do any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; or
(ix) authorize any of, or commit or agree to take any of, the foregoing actions other than as provided for in this Section 5.1foregoing.
Appears in 1 contract
Samples: Stock Purchase Agreement (Avtel Communications Inc/De)
Conduct of the Business of the Company. The Company covenants and agrees as to itself and its Subsidiaries that, from During the date of this Agreement and continuing until the Effective TimePre-Closing Period, except (iw) as set forth in Schedule 6.2, (x) to comply with the Acquired Companies’ obligations under this Agreement (including pursuant to the Internal Reorganization) or as otherwise expressly contemplated or permitted by under this Agreement, (iiy) as required by Lawnecessary to comply with applicable Laws and the Acquired Companies’ Contractual obligations, or (iiiz) to the extent Parent shall otherwise consent in writing with Parent’s Consent (which consent shall not be unreasonably withheld, delayed conditioned or conditioned), or delayed): (ivi) as set forth on Section 5.1 of the Company Disclosure Letter, shall (and cause the Company Acquired Companies to) (A) shall conduct its carry on the Acquired Companies’ business in all material respects only in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall (B) use their respective commercially reasonable best efforts to preserve substantially intact the Acquired Companies’ present business organization, and (iC) preserve their business organization intact, use commercially reasonable efforts to preserve the Company Contracts in force and maintain existing relations and goodwill Acquired Companies’ material relationships with customers, suppliers, distributors, creditorslicensors, lessors, officers, employees, business associates licensees and consultants, others to whom the Acquired Companies have Contractual obligations; and (ii) maintain and keep material properties and assets except as set forth in good repair and conditionSchedule 6.2, (iii) maintain in effect all material governmental Permits pursuant to which the Company shall not (and shall cause the Acquired Companies not to):
(a) amend the Organizational Documents of the Company (except for the adoption of the Company LLC Agreement and other amendments required to effectuate the Internal Reorganization) or any other Acquired Company;
(b) split, combine or reclassify any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; providedcapital stock or issue or authorize the issuance of any other securities in respect of, however, that no action by the Company in lieu of or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):
(i) (A) issue, sell, purchase or redeem any in substitution for shares of its capital stock, or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether other than customary tax distributions) payable in cash, stock or property), other property whether or not in respect ofof the Company Stock or other equity interests;
(c) issue, sell, transfer, pledge, dispose of or encumber any shares of its capital stock, other than dividends and distributions by a direct stock or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition ofsecurities convertible into, or investment insubscriptions, assets rights, warrants or options to acquire, or other Contracts of any character obligating it to issue any such shares or other convertible securities;
(d) enter into or adopt any plan or agreement of complete or partial liquidation or dissolution, or file a voluntary petition in bankruptcy or commence a voluntary Legal Proceeding for reorganization, arrangement, adjustment, release or composition of Indebtedness in bankruptcy or other similar Laws now or hereafter in effect;
(e) incur any indebtedness for borrowed money (other than borrowings under the purchase of supplies or inventory Fortress Facility in the ordinary course of business), consistent with past practiceor guarantee any such indebtedness, or issue or sell any debt securities or guarantee any debt securities of others;
(f) make any capital expenditures, capital additions or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or pricescapital improvements, in excess of $250,000250,000 in the aggregate per month, for each full or partial calendar month in the Pre-Closing Period (other than in the ordinary course of business, consistent accordance with past practice, a budget or (F) enter into any agreement with respect forecast for capital expenditures previously made available to the voting of the capital stock of the Company;
(ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased PropertyParent);
(iiig) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate knowingly waive any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction right of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Acquired Company or under any of its Subsidiaries of less than $250,000Material Contract;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; or
(ix) authorize any of, or commit or agree to take any of, the foregoing actions other than as provided for in this Section 5.1.
Appears in 1 contract
Conduct of the Business of the Company. The Company covenants and agrees as to itself and its Subsidiaries that, from the date of this Agreement and continuing until the Effective Time, except (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) to the extent Unless Parent shall otherwise consent consents in writing (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), or during the period of time from the date of this Agreement until the earlier of (ivx) as set forth on the Merger I Effective Time and (y) the termination of this Agreement in accordance with Section 5.1 of 9.01 (the Company Disclosure Letter“Interim Period”), the Company shall, and shall cause the Company Subsidiary to, (Ai) shall conduct its business business, in all material respects only respects, in the ordinary course of business, business consistent with past practice, and, (ii) comply with all Laws applicable to the extent consistent therewith, it and its Subsidiaries shall use their respective business, assets and employees, (iii) take all commercially reasonable best efforts measures necessary or appropriate to preserve intact, in all material respects, its business organization, to keep available the services of its managers, directors, officers, material employees, and material consultants, and to preserve the possession, control and condition of its material assets, all as consistent with past practice, (iiv) preserve their the goodwill and present business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill relationships (contractual or otherwise) with customers, suppliers, distributors, creditors, lessors, officers, employees, distributors and others having business associates and consultantsdealings with it, (iiv) maintain and keep material properties and assets in good repair and conditionmaterially comply with all Company Contracts, (iiivi) maintain in effect pay all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates applicable Taxes as such Taxes become due and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provisionpayable, and (Bvii) shall notmaintain all existing Permits applicable to it or its business, operations, properties or assets. In addition, without limiting the generality of the foregoing provisions of this Section 6.02, and shall cause each Subsidiary not tosubject in all respects to the foregoing provisions of this Section 6.02, during the Interim Period, without Parent’s the prior written consent of Parent (which consent shall not be unreasonably withheld, delayed conditioned or conditioned):delayed), the Company shall not, directly or indirectly, do any of the following or cause or permit the Company Subsidiary to do any of the following:
(ia) amend, waive or otherwise change, in any respect, any of the Company Charter Documents or the Company Charter Documents, except as required by applicable Law;
(Ab) authorize for issuance, issue, grant, sell, purchase pledge, dispose of or redeem propose to issue, grant, sell, pledge or dispose of any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms equity securities of any Company Plan Entity (including the Company Shares) or any awards made under the Company Equity Plansconvertible securities other than those issuances, grants, and pledges set forth on Schedule 6.02(b);
(c) make, (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock stock, property or property), otherwise) in respect of, the equity interests of any Company Entity (including the Company Shares) or the Company Subsidiary;
(d) incur, create, assume, prepay or otherwise become liable for any Indebtedness in excess of its capital stock$50,000 individually or $150,000 in the aggregate, or make a loan or advance to or investment in any third party, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, 50,000 individually or $150,000 in the aggregate;
(e) other than in the ordinary course of business, consistent with past practice: (i) increase the wages, salaries or compensation of its employees in the aggregate by more than nine percent (9%) (without reference to any corresponding increases to bonus compensation to the extent such bonus compensation is calculated as a percentage of base compensation), (ii) make or commit to make any bonus payment (whether in cash, property or securities) to any employee or materially increase other benefits of employees generally, or (Fiii) enter into, establish, materially amend or terminate any Benefit Plan with, for or in respect of any current consultant, officer, manager, director or employee, other than as required by applicable Law or pursuant to the terms of any existing Benefit Plans;
(f) other than in the ordinary course of business consistent with past practice: (i) transfer or license any material Intellectual Property or (ii) materially amend or modify, permit to lapse or fail to preserve any material Intellectual Property Registration or Licensed Intellectual Property, or (C) disclose to any Person who has not entered into a confidentiality agreement any Trade Secrets;
(g) terminate, or waive or assign any material right under, any material Company Contract, amend, extend or renew any material Company Contract, or enter into any Contract that would be a material Company Contract, in any case outside of the ordinary course of business consistent with past practice;
(h) (i) enter into any agreement with respect to the voting of any Company Securities (including the capital stock of Company Shares) or Company Subsidiary Securities; (ii) split, combine or reclassify any Company Securities (including the CompanyCompany Shares) or Company Subsidiary Securities; or (iii) purchase, redeem or otherwise acquire any Company Securities (including the Company Shares) or Company Subsidiary Securities;
(iii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make acquire or agree to make acquire (i) by merging or consolidating with, or by purchasing a substantial equity interest in or portion of the assets of, or by any new capital expenditure in excess of $250,000 other manner, any business or thatany corporation, limited liability company, partnership, joint venture, association or other business organization or division thereof or (ii) any assets that are material, individually or in the aggregate, are to the Company, except in excess the case of $500,000clause (ii) in the ordinary course of business consistent with past practice;
(j) make, change or rescind any material Tax election, change its method of Tax accounting, prepare or file any Tax Returns in a manner that is inconsistent with the past practices of the Company with respect to the treatment of items on such Tax Returns, incur any material liability for Taxes other than in the ordinary course of business, consistent file an amended Tax Return or a claim for refund of Taxes with past practicerespect to the income, operations or property of the Company, compromise or settle any Tax Proceedings, consent to any extension or waiver of the limitation period applicable to any Tax Proceedings, enter into any agreement with any Governmental Authority (Bincluding a “closing agreement” under Code Section 7121) with respect to any Tax matter, apply for or request any Tax ruling or take any other affirmative action with respect to any Governmental Authority that could reasonably be expected to negatively affect Parent or the Surviving Entity;
(k) make any change in accounting methods, principles or practices, except insofar as may have been required by a change in the ordinary course of businessGAAP;
(l) sell, consistent with past practicelease, modifylicense, amend mortgage, sell and leaseback or terminate otherwise encumber or subject to any material contract to which the Company Lien (other than any Permitted Lien), or otherwise dispose of, any of its Subsidiaries is a party material properties or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company assets or any of its Subsidiaries of less than $250,000;
interests therein (v) (A) except (1) to the extent required by applicable Law whether tangible or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employeesintangible), except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000practice;
(m) (i) pay, (C) except to the extent required by applicable Law discharge or by satisfy any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (material liabilities, other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employeesthe payment, pay discharge or agree to pay any pensionsatisfaction, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice or in accordance with an annual base rate their terms, of salary not to exceed $100,000 liabilities reflected or (E) enter into or adopt any newreserved against in, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement)contemplated by, amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company Interim Financial Statements or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made incurred in the ordinary course of business consistent with past practice)practice after the date of the Latest Balance Sheet, or (ii) cancel any material Indebtedness (individually or in the aggregate) or waive any claims or rights of substantial value;
(viiin) makeallow any Permit that was issued to any Company Entity that otherwise relates to its business or assets to lapse or terminate;
(o) layoff or terminate employees that could result in liability under the WARN Act;
(p) fail to keep in force the Insurance Policies or replacement or revised policies providing insurance coverage with respect to the assets, revoke operations and activities of any Company Entity as are currently in effect;
(q) adopt a plan or amend agreement of complete or partial liquidation, dissolution or reorganization;
(r) institute, settle, or agree to settle any Tax electionProceeding pending or threatened;
(s) agree to any exclusivity, adopt confidentiality, standstill or change non-competition provision or covenant binding on any method of accounting, extend Company Entity or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; or
(ix) authorize any benefits of, or commit agree to modify in any manner, any exclusivity, confidentiality, standstill or similar agreement benefiting any Company Entity;
(t) grant, permit or allow a Lien (other than a Permitted Lien) on any of its material assets;
(u) make (or fail to make) capital expenditures other than in the ordinary course of business;
(v) make any material changes in policies, procedures or practices with respect to credit, collection, payment, accounts receivable or accounts payable, except, in each case, to the extent required to conform with GAAP; and
(w) authorize or agree to take do any of, of the foregoing actions other than as provided for things described in any of clauses (a) through (v) of this Section 5.16.02.
Appears in 1 contract
Conduct of the Business of the Company. The Except as (i) contemplated by this Agreement and (ii) as set forth on the Company covenants Disclosure Schedule, after the date hereof and prior to the Appointment Time, the Company agrees as to itself and its Subsidiaries that, from the date of this Agreement and continuing until the Effective Time, that (except (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) to the extent that Parent shall otherwise consent in writing (consent, which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure Letter, the Company (A) shall conduct its business in all material respects only in operations according to the ordinary course of business, business consistent with past practice, andand will use commercially reasonable efforts to preserve intact its present business organization, to keep available the extent consistent therewithservices of its present officers and employees and to maintain satisfactory relationships with licensors, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customerslicensees, suppliers, contractors, distributors, creditorscustomers and others having business relationships with it. Without limiting the generality of the foregoing, lessorsduring the period from the date of this Agreement to the Appointment Time, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which neither the Company or nor any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not toshall, without Parent’s the prior written consent (of Parent, which consent shall not be unreasonably withheld, delayed or conditioned)::
(i) (A) issue, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (Ca) declare, set aside or pay any dividends ondividend or other distribution with respect to any shares of capital stock of the Company, or make repurchase, redeem or acquire any other distributions (whether in cash, outstanding shares of capital stock or property), in respect other equity securities of, or other ownership interests in, the Company or any Subsidiary of its capital stock, other than dividends and distributions by a direct the Company or indirect wholly owned Subsidiary to its parent, effect any stock split (Dforward or reverse) amend or otherwise change its capitalization or capital structure in any Subsidiary’s certificate manner from the way it existed on the date hereof;
(b) amend any provision of the Certificate of Incorporation or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition Bylaws of, or investment inany material term of any outstanding security issued by, assets the Company or any Subsidiary (other than any wholly owned Subsidiary) of the purchase of supplies Company;
(c) incur, assume or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or guarantee any indebtedness for borrowed money other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, than borrowings under existing short term credit facilities not in excess of $250,00025,000 in the aggregate;
(d) change any method of accounting or accounting practice by the Company or any Subsidiary of the Company, except for any such change required by reason of a change in GAAP;
(e) (i) grant any severance or termination pay to any director, officer or employee of the Company or any Subsidiary of the Company, (ii) enter into any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any director, officer or employee of the Company or any Subsidiary of the Company, (iii) increase benefits payable under any existing severance or termination pay policies or employment agreements or (iv) increase compensation, bonus or other benefits payable to directors, officers or employees of the Company or any Subsidiary of the Company, in each case other than in the ordinary course of businessbusiness consistent with past practice;
(f) issue any Company Securities or the securities of any Subsidiary of the Company other than (i) pursuant to Company Options, warrants or other Common Stock equivalents outstanding as of the date of this Agreement, and (ii) pursuant to the Company ESPP;
(g) acquire, dispose of or license assets material to the Company and its Subsidiaries, except for sales of inventory in the ordinary course of business consistent with past practice, or acquire or dispose of capital stock of any third party, merge or consolidate with any third party;
(Fh) enter into any joint venture, partnership or similar agreement with respect to the voting of the capital stock of the Companyany Person other than a wholly owned Subsidiary;
(iii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which of the Company Company's or any of its Subsidiaries is a party Subsidiaries' Material Contracts, or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse under any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company Company's or Parentany of its Subsidiaries' Material Contracts, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of except in the ordinary course of business, consistent ;
(j) make any Tax election inconsistent with past practicepractice that, individually or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by would adversely affect in any material respect the Company Tax liability or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants Tax attributes of the Company or any of its Subsidiaries, (B) hire any new employees, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with taken as a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any newwhole, or materially increase benefits under settle or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate compromise any existing, Company Plan or benefit arrangement or any collective bargaining agreementmaterial Tax liability;
(vik) except as required by GAAP settle, compromise or under applicable Law and as concurred with by the Company’s independent auditorsotherwise terminate any litigation, make any material change in accounting methods, principles claim or practicesother settlement negotiation;
(viil) fail to maintain insurance covering the Company's or its Subsidiaries' material properties and assets under substantially similar terms and conditions as the Company's or its Subsidiaries', as applicable, current policies;
(m) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax ReturnMaterial Contract; or
(ixn) authorize any ofauthorize, or commit or agree to take any of, of the foregoing actions except as otherwise permitted by this Agreement. Notwithstanding the foregoing or anything contained herein to the contrary, from the date hereof to the Appointment Time, the Company shall confer with Parent and its Representatives, at such times as they may request, as to operational and integration matters, and promptly notify the same of any change in the normal course of any business, operations or financial condition of the Company, its Subsidiaries or their respective assets or properties, or any emergency related thereto. Without limiting the generality of the foregoing, the Company shall promptly notify Parent of (i) any discussions or actions (of any type, preliminary or otherwise) relating to bankruptcy of the Company or its Subsidiaries, (ii) any complaints, investigations or hearings (or communications indicating that the same may be contemplated) of any Governmental Entity, (iii) any material loss of or damage to any property, (iv) any material change in material existing relationships with outside third parties, (v) the institution or threat of any material litigation that could affect the Company (vi) the failure of the Company to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it pursuant to this Agreement or (vii) any other than as provided for matter that could result in this Section 5.1a Material Adverse Effect.
Appears in 1 contract
Samples: Offer Agreement (Earthlink Inc)
Conduct of the Business of the Company. The Company covenants and agrees as Prior to itself and its Subsidiaries that, from the date of this Agreement and continuing until the Effective Time, except (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) to Agreement and except for the extent Parent matters set forth in SCHEDULE 5.3 or unless Merger Sub shall otherwise consent have previously agreed in writing (which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure Letterwriting, the Company (A) shall, and shall conduct cause its business Subsidiary to, cause the Property to be operated and maintained in a professional manner and to carry on their respective businesses in the usual, regular and ordinary course in accordance in all material respects only in the ordinary course of business, consistent with past practicepractice and in accordance with all applicable laws, andand shall, to the extent consistent therewithand shall cause its Subsidiary to, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve intact the Company's status as a REIT within the meaning of the Code, to preserve intact their present business organizations and properties, and keep available the services of their employees and preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill relationships with customers, suppliers, distributorstenants and others having business dealings with them. Without limiting the generality of the foregoing, creditorsand except as contemplated by this Agreement, lessorsincluding Section 2.5, officersand except for the matters set forth in SCHEDULE 5.3, employeesprior to the Effective Time unless Parent shall otherwise have previously agreed in writing, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, not and shall cause each not permit its Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned)::
(i) (A) issue, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (Cw) declare, set aside aside, or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than (1) dividends and distributions by a direct or indirect wholly owned the Company's Subsidiary to its parentthe Company, (D2) the Special Dividend and (3) if the Closing occurs after December 23, 2005, the 2005 Dividend, (x) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, (y) purchase, redeem or otherwise acquire, any shares of capital stock of the Company or its Subsidiary or any other equity securities thereof or any rights, warrants, or options to acquire any such shares or other securities or (z) create any subsidiaries;
(ii) issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, any other voting securities of the Company or any securities convertible into, or any rights, warrants or options to acquire, any such shares or voting securities;
(iii) amend its declaration of trust, by-laws or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent other comparable organizational documents);
(iv) acquire or agree to acquire (x) by merging or consolidating with, (E) make any acquisition or by purchasing a substantial portion of the assets of, or investment inby any other manner, assets (other than the purchase of supplies any business or inventory in the ordinary course of businessany corporation, consistent with past practice) or stock (whether by way of mergerpartnership, consolidationjoint venture, tender offer, share exchange association or other activitybusiness organization or division thereof, or (y) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, assets other than in the ordinary course of business, consistent with past practicepastpractice and in accordance with the budget provided to Parent;
(i) sell, contribute, assign or create any right, title or interest whatsoever in or to the Property, (Fii) cause any Lien, assessment, obligation, interest, encroachment or liability whatsoever (other than the Company Permitted Encumbrances) to be placed or remain of record against the Property, and (iii) knowingly impair or modify in any material respect the status of title to (or the legal description of) the Property;
(vi) except for the Telco Stores Lease, (1) enter into any agreement with respect new (or extend, renew or replace any existing) lease, agreement, service contract, employment contract, permit or obligation affecting the Property, (2) change, alter, file for, pursue, accept or obtain any zoning, land use permit or other development approval or entitlement, (3) consent to the voting inclusion of any portion of the Property into any special district or (4) terminate any Space Lease or Service Contract (other than upon expiration of such Tenant Lease or Service Contract pursuant to its terms); PROVIDED, HOWEVER, that the Company may enter into any service or similar contract without Merger Sub's approval if such contract is entered into in the ordinary course of the Company business and is terminable without penalty or premium on not more than 30 days' notice from the owner of the Property and is disclosed promptly in writing to Merger Sub; PROVIDED, FURTHER, that with the prior consent of the Parent, the Company may enter into new leases;
(vii) make or rescind any material election relating to Taxes (unless the Company reasonably determines that such action is required by law or necessary to preserve the Company's status as a REIT);
(viii) (A) change in any material respect (except as may be required by law) any of its methods, principles, or practices of accounting in effect or (B) settle or compromise any Action, audit or controversy relating to Taxes, or change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of its federal income Tax Return for the taxable year ending December 31, 2002, except as may be required by the SEC, changes in applicable law or GAAP;
(ix) (x) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of another person (other than indebtedness to, guarantees of, or issuances or sales to the Company or a wholly-owned Subsidiary of the Company), or enter into any "keep well" or other agreement to maintain any financial condition of another person, or (y) make any loans, advances or capital stock contributions to, or investments in, any other person, other than to the Company or any direct or indirect subsidiary of the Company;
(iix) incur enter into or modify in any Indebtedness material respect any employment, severance, termination or sellsimilar agreements or arrangements with, leaseor grant any bonuses, subleasesalary increases, license severance or permit to be subject termination pay to, any officer, director, consultant or employee or otherwise increase the compensation or benefits provided to any Lienofficer, other than a Permitted Liendirector, consultant or employee;
(xi) accelerate the vesting or payment of the compensation payable or the benefits provided or to become payable or provided to any of its, or any of its subsidiaries', current or former directors, officers, employees or consultants, or otherwise dispose of pay any of its material properties or assets (including, without limitation, any amounts not due such individual under an existing Company Owned Real Property or any Company Ground Leased Property)Benefit Plan;
(iii) (Axii) enter into into, adopt or amend in any new line material respect any employee benefit plans, programs and other arrangements providing benefits to any employee or former employee or to any beneficiary or dependent thereof, and whether covering one individual or more than one individual, except as shall be required by Applicable Laws;
(xiii) settle any Actions, whether now pending or made or brought after the date of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, this Agreement;
(Bxiv) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company terminate, or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parentwith respect to, any material trade secretContract, Service Contract or Space Lease;
(ivxv) discharge, settle, compromise, assign make any payments in respect of policies of directors' and officers' liability insurance (premiums or satisfy any claim, whether or not pending before a Governmental Entity, (Aotherwise) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result other than premiums paid in payments (individually and not in the aggregate), net of insurance, by the Company or any respect of its Subsidiaries of less than $250,000;
(v) (A) except (1) current policies or a renewal thereof to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase set forth in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practiceSCHEDULE 5.7(B);
(viiixvi) maketake any action to exempt or make not subject to any Takeover Statutes;
(xvii) on the Closing Date, revoke make any payment, issue any checks, or amend initiate any Tax electiontransfers;
(xviii) accelerate the receipt of amounts due with respect to trade accounts receivable or any other accounts receivable, adopt or change lengthen the period for payment of accounts payable;
(xix) take any method of accounting, extend action that could likely result in a violation or waive the application breach of any statute agreement, covenant, representation or warranty contained in this Agreement;
(xx) allow any pending applications for approval or permit in connection with the Property to be withdrawn or permitted to lapse without Merger Sub's consent, (and the Company shall promptly notify Merger Sub of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Returnall pending applications); or
(ixxxi) authorize any of, or commit or agree to take any of, the foregoing actions other than as provided for in this Section 5.1actions.
Appears in 1 contract
Samples: Merger Agreement (Kimco Realty Corp)
Conduct of the Business of the Company. The Company covenants Shareholders covenant and agrees as to itself and its Subsidiaries agree with Buyer that, from between the date hereof and the Closing Date (except as otherwise agreed in writing by Buyer, including transactions and other matters specifically authorized by this Agreement):
(a) the business of this Agreement the Company and continuing until each Subsidiary will be conducted diligently and only in the Effective Timeordinary course consistent with past practice, including, without limitation, the payment of any Indebtedness (as defined in Section 2.1), the collection of receivables, purchase of inventory, cash management, provision of services, payment of payables and incurrence of and payment or financing of capital expenditures;
(b) no change will be made in the Articles of Incorporation or By-Laws, or other charter documents of the Company or any Subsidiary;
(c) the Shareholders and the Company shall use their commercially reasonable efforts to preserve the assets, business and goodwill of the Company and each Subsidiary, to keep available the services of the present employees of the Company and each Subsidiary and to preserve the goodwill of the Company's and each Subsidiary's customers, suppliers and others having business relationships with the Company and the Subsidiaries, provided that the Company and the Subsidiaries shall not be authorized (without the prior written consent of Buyer) to make any commitment on behalf of Buyer;
(d) the Company and the Subsidiaries shall not announce or institute any increase in the salary, commission or other compensation (including bonus) rates payable or to become payable by the Company or any Subsidiary to any employee or agent of the Company or any Subsidiary, or, except as set forth in Section 4.17(a) of the Disclosure Schedule, approve, adopt, amend or modify any Benefit Plan or similar plan, agreement or arrangement, except pursuant to the terms of any contract or agreement to which the Company or the Subsidiaries are a party and which is listed in any section of the Disclosure Schedule, or pursuant to existing policies and practices of the Company and the Subsidiaries as described in Section 6.1(d) of the Disclosure Schedule;
(e) the Company and the Subsidiaries shall not enter into any contract or commitment, or series of related contracts or commitments (except for Purchase Orders), unless such contract or commitment, or series of related contracts or commitments, (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) to the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure Letter, the Company (A) shall conduct its business in all material respects only arises in the ordinary course of business, and (ii) involves expenditures or revenues of less than $20,000 in the aggregate;
(f) the Shareholders shall promptly advise Buyer in writing of the commencement or threat of any suit, proceeding or investigation against, relating to or involving the Company or any Subsidiary or which could otherwise affect the assets or the business of the Company or any Subsidiary, whether or not covered by insurance;
(g) the Shareholders shall promptly advise Buyer in writing of (i) any material adverse change in the assets, liabilities, financial condition, business, operations or prospects of the Company or any Subsidiary and (ii) any event, condition or state of facts which will or may result in the failure to satisfy any of the conditions in Article VIII hereof;
(h) the Company shall not create or permit to become effective any Encumbrance on the assets, tangible or intangible, of the Company or any Subsidiary, except in the ordinary course of business consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):;
(i) the Company and the Subsidiaries shall maintain their current liability, casualty, property and other insurance coverages in full force and effect without reduction in coverage;
(Aj) issue, sell, purchase or redeem the Company and the Subsidiaries shall not issue any additional shares of its capital stock or other equity interests or any options, warrants or other rights to purchase, or securities convertible into or exchangeable for, shares of capital stock of the Company or other equity interests or any Subsidiary’s capital stock or any Company Security ;
(other than pursuant to the terms of any Company Plan or any awards made under k) except as contemplated by Section 2.7, the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside and the Subsidiaries shall not declare or pay any dividends on, on or make any other distributions (whether however characterized) in cashrespect of shares of their capital stock;
(l) the Company and the Subsidiaries shall not repurchase or redeem any shares of their capital stock;
(m) the Company and the Subsidiaries shall not organize any new subsidiary, acquire any capital stock or propertyother equity security of any corporation or acquire any equity or other ownership interest in any business;
(n) the Company and the Subsidiaries shall not make any change in the accounting principles or practices reflected in the Financial Statements or in their methods of applying such principles or practices;
(o) the Company and the Subsidiaries shall not incur any indebtedness, liability or obligation (whether absolute, contingent or otherwise), in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory except in the ordinary course of business, business and consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) practice and not in any transaction or any series event consisting of related transactions indebtedness for an aggregate purchase price or prices, in excess of $250,000, borrowed money (other than advances under existing credit facilities in the ordinary course of business, business and consistent with past practice), or (F) enter into guarantee, or act as surety, indemnitor, co-signer or accommodation party for, any agreement with respect indebtedness, liability or obligation of any third party, except for liability due to endorsement of checks in the voting normal course of the capital stock of the Companycollection;
(iip) incur the Company and the Subsidiaries shall not make any Indebtedness capital expenditure or commitment in excess of $20,000.00 or make aggregate capital expenditures or commitments in excess of $50,000.00;
(q) except as set forth on Section 6.1(q) of the Disclosure Schedule, the Company and the Subsidiaries shall not cancel any debts or waive any claims or rights of value;
(r) the Company and the Subsidiaries shall not sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, transfer or otherwise dispose of any of its their material properties or assets (includingreal, without limitationpersonal or mixed, any Company Owned Real Property tangible or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (Bintangible) except in the ordinary course of business, business and consistent with past practice, modify, amend or terminate any material contract to which practices;
(s) the Company and the Subsidiaries shall not dispose of or permit to lapse any right to the use of its Subsidiaries is a party any patent, trademark or knowingly waivecopyright (or application therefor), release trade name, service xxxx or assign any material rights or claims thereunder, or (C) dispose of, grant brand name or permit to lapse any material Company Intellectual Property Rights license, service xxxx or brand name permit or form of authorization, or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, person any material trade secret, formula, process or know-how not theretofore a matter of public knowledge;
(ivt) dischargethe Company and the Subsidiaries shall not pay, settleloan or advance any amount to, compromiseor sell, assign transfer or satisfy lease any claimproperties or assets to, whether or not pending before a Governmental Entityenter into any agreement or arrangement with, (A) outside of any Related Party, except for directors' fees and compensation and expense advances and reimbursements to officers and employees, in each case in the ordinary course of business, business and consistent with past practice, or practices;
(Bu) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company and the Subsidiaries shall not enter into any lease (as lessor or lessee) of real property or enter into any contract, arrangement, license or lease of its Subsidiaries of less than $250,000personal property;
(v) the Company and the Subsidiaries shall not change any of their current banking relationships;
(Aw) except the Company and the Subsidiaries shall not terminate, amend or fail to perform any obligation under any material contract, lease, commitment or license;
(1x) the Company and the Subsidiaries shall comply in all material respects with all laws applicable to the extent them and their properties, operations, business and employees and shall file all required tax returns and other reports required by applicable Law any governmental agency or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or authority;
(2y) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by neither the Company or nor any of its Subsidiaries to shall engage in any activity which would accelerate or delay the collection of the employees, officers, directors accounts or consultants notes receivable of the Company or any of its Subsidiaries, accelerate or delay the payment of the accounts payable of the Company or any of its Subsidiaries, or reduce or otherwise restrict the amount of the inventory (Bincluding raw material, packaging, work-in-process, or finished goods) hire of the Company or any new employeesof its Subsidiaries on hand, in each case, other than in the ordinary course of the conduct of the Company's business;
(z) except as specifically authorized by Section 2.7 of this Agreement, neither the Company nor any of its Subsidiaries shall forgive, cancel or waive any rights or any debts or other material obligations owed to the Company or any of its Subsidiaries, except in the ordinary course of business consistent with past practice with in respect of (A) receivables owed by customers of the Company or its Subsidiaries arising from the sale of goods sold by the Company or its Subsidiaries to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or such customers in the ordinary course of business business, and (other than in connection with a Company-instituted reduction in forceB) consistent with past practice for non-officer employeesthe cancellation or forgiveness of amounts due from employees relating to advances, pay or agree to pay any pensionreimbursements and similar arrangements, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant the aggregate amount of which does not exceed $150,000; and
(aa) the Company or any of its Subsidiaries, whether past or present, (D) except to and the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary Subsidiaries shall not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits agreement or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; or
(ix) authorize any of, or commit or agree commitment to take any of, the foregoing actions other than as provided for in action prohibited under this Section 5.16.1.
Appears in 1 contract
Conduct of the Business of the Company. The Company covenants and agrees Except as to itself and its Subsidiaries that, from the date of this Agreement and continuing until the Effective Time, except (i) as expressly otherwise provided in or contemplated or permitted by this Agreement, the Schedules hereto or on Schedule 5.1, prior to the Closing Date, the Sellers shall cause the Company to (i) conduct the business of the Company in accordance with present policies (including existing underwriting standards) and in the ordinary course of business, (ii) as required by Lawto use commercially reasonable efforts to preserve the Company's business organizations intact, and (iii) consistent with the exercise of reasonable business judgment: (A) retain the goodwill of the Company and preserve the business relationships of Company with policyholders and others, including agents, lenders, suppliers, licensors and licensees, insurance departments, and others having material business dealings with the Company, (B) maintain all existing business permits, licenses and authorizations, (C) timely perform all of its obligations under all contracts relating to or affecting its assets or its business, and (D) maintain its books and records in the extent Parent usual manner consistent with past practice. From and after the date hereof until the earlier of the Closing Date or termination hereof, except as otherwise provided in or contemplated by this Agreement or the Schedules hereto, the Sellers shall otherwise consent in writing (cause the Company not to, without the prior written approval of Buyer, which consent shall not be unreasonably withheld, delayed conditioned or conditioned)delayed:
(a) guaranty the obligation of any person, firm, corporation or other entity, (iv) as set forth on Section 5.1 of except surety bonds issued by the Company Disclosure Letter, in the Company (Anormal course of business) shall conduct its business in all material respects only and except by the endorsement of negotiable instruments for deposit or collection in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):;
(ib) (A) issuemortgage, sellpledge, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends onlease, or make subject to any voluntary Lien, charge or other distributions encumbrance any assets, properties or business of the Company;
(whether in cash, stock or property), in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (Dc) amend sell or otherwise change its transfer any asset, property or business or cancel any Subsidiary’s certificate debt or articles of incorporation claim or bylaws (or equivalent organizational documents), (E) make waive any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000right, other than in the ordinary course of businessbusiness of such Company;
(d) amend or cancel or agree to the amendment or cancellation of any reinsurance agreement, consistent with past practice, treaty or arrangement;
(Fe) enter into permit to lapse any agreement right with respect to any trademark, trade name, copyright or other intangible asset material to the voting Company;
(f) permit any material insurance policy naming it as a beneficiary or a loss payable payee to be canceled or terminated or any of the coverage thereunder to lapse unless simultaneously with such termination or cancellation replacement policies, providing substantially equivalent coverage, are in full force and effect;
(g) make any material change in any of its present tax or financial accounting methods and practices, except as required by changes in GAAP or requirements of the Massachusetts Division of Insurance, as the case may be;
(h) amend its charter or bylaws;
(i) issue, sell or deliver any shares of the capital stock of the Company or issue or sell any securities convertible into, or exchangeable for, or options with respect to, or warrants to purchase or rights to subscribe to, any shares of the capital stock of the Company;
(iij) incur effect any Indebtedness or sellrecapitalization, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lienreclassification, or otherwise dispose like change in capitalization of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property)the Company;
(iiik) merge the Company with or into, consolidate or otherwise combine with, or acquire all or substantially all of the assets of, any other entity; and
(Al) declare, pay or make, or set aside for payment or make, any dividend or other distribution (whether in cash or in kind) in respect of the capital stock of the Company or redeem, purchase or otherwise acquire any of the Company's capital stock without the Buyer's consent;
(m) increase the compensation paid directly or indirectly to any officer, director or party to this Agreement; or
(n) enter into any new line of business agreement or make or agree understanding to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to do any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, things described in clauses (Ba) hire any new employees, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, through (Cm) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; or
(ix) authorize any of, or commit or agree to take any of, the foregoing actions other than as provided for in this Section 5.1above.
Appears in 1 contract
Conduct of the Business of the Company. The Company covenants Shareholders covenant and agrees as to itself and its Subsidiaries agree with the Buyer that, from between the date hereof and the Closing Date (except as otherwise agreed in writing by the Buyer):
(a) the business of the Company and each Subsidiary will be conducted diligently and only in the ordinary course consistent with past practice;
(b) no change will be made in the Articles of Incorporation, By-Laws or other charter documents of the Company or any Subsidiary;
(c) subject to the limitations elsewhere in this Agreement Agreement, the Shareholders and continuing until the Effective TimeCompany shall use their reasonable best efforts to preserve the assets, business and goodwill of the Company and each Subsidiary, to keep available the services of the present employees of the Company and each Subsidiary and to preserve the goodwill of the Company's and each Subsidiary's customers, suppliers and others having business relationships with the Company and the Subsidiaries, provided that the Company and the Subsidiaries shall not be authorized (without the prior written consent of the Buyer) to make any commitment on behalf of the Buyer;
(d) the Company and the Subsidiaries shall not announce or institute any increase in the salary, commission or other compensation (including bonuses) rates payable or to become payable by the Company or any Subsidiary to any employee or agent of the Company or any Subsidiary, or approve, adopt, amend or modify any Benefit Plan or similar plan, agreement or arrangement, except pursuant to the terms of any contract or agreement to which the Company or the Subsidiaries are a party and which is listed in any section of the Disclosure Schedule, or pursuant to existing policies and practices of the Company and the Subsidiaries as described in Section 6.1(d) of the Disclosure Schedule;
(e) the Company and the Subsidiaries shall not enter into any contract or commitment, or series of related contracts or commitments (except for Purchase Orders), unless such contract or commitment, or series of related contracts or commitments, (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) to the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure Letter, the Company (A) shall conduct its business in all material respects only arises in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets involves expenditures or revenues of less than $25,000 in good repair and conditionthe aggregate;
(f) the Shareholders shall promptly advise the Buyer in writing of the commencement or threat of any suit, (iii) maintain in effect all material governmental Permits pursuant proceeding or investigation against, relating to which or involving the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; providedSubsidiary which, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):
(i) (A) issue, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to had it existed on the date of this Agreement that Agreement, would have been required to be disclosed or made available to Parent or on Section 3.9 of the Disclosure Schedule;
(2g) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce the Shareholders shall promptly advise the Buyer in writing of (i) any stock option, equity or incentive awards or the increase material adverse change in the salariesassets, bonuses liabilities, financial condition, business, operations or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants prospects of the Company or any Subsidiary and (ii) any event, condition or state of its Subsidiariesfacts which will or may reasonably be expected to result in the failure to satisfy any of the conditions in Article VIII hereof;
(h) the Company shall not create or permit to become effective any Encumbrance on the assets, (B) hire tangible or intangible, of the Company or any new employeesSubsidiary, except in the ordinary course of business consistent with past practice with practice;
(i) the Company and the Subsidiaries shall maintain their current liability, casualty, property and other insurance coverages in full force and effect without reduction in coverage;
(j) the Company and the Subsidiaries shall not issue any additional shares of capital stock or any options, warrants or other rights to purchase, or securities convertible into or exchangeable for, shares of capital stock of the Company or any Subsidiary;
(k) the Company and the Subsidiaries shall not declare or pay any dividends on or make any other distributions (however characterized) in respect to employees with an annual base salary of shares of their capital stock;
(l) the Company and the Subsidiaries shall not to exceed $100,000repurchase or redeem any shares of their capital stock;
(m) the Company and the Subsidiaries shall not organize any new subsidiary, acquire any capital stock or other equity security of any corporation or acquire any equity or other ownership interest in any business;
(Cn) the Company and the Subsidiaries shall not make any change in the accounting principles or practices reflected in the Financial Statements or in their methods of applying such principles or practices; and
(o) the Company and the Subsidiaries shall not incur any indebtedness, liability or obligation (whether absolute, contingent or otherwise), except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) and consistent with past practice and not in any event consisting of indebtedness for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or borrowed money (other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any than advances under existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees credit facilities in the ordinary course of business and consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any newpractice), or materially increase benefits under guarantee, or renew (other than automatic renewals pursuant act as surety, indemnitor, co-signer or accommodation party for, any indebtedness, liability or obligation of any third party, except for liability due to an existing Company Plan or written agreement existing on endorsement of checks in the date normal course of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreementcollection;
(vip) except as required by GAAP or under applicable Law the Company and as concurred with by the Company’s independent auditors, Subsidiaries shall not make any material change capital expenditure or commitment in accounting methodsexcess of $25,000.00, principles or practiceswith the exception of the planned capital expenditures identified on Section 5.1 of the Disclosure Schedule;
(viiq) enter into the Company and the Subsidiaries shall not cancel any contract that limits debts or waive any claims or rights of value other than write- offs of accounts receivable (including non-sufficient fund checks) in the ordinary course of business;
(r) the Company and the Subsidiaries shall not sell, transfer or otherwise restricts the Company or any dispose of its Subsidiaries or any of their respective Affiliates material properties or any successor thereto from engaging assets (real, personal or competing in any line of business mixed, tangible or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made intangible) except in the ordinary course of business and consistent with past practice)practices, and in any event shall not dispose of or transfer any shares of the stock of the Buyer;
(viiis) makethe Company and the Subsidiaries shall not dispose of or permit to lapse any right to the use of any patent, revoke trademark or amend copyright (or application therefor), trade name, service mark or brand name or permit to lapse any Tax electionmaterial license, adopt servixx xark or brand name permit or form of authorization, or dispose of xx disclose to any person any trade secret, formula, process or know-how not theretofore a matter of public knowledge;
(t) the Company and the Subsidiaries shall not pay, loan or advance any amount to, or sell, transfer or lease any properties or assets to, or enter into any agreement or arrangement with, any Related Party, except for directors' fees and compensation and expense advances and reimbursements to officers and employees, in each case in the ordinary course of business and consistent with past practices;
(u) except for the Revised Leases, the Company and the Subsidiaries shall not enter into any lease (as lessor or lessee) of real property or enter into any contract, arrangement, license or lease of personal property;
(v) the Company and the Subsidiaries shall not change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; ortheir current banking relationships;
(ixw) authorize the Company and the Subsidiaries shall not terminate, amend or fail to perform any ofobligation under any material contract, lease, commitment or commit license;
(x) the Company and the Subsidiaries shall comply in all material respects with all laws applicable to them and their properties, operations, business and employees and shall file all required tax returns and other reports required by any governmental agency or agree authority that are required to be filed on or prior to the Closing Date;
(y) the Company and the Subsidiaries shall not enter into any agreement or commitment to take any of, the foregoing actions other than as provided for in action prohibited under this Section 5.1.
Appears in 1 contract
Conduct of the Business of the Company. The Company covenants and agrees Except as contemplated by this Agreement or to itself and its Subsidiaries thatthe extent that Shoeinvest shall otherwise consent in writing, during the period from the date of this Agreement and continuing until the Effective Time, except (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) to the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure LetterClosing, the Company (A) shall will conduct its business in all material respects operations only in the ordinary course of businessin, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or will not take any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):
(i) (A) issue, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which business and the Company will use all reasonable efforts to preserve intact in all material respects its business organizations, assets, prospects and advantageous business relationships, to keep available the services of its officers and key employees and to maintain satisfactory relationships with its licensors, licensees, suppliers, contractors, distributors, customers and others having advantageous business relationships with it. Without limiting the generality of the foregoing, except as contemplated by this Agreement, the Company will not, without the prior written consent of Shoeinvest:
(a) amend its Charter Documents;
(b) split, combine or reclassify any shares of its capital stock, declare, pay or set aside for payment any dividend or other distribution in respect of its capital stock, or directly or indirectly, redeem, purchase or otherwise acquire any shares of its capital stock or other securities;
(c) authorize for issuance, issue, sell or deliver or agree or commit to issue, sell, or deliver (whether through the issuance or granting of any options, warrants, commitments, subscriptions, rights to purchase or otherwise) any of its Subsidiaries is a party capital stock or knowingly waiveany securities convertible into or exercisable or exchangeable for shares of its capital stock, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of except the Company or Parentmay, any material trade secret;
(iv) dischargeeffective as of Closing, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually amend its Amended and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) Restated 1995 Stock Option and Stock Appreciation Rights Plan to the extent required by applicable Law or by written agreements or Company Plans existing provide that options granted to optionees prior to the date of this Agreement that have been disclosed or made available to Parent or may be exercised for a one (21) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto year period from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; or
(ix) authorize any of, or commit or agree to take any of, the foregoing actions other than as provided for in this Section 5.1.the
Appears in 1 contract
Samples: Securities Purchase Agreement (Middle Bay Oil Co Inc)
Conduct of the Business of the Company. The Except as contemplated by this Agreement or as set forth in Section 6.1 of the Company covenants and agrees as to itself and its Subsidiaries thatDisclosure Letter, during the period from the date of this Agreement and continuing until to the Effective Time, the Company and its subsidiaries will each conduct its operations according to its ordinary course of business, and will use reasonable best efforts to preserve intact its business organization and relationships with third parties and to keep available the services of its officers and employees. The Company will make its officers reasonably available to confer on a regular and frequent basis with representatives of the Parent to report upon the status of operations. Without limiting the generality of the foregoing, and except (i) as otherwise expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) to the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed Agreement or conditioned), or (iv) as set forth on in Section 5.1 6.1 of the Company Disclosure Letter, prior to the Effective Time, neither the Company nor any of its subsidiaries will, without the prior written consent of the Parent:
(Aa) shall conduct amend its business certificate of incorporation or by-laws (or equivalent instruments) adopt or implement any plan of consolidation, merger or reorganization, or amend the terms of its outstanding securities;
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of additional options, warrants, commitments, subscriptions, rights to purchase or otherwise) any shares of capital stock of any class or any securities convertible into shares of capital stock of any class, except as required by any Plan or Company Stock Option Plan existing as of the date hereof;
(c) adjust, split, combine or reclassify any shares of its capital stock, or issue or authorize the issuance of any other securities in all material respects only respect of, in lieu of or in substitution for shares of its capital stock;
(d) (i) create, incur or assume any indebtedness (including obligations in respect of capital leases) other than (x) indebtedness in a total aggregate amount of less than $1,000,000 or (y) trade indebtedness incurred in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, ; (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):
(i) (A) issue, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practiceassume, modifyguarantee, amend endorse or terminate otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any person other than any subsidiary of the Company; or (iii) make any loans, advances or capital contributions to, or investments in, any person other than the Company or any of the wholly-owned subsidiaries of the Company, except for loans or advances to employees or customers in the ordinary course of business;
(e) except in the ordinary course of business, sell, transfer, lease, license, mortgage or otherwise encumber or subject to any Encumbrance or otherwise dispose of, any business, subsidiary, or assets (including without limitation, receivables, leasehold interests or Intellectual Property) that are material, individually or in the aggregate, to the Company;
(f) make any capital expenditures in the aggregate for the Company and its subsidiaries in excess of $1,000,000;
(i) make any material contract Tax election, except in the ordinary course of business, (ii) settle or compromise any pending or threatened suit, action, Tax audit or claim in which the amount involved is greater than $500,000 or which is material to the Company and its subsidiaries taken as a whole, (iii) amend any Tax Return of the Company or any of its subsidiaries --- which would result in the Company or any of its subsidiaries incurring or increasing the cumulative Tax liability of the Company and its subsidiaries for all Tax periods in any amount in excess of $500,000, or (iv) change any of its methods of -- reporting material items of income and deductions for Tax purposes from those employed in the preparation of the Tax Returns of the Company for the taxable years ending December 31, 1999 and December 31, 2000, except as required by changes in law or regulation;
(h) waive or amend any term or condition of any confidentiality or "standstill" or similar agreement to which the Company or any of its Subsidiaries subsidiaries is a party, unless the Company Board determines in good faith, after consultation with outside counsel, that failure to do so would constitute a breach of the Company Board's fiduciary duties to the Company's stockholders under applicable law;
(i) other than (i) agreements which are terminable at will by the Company or any of its subsidiaries without liability or (ii) entering into, in the ordinary course of business, employment and consulting agreements that provide for annual compensation on an individual basis, of no more than $75,000, enter into or amend any legally binding employment, severance, consulting or salary continuation agreements with any officers, directors or employees or grant any increases in compensation or benefits to employees other than increases to officers and employees in the ordinary course of business of the Company and its subsidiaries;
(j) permit any material insurance policy naming the Company or any subsidiary as a beneficiary or a loss payable payee to be canceled or terminated except upon the scheduled expiration thereof, provided that such policies are replaced upon expiration with comparable coverage not substantially less favorable to the Company;
(k) except to the extent required by any existing collective bargaining agreement or by the terms of written employment agreements as in effect on the date of this Agreement, (i) increase the compensation payable to or to become payable to, or pension or other fringe benefits or perquisites to its present or former directors, employees, officers or consultants, except for increases in the ordinary course of business in salaries or wages of (x) present employees who are not executive officers of the Company or any of its subsidiaries or (y) executive officers of the Company or any of its subsidiaries not to exceed $25,000 per individual or $200,000 in the aggregate, or (ii) accelerate the vesting, funding or payment of any compensation payment or benefit;
(l) except as required under any existing collective bargaining agreement or unless doing so would not, individually or in the aggregate, result in increased liabilities or obligations on the part of the Company and its subsidiaries in excess of $500,000, enter into or adopt any new, or amend or renew any existing, Plan, any pension, retirement, profit or fringe or welfare benefit plan, policy agreement or arrangement or any collective bargaining agreement, other than as required by law;
(m) except in the ordinary course of business or as otherwise permitted by this Section 6.1, (i) enter into any material lease, contract or agreement or involving, individually or in the aggregate, obligations of the Company and its subsidiaries in excess of $500,000, (ii) modify, amend or terminate any material lease, contract or agreement to which the Company or any of its subsidiaries is a party that involved, individually or knowingly in the aggregate, payments or other consideration to or from the Company and its subsidiaries in excess of $500,000 or (iii) waive, release or assign any material rights or claims thereunder, having a value, individually or (C) dispose ofin the aggregate, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other more than to Representatives of the Company or Parent, any material trade secret$500,000;
(ivn) dischargedeclare, settle, compromise, assign set aside or satisfy pay any claim, whether dividend or not pending before a Governmental Entity, make any other distribution or payment with respect to any Shares or other capital stock or ownership interests (other than (A) outside with respect to the first and second quarters of 2001 only, regular quarterly cash and stock dividends on the ordinary course of business, Common Stock with record and payment dates consistent with past practice, or and in any case not to exceed $0.07 per share per quarter, and (B) except where such dischargedividends and other distributions paid in the ordinary course of business by any subsidiary to the Company or another wholly-owned subsidiary);
(o) directly or indirectly redeem, settlement, compromise re-purchase or satisfaction otherwise acquire any shares of capital stock or other securities of or ownership interests in the Company or of any claim would result of its Subsidiaries, except as required under any Plans or Company Stock Option Plans;
(p) settle or compromise any pending or threatened Litigation, other than (x) settlements of Litigations which involve solely the payment of money (without admission of liability) not to exceed $100,000 in payments (individually and not any one case or $500,000 in the aggregate), net of insurance, aggregate and (y) any Litigation by the Company or any of its Subsidiaries subsidiaries against the Parent, the Purchaser or any of less than $250,000the Parent's other subsidiaries;
(v) (Aq) except (1) to the extent as required by the SEC, GAAP or applicable Law or by written agreements or Company Plans existing prior law, adopt any change to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any accounting principles, practices or methods;
(r) acquire (i) by merging or consolidating with, or by purchasing a substantial portion of the employeesassets of, officersor by any other manner, directors or consultants of the Company any businesses or any corporations, partnerships, joint ventures, associations or other business organizations or division thereof having, individually or in the aggregate, a fair market value of its Subsidiaries$500,000 or more or (ii) any assets that are material, (B) hire any new employeesindividually or in the aggregate, to the Company, except purchases in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000business;
(s) take any action that would, or would reasonably be expected to, (Ci) except materially impair the ability of the Company, the Parent or the Purchaser to consummate the extent required by applicable Law Offer or by the Merger in accordance with the terms hereof or materially delay such consummation, (ii) result in any existing of the representations and warranties of the Company Plan or written agreement existing on the date of set forth in this Agreement that has been disclosed or made available are qualified as to Parent or materiality in the ordinary course of business (other than in connection with relation to a Company-instituted reduction in force) consistent with past practice for non-officer employeesMaterial Adverse Effect becoming untrue, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiariessuch representations and warranties that are not so qualified becoming untrue in any material respect, whether past or present, (Diii) except result in any of the conditions to the extent required by applicable Law Offer set forth in Annex A or by any existing Company Plan or written agreement existing on to the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees Merger set forth in the ordinary course of business consistent with past practice with an annual base rate of salary Article VII not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Returnbeing satisfied; or
(ixt) authorize any of, agree or commit or agree to take do any of, of the foregoing actions other than as provided for in this Section 5.1foregoing.
Appears in 1 contract
Conduct of the Business of the Company. The Company covenants and agrees as to itself and its Subsidiaries that, from From the date hereof until the earlier of the termination of this Agreement and continuing until the Effective TimeClosing Date, except (i) as expressly contemplated or permitted by this Agreementset forth on Schedule 6.01 of the Disclosure Schedules, (ii) as required by Law, (iii) to if the extent Parent shall otherwise consent have consented in writing (which writing, where such consent shall not be unreasonably withheld, delayed conditioned or conditioned)delayed, or (iii) as required by applicable Laws, (iv) any transactions expressly contemplated by the Pre-Closing Reorganization or (v) as set forth on Section 5.1 of otherwise expressly contemplated by this Agreement, (1) the Company Disclosure Letter, the Company (A) shall conduct its business and the businesses of its Subsidiaries in the Ordinary Course of Business (except as required to comply with any quarantine, “stay at home”, social distancing, travel restrictions or any other similar directives issued by a Governmental Entity or any Law in response to the COVID-19 pandemic (collectively, “COVID-19 Measures”), (2) the Company shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to preserve intact their businesses, their assets and their relationships with customers, suppliers and others having business dealings with them in all material respects only in the ordinary course of businessrespects, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties available the services of their present officers and assets in good repair and condition, employees (iii) maintain in effect all material governmental Permits pursuant except as required to which the Company or comply with any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provisionCOVID-19 Measures), and (B3) the Company shall not, and shall cause each Subsidiary not permit any of its Subsidiaries to:
a. except for issuances as may result from the exercise of Options that are outstanding as of the date hereof, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):
(i) (A) issue, sell, grant or deliver any of its, or any of its Subsidiaries’, equity securities or issue, sell or grant any securities convertible into, or options with respect to, or warrants to purchase or redeem rights to subscribe for, or other securities with their value derived from the profits or equity returns of, any shares of its or any Subsidiaryof its Subsidiaries’ equity securities;
b. effect any recapitalization, reclassification, distribution, equity split or like change in its capitalization;
c. amend its Organizational Documents or any of the Company’s capital stock Subsidiaries’ organizational documents;
d. make any redemption or purchase of its, or any of its Subsidiaries’, equity interests (other than with respect to the repurchase of Common Shares (including any Options) from former employees of a Group Company pursuant to existing agreements or any Company Security Plan) or declare, make or pay any dividend or distribution other than dividends declared, made or paid in the Ordinary Course of Business;
e. sell, assign or transfer any material portion of its assets, except for sales of obsolete assets or assets with de minimis or no book value;
f. except non-exclusive licenses of any Company IP Rights in the Ordinary Course of Business, sell, assign, transfer, or license any material Intellectual Property Rights;
g. fail to maintain or allow to go abandoned any Company-Owned IP Rights;
h. enter into (excluding extensions at the end of a term or upgrades in the Ordinary Course of Business), transfer, terminate (other than an expiration in accordance with its existing terms), modify, amend, waive any rights under, or discharge any other party of any obligation under any Specified Material Contract;
i. make any capital investment in, or any loan to, any other Person, except (i) pursuant to any existing agreement as of the date of this Agreement or (ii) any loans made to holders of Options (whether made before, on or after the date hereof, “Option Loans”) in the Ordinary Course of Business for the sole purpose of exercising such Options;
j. fail to make capital expenditures in accordance with the capital expenditures budget existing as of the date of this Agreement;
k. make any commitment to make any capital expenditures in excess of $1.5 million annually, except for such capital commitments that are reflected in the Company’s current budget;
l. enter into any Related Party Transactions or Interests;
m. make any loan to any of its directors, officers or employees other than (i) the advancement of business and travel expenses in the Ordinary Course of Business or to any of its other Affiliates or (ii) any Option Loans made to holders of Options in the Ordinary Course of Business for the sole purpose of exercising such Options;
n. except as required under the terms of any Company Plan or applicable Law: (i) grant any incentive awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the a Group Company or to any of its Subsidiaries employees, officers or directors, (ii) terminate or materially amend any Company Plan, (iii) adopt or enter into any plan, policy or arrangement for the current or future benefit of any officer or director of any Group Company that would be a Company Plan if it were in existence as of the date hereof, (iv) accelerate the time of payment or vesting of any compensation and benefits of any employee or director of any Group Company (or pay to any of the employees, officers, directors or consultants of the Company or such individual any of its Subsidiariesamount not otherwise due), (Bv) fund any rabbi trust or similar arrangement, (vi) hire or terminate any new employees, except in employee at the ordinary course level of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law Vice President or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business above (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any newcause), or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits Contract, or otherwise restricts take any other action, or modify the terms of employment of any employee at the level of Vice President or above outside of ordinary course salary adjustments;
o. (i) commence any Action (other than customer collection matters in the Ordinary Course of Business), or (ii) compromise or settle any Action if (x) the amount payable by any Group Company in connection therewith would exceed $1 million, (y) such settlement would be reasonably likely to have a material and adverse effect on the post-Closing operations of the business of any Group Company or (z) such settlement, compromise or release contemplates or involves any admission of its Subsidiaries wrongdoing or misconduct or provides for any relief or settlement other than the payment of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Returnmoney; or
(ix) authorize any of, or commit or agree to take any of, the foregoing actions other than as provided for in this Section 5.1.
Appears in 1 contract
Conduct of the Business of the Company. The Company covenants and agrees as to itself and its Subsidiaries that, During the period from the date of this Agreement and continuing until agreement to the Effective Time, except as otherwise agreed to in writing by the Company and Parent: (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) to the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure Letterwill, the Company (A) shall and will cause each of its subsidiaries to, conduct its business in all only in, and the Company will not take, and will cause each of its subsidiaries not to take, any material respects only in action except in, the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall will not, and shall the Company will cause each Subsidiary of its subsidiaries not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):
(i) (A) issue, sell, purchase or redeem enter into any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any material transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, business consistent with past practice, or and (Fiii) enter into any agreement with respect to the voting extent consistent with the foregoing, with no less diligence and effort than would be applied in the absence of this Agreement, the Company will, and will cause each of its subsidiaries to, preserve intact its current business organizations and reputation, use its reasonable best efforts to preserve its relationships with customers, suppliers and others having business dealings with it with the objective that their goodwill and ongoing businesses shall be unimpaired at the Effective Time, and comply in all material respects with all laws, rules, regulations and orders of all governmental entities or regulatory authorities applicable to it. Without limiting the generality of the capital stock foregoing and except as otherwise expressly permitted in this Agreement, prior to the Effective Time, the Company will not and will not permit any of its Subsidiaries to, without the prior written consent of the Company;Parent:
(iia) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose (i) increase the compensation of any of its material properties directors, officers or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except for normal increases in the ordinary course of business consistent with past practice with respect that, in the aggregate, do not result in a material increase in benefits or compensation expense to employees with an annual base salary not to exceed $100,000the Company and its subsidiaries taken as a whole, (Cii) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus allowance or other material employee benefit to not required or contemplated by any employee, officer, director or consultant of the Company Plans, to any director, officer or any of its Subsidiariesemployee, whether past or present, (Diii) enter into any new or amend any existing employment agreement with any director, officer or employee, (iv) enter into any new or amend any existing severance agreement with any director, officer or employee, (v) except as may be required to the extent required by comply with applicable Law law, become obligated under any new pension plan or by any existing Company Plan arrangement, welfare plan or written agreement existing arrangement, multiemployer plan or arrangement, employee benefit plan or arrangement, severance plan or arrangement, benefit plan or arrangement, or similar plan or arrangement, which was not in existence on the date of this Agreement that has been disclosed or made available to Parenthereof, enter into or amend any such plan or arrangement in existence on the date hereof;
(b) enter into any contract of employment or amend any consultingexisting contract, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees engage in any new transaction outside the ordinary course of business consistent with past practice or not on an arm's-length basis, with an annual base rate any affiliate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice)subsidiaries;
(viiic) makeexcept to the extent required by applicable law, revoke (i) permit any material change in (A) accounting, financial reporting, inventory, allowance or amend any Tax election, adopt tax practice or change policy or (B) any method of calculating any bad debt, contingency or other reserve for accounting, extend financial reporting or waive the application of tax purposes or (ii) make any statute of limitation regarding the assessment material tax election or collection of any Tax, settle or compromise any Tax material income tax liability with any governmental entity or refund or file any amended Tax Return; orregulatory authority;
(ixd) authorize take any ofaction that would cause any representations set forth in Article 3 not to be true in all material respects from and after the date hereof until the Effective Time;
(e) fail to maintain in full force the insurance policies in effect on the date hereof or change any self- insurance program in effect in any material respect;
(f) do any act or omit to do any act, or commit permit any act or agree omission to take act, which will cause a breach of any ofcontract or commitment of the Company or any of its subsidiaries, except to the foregoing actions other than as provided for in this Section 5.1extent that such breach would not have a Material Adverse Effect.
Appears in 1 contract
Samples: Merger Agreement (Glasstech Inc)
Conduct of the Business of the Company. The (a) Except as set forth in Section 7.1(a) of the Company covenants and agrees Disclosure Letter, or as to itself and its Subsidiaries thatotherwise expressly provided in this Agreement, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Effective Time, except the Company shall, and shall cause each of its Subsidiaries to, conduct their respective operations according to their ordinary and usual course of business and consistent with past practice, and to use their respective commercially reasonable efforts to preserve intact their respective business organizations, to keep available the services of their officers and employees and to maintain satisfactory relationships with brokers, agents, producers, Governmental Authorities, suppliers, contractors, distributors, customers and others having material business relationships with them. Further, the Company shall at all times from and after the date hereof use commercially reasonable efforts to (i) comply in all material respects with all listing and corporate governance requirements of the NYSE, and (ii) remain in material compliance from the date hereof until immediately after the Effective Time, with all rules, regulations and requirements of the Xxxxxxxx-Xxxxx Act and the SEC. Without limiting the generality of any of the foregoing, and except as otherwise expressly contemplated or permitted by provided in this Agreement, prior to the Effective Time, neither the Company nor any of the Company’s Subsidiaries will, without the prior written consent of Parent:
(i) amend its articles or certificate of incorporation, bylaws, trust, partnership or joint venture agreements or other organizational documents (except to the extent required to comply with applicable Law or its obligations hereunder);
(ii) authorize for issuance or issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any other securities or interests, except (A) as required by Lawthe terms of any Company Benefit Plan existing on the date hereof, or any options, warrants, rights or other securities outstanding as of the date hereof and disclosed pursuant to this Agreement or (B) any such issuance by a direct or indirect wholly-owned Subsidiary of the Company to such Subsidiary’s parent or another direct or indirect wholly-owned Subsidiary of the Company;
(iii) combine or reclassify any shares of its capital stock or declare, set aside or pay any dividend or other distribution or redemption (whether in cash, stock or property or any combination thereof) in respect of its capital stock, or redeem or otherwise acquire any of its securities or any securities of their respective Subsidiaries, except for: (i) dividends and distributions by a direct or indirect wholly-owned Subsidiary of the Company to its parent; (ii) effecting a restructuring whereby Kanawha HealthCare Solutions becomes a direct subsidiary of the Company; and (iii) dividends and distributions required pursuant to the extent Parent shall declaration of trust and indenture in effect on the date hereof relating to the trust preferred securities issued by one of the Company’s Subsidiaries;
(iv) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock, stock options or debt securities (except pursuant to any stock-for-stock exercise of the Company Stock Options);
(v) (A) repay or retire any indebtedness for borrowed money, except upon the maturity date thereof or as otherwise required by the terms of such indebtedness, however, the Company may repay or retire the indebtedness for borrowed money associated with the existing revolving credit loan in the original principal amount of $15,000,000 with Wachovia Bank, (B) incur or assume any indebtedness for borrowed money not currently outstanding, except for borrowings in the ordinary course of business or to maintain Kanawha’s BCAR at 130% or more, in each case, under revolving credit agreements in effect on the date hereof, or permit any modifications or amendments of any agreements related to indebtedness for borrowed money (except, if necessary to maintain Kanawha’s BCAR at 130% or more and with the prior written consent in writing (of Parent, which consent shall not be unreasonably withheld, delayed the Company and its Subsidiaries may modify or conditionedamend its existing credit agreement with Wachovia Bank to provide for, and the Company may incur thereunder, up to $25,000,000 in the aggregate of new indebtedness for borrowed money, provided, that under any such amendment or modification, the Company shall not agree to any type of prepayment penalties without the written consent of Parent), (C) assume, guarantee, endorse or otherwise become liable or responsible for the obligations of any Person (except for the obligations of the Company or its Subsidiaries), or (iv) as set forth on Section 5.1 permit the renewal or extension of any Contract or other obligation that is the Company Disclosure Lettersubject of a guarantee or similar obligation, other than the Company (A) shall conduct its business in all material respects only endorsement of checks for deposit in the ordinary course of business, consistent with past practice(D) make any loans, andadvances or capital contributions to, to the extent consistent therewithor investments in, it and its Subsidiaries shall use their respective reasonable best efforts to any other Person (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by except for the Company or its Subsidiaries Subsidiaries), or (E) create, assume or consensually incur any material Lien, or pledge or otherwise encumber any capital stock or other equity securities of the Company and its Subsidiaries;
(vi) enter into any Material Contract, or alter, terminate, amend or modify any existing Material Contract, or exercise any option under any existing Material Contract, other than in the ordinary course of business or in connection with respect the transactions contemplated by this Agreement;
(vii) authorize or make any capital expenditure or financing in excess of $250,000 individually or in the aggregate other than capital expenditures pursuant to matters specifically addressed Contracts entered into prior to the date hereof, capital expenditures contemplated in the Company’s or its Subsidiary’s current business plan, or capital expenditures related to necessary maintenance in the ordinary course of business;
(viii) adopt or amend (except as may be required by Law or as provided in this Agreement) any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, pension, retirement, deferred compensation, employment, severance or other employee benefit agreements, trusts, plans, funds or other arrangements for the benefit or welfare of any director, officer or employee, or (except for normal increases to employees in the ordinary course of business that are consistent with past practices or are required by existing Contracts) increase in any manner the compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any provision existing plan or arrangement (including the granting of Section 5.1 shall be deemed a breach stock options, stock appreciation rights, shares of this sentence unless such action would constitute a breach restricted stock or performance units) or enter into any Contract, agreement, commitment or arrangement to do any of such other provisionthe foregoing; except, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s with the prior written consent (of Parent, which consent shall not be unreasonably withheld, delayed or conditioned):the Company may do any of the foregoing up to an aggregate amount of $1,000,000 as the Company deems necessary to keep available the services of the officers and employees of it and its Subsidiaries;
(iix) (A) issueacquire, sell, purchase lease or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms dispose of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, material assets (other than the purchase of supplies or inventory in outside the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(iix) incur acquire (by merger, consolidation or acquisition of stock or assets) any Indebtedness corporation, partnership or sell, lease, sublease, license business organization or permit to be subject to any Lien, other than a Permitted Lien, division or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant purchases of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made marketable securities in the ordinary course of business consistent with past practice);
(viiixi) makeadopt a plan of complete or partial liquidation or resolutions providing for or authorizing such liquidation or a dissolution, revoke merger, consolidation, restructuring, recapitalization or amend other reorganization, unless required by Law or administrative order;
(xii) authorize or make any change in accounting policies or procedures applied by the Company (including Tax electionaccounting policies and procedures), adopt other than in the ordinary course of business and consistent with past practice or as required by applicable Law or change in GAAP or SAP;
(xiii) except in the ordinary course of business consistent with past practice or as required by change in applicable Law or generally accepted actuarial principles, make any method change in the (i) underwriting or claims management, (ii) pricing or (iii) reserving practices of accountingthe Company or any of its Subsidiaries;
(xiv) modify in any material respects any current investment policies or investment practices, extend except as required by or waive the application of any statute of limitation regarding the assessment or collection of any Tax, to accommodate changes in applicable Law;
(xv) settle or compromise any Tax liability material claims or refund litigation, except in the ordinary course of business consistent with past practice;
(xvi) voluntarily forfeit, abandon, modify, waive, terminate or file otherwise change any amended Tax Returnlicense to underwrite and sell insurance policies held by the Company or any Subsidiary, except as may be required in order to comply with applicable Law; or
(ixxvii) authorize any of, agree in writing or commit or agree otherwise to take any ofof the foregoing actions.
(b) From and after the date hereof, until the earlier of the Effective Time or termination of this Agreement, the foregoing actions other than Company shall, and shall cause Kanawha to, use commercially reasonable efforts to maintain Kanawha’s BCAR at 130% or more.
(c) Except as provided for required by Law, during the period from the date of this Agreement to the Effective Time, none of Parent, Merger Subsidiary or the Company shall, or shall permit any of its Subsidiaries to, take any action that would, or is reasonably likely to, result in any of the conditions set forth in Article VIII not being satisfied as of the Closing Date.
(d) Parent and the Company agree that, during the period from the date of this Agreement to the Effective Time: (i) the Company will promptly advise Parent of the occurrence of any event having, or reasonably likely to have, a Material Adverse Effect, or any event that would constitute a breach by the Company of any of its representations, warranties, covenants or agreements set forth in this Agreement, or any event reasonably likely to materially delay the consummation of the transactions contemplated in this Agreement and (ii) Parent will promptly advise the Company of the occurrence of any event that would constitute a breach by Parent of any of its representations, warranties, covenants or agreements set forth in this Agreement, or any event reasonably likely to materially delay the consummation of the transactions contemplated in this Agreement.
(e) Parent hereby designates the two officers of Parent identified in Section 5.17.1(e) of the Company Disclosure Letter, or such other officers as Parent may designate from time to time upon written notice to the Company (“Parent’s Representatives”), to be responsible for determining whether consent to any action prohibited by Section 7.1(a) shall be given by Parent. The Company hereby designates the two officers of the Company identified in Section 7.1(e) of the Company Disclosure Letter, or such other officers as the Company may designate upon written notice to Parent (“Company’s Representatives”), to contact Parent’s Representatives with any requests for consent to any action prohibited by Section 7.1(a). Parent’s Representatives shall respond promptly (either orally or in writing) to any request for consent (which may be oral or written) to the taking of any action under Section 7.1. If Parent’s Representatives do not respond to any request within three Business Days of its receipt, such consent will be deemed to have been given. The Company may rely on any consent given orally or in writing by either of Parent’s Representatives. The time periods within which Parent’s Representatives must respond shall commence on the date either of Parent’s Representatives receive an oral or written request for consent.
Appears in 1 contract
Samples: Merger Agreement (KMG America CORP)
Conduct of the Business of the Company. The Company covenants and agrees as to itself and its Subsidiaries that, from During the date of this Agreement and continuing until the Effective TimePre-Closing Period, except (i1) as set forth in Section 4.2 of the Disclosure Schedule, (2) to the extent expressly contemplated required or permitted by this AgreementAgreement or any other Transaction Document, (ii3) as required by Law, necessary to ensure that the Company complies with applicable Laws (iii) to the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditionedincluding COVID-19 Measures), or (iv4) as set forth on Section 5.1 of the Company Disclosure Letter, the Company (A) shall conduct its business in all material respects only in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed conditioned or conditioned):
delayed): (i) the Company shall use commercially reasonable efforts to (A) issue, sell, purchase or redeem any shares of carry on its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory business in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of businesspreserve substantially intact its present business organization, consistent and (C) preserve its relationships with past practicematerial customers, modifysuppliers, amend or terminate any material contract distributors, licensors, licensees, Governmental Bodies and others to which whom the Company has legal or contractual obligations; and (ii) the Company shall not: 116. amend the Company Charter or the bylaws of the Company; 117. split, combine or reclassify any of its Subsidiaries is a party capital stock or knowingly waive(except in connection with the conversion of Company Preferred Stock to Company Common Stock or the exercise of Company Options) issue or authorize the issuance of any other securities in respect of, release in lieu of or assign in substitution for shares of its capital stock; 118. issue, deliver, sell, disperse or pledge any material rights shares of Company Capital Stock or claims thereundersecurities convertible into, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue any such shares or other convertible securities; provided, however, that (Ci) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company may issue shares of Company Common Stock in connection with the exercise of Company Options or Parentother rights for Company Common Stock, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside in each case outstanding as of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed in accordance with their terms and, as applicable, the Equity Incentive Plans as in effect on the date of this Agreement and (ii) the Company may issue shares of Company Common Stock in connection with the conversion of Company Preferred Stock outstanding as of the date of this Agreement; 119. enter into or made available to Parent adopt any plan or (2) agreement of complete or partial liquidation or dissolution, or file a voluntary petition in bankruptcy or commence a voluntary legal procedure for ordinary course salary increasesreorganization, bonuses arrangement, adjustment, release or composition of indebtedness in bankruptcy or other compensation granted to non-officer employeessimilar Laws now or hereafter in effect; 120. make any capital expenditures, grant capital additions or announce any stock optioncapital improvements, equity or incentive awards or the increase in excess of $200,000 in the salaries, bonuses or aggregate (other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except than in the ordinary course of business consistent with past practice or in accordance with respect the budget for capital expenditures previously made available to employees Parent); 121. (i) reduce the amount of any insurance coverage provided by existing Insurance Policies or (ii) fail to maintain in full force and effect, or fail to renew, insurance coverage consistent with an annual base salary not past practices; 122. acquire or agree to exceed $100,000acquire by merging with, (C) except to or by purchasing a portion of the extent required by applicable Law stock or assets of, or by any existing Company Plan other manner, any business or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or any Entity, other than as permitted in (e) above; 123. other than in the ordinary course of business (business, transfer, sell, lease, abandon, allow to lapse, license, or grant any other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit right to any employee, officer, director properties or consultant assets of the Company or any of its Subsidiaries, whether past or present, (D) except which are material to the extent required by Company; 124. make or change or revoke any material election in respect of Taxes, change any accounting method in respect of Taxes, settle any material claim or assessment in respect of Taxes, or consent to any extension or waiver of the limitation period applicable Law to any claim or by assessment in respect of Taxes; 125. increase in any existing manner the compensation (including bonuses) or wage rate, pension, welfare, fringe or other benefits, severance, or termination pay of any director or employee of the Company, except (i) for increases provided for in any Contracts or Company Plan or written agreement existing Plans in effect on the date hereof and set forth in Section 4.2 of this Agreement the Disclosure Schedule, and (ii) that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except the Company may make annual cash bonus and commission payments for agreements for newly hired employees completed periods based on actual performance in the ordinary course of business consistent with past practice practices and in accordance with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement the bonus and commission plans and policies existing on the date of this Agreement)Agreement and are in the ordinary course of business consistent with past practices, amend or terminate including such payments to its officers; 126. except as required pursuant to the terms of any existing, Company Plan or benefit arrangement Company Service Provider Agreement in effect as of the date hereof and set forth in Section 4.2 of the Disclosure Schedule, or as otherwise required by applicable Law (1) establish, adopt or materially amend any Company Plan or Company Service Provider Agreement or any collective bargaining agreement;
arrangement that would have been a Company Plan or Company Service Provider Agreement had it been entered into prior to the date of this Agreement ; (vi2) grant any new awards, or amend or amend or modify the terms of any outstanding awards, under any Company Plan or Company Service Provider Agreement; (3) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Plan or Company Service Provider Agreement; (4) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan that is required by applicable Law to be funded or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP GAAP; (5) forgive any loans or under applicable Law and as concurred with by issue any loans (other than routine travel advances issued in the ordinary course of business, which shall not exceed $10,000 individually) to any employee of the Company’s independent auditors, make (6) hire any material change employee, except to replace an employee whose annual base salary would be $150,000 or less, or (7) terminate the employment of any employee other than for cause; 127. utilize or leverage social insurance programs related to COVID-19; notwithstanding the foregoing, the Company shall be permitted to take any actions reasonably required in accounting methods, principles connection with its application for forgiveness of the PPP Loan to the extent such actions do not result in any liability or practices;
(vii) enter into any contract that limits or otherwise restricts obligation for the Company or its Affiliates after the Closing that would not be de minimis; 128. announce, implement or effect any reduction-in-force, lay-off, furlough or other program resulting in the termination of its Subsidiaries or any employment of their respective Affiliates or any successor thereto from engaging or competing in any line employees (other than terminations of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made individual employees in the ordinary course of business consistent with past practice);
; 129. become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization; 130. make any material changes in its methods of accounting or accounting practices (viii) makeincluding with respect to reserves), revoke or amend any Tax electionother than as required by GAAP; 131. waive, adopt or change any method of accountingrelease, extend or waive the application of any statute of limitation regarding the assessment or collection of any Taxassign, compromise, commence, settle or compromise agree to settle any Tax liability or refund or file any amended Tax Return; or
Legal Proceeding on terms requiring (ix1) authorize any of, or commit or agree the Company to take any of, material action or abstain from taking any material action or (2) the foregoing actions other than as provided for payment of monetary damages in this Section 5.1.excess of $100,000 that is not covered by insurance;
Appears in 1 contract
Samples: Merger Agreement (Integra Lifesciences Holdings Corp)
Conduct of the Business of the Company. The Except as (i) contemplated by this Agreement or (ii) set forth on the Company covenants Disclosure Schedule, after the date hereof and prior to the earlier of the Effective Time or the termination of this Agreement in accordance with Section 7.1, the Company agrees as to itself and its Subsidiaries that, from the date of this Agreement and continuing until the Effective Time, that (except (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) to the extent that Parent shall otherwise consent in writing (consent, which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure Letter, the Company
(A) the Company shall conduct its business in all material respects only in operations according to the ordinary course of business, business consistent with past practice, andand will use commercially reasonable efforts to preserve intact its present business organization, to keep available the extent consistent therewithservices of its present officers and employees and to maintain satisfactory relationships with licensors, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customerslicensees, suppliers, contractors, distributors, creditorscustomers and others having business relationships with it and (B) without limiting the generality of the foregoing, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which neither the Company or nor any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):shall:
(i) (A) issue, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (Ca) declare, set aside or pay any dividends ondividend or other distribution with respect to any shares of capital stock of the Company, or make repurchase, redeem or acquire any other distributions (whether in cash, outstanding shares of capital stock or property), in respect other equity securities of, or other ownership interests in, the Company or any Subsidiary of its capital stock, other than dividends and distributions by a direct the Company or indirect wholly owned Subsidiary to its parent, effect any stock split (Dforward or reverse) amend or otherwise change its capitalization or capital structure in any Subsidiary’s certificate manner from the way it existed on the date hereof;
(b) amend any provision of the Certificate of Incorporation or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition Bylaws of, or investment inany material term of any outstanding security issued by, assets the Company or any Subsidiary (other than any wholly owned Subsidiary) of the purchase of supplies Company;
(c) incur, assume or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or guarantee any indebtedness for borrowed money other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, than borrowings under existing short term credit facilities not in excess of $250,00050,000 in the aggregate;
(d) factor any accounts receivable of the Company;
(e) change any method of accounting or accounting practice by the Company or any Subsidiary of the Company, except for any such change required by reason of a change in GAAP;
(f) except as provided by the Severance Agreements, (i) grant any severance or termination pay to any director, officer or employee of the Company or any Subsidiary of the Company, (ii) enter into any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any director, officer or employee of the Company or any Subsidiary of the Company, (iii) increase benefits payable under any existing severance or termination pay policies or employment agreements or (iv) increase compensation, bonus or other benefits payable to directors, officers or employees of the Company or any Subsidiary of the Company, in each case other than in the ordinary course of business, business consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(iig) incur issue any Indebtedness Company Securities or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose the securities of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives Subsidiary of the Company other than (i) pursuant to Company Options, warrants or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside other Company Common Stock equivalents outstanding as of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available (ii) pursuant to Parent the Company ESPP, or (2iii) for ordinary course salary increasespursuant to the Rights Plan;
(h) acquire, bonuses dispose of or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants license assets of the Company or any of and its Subsidiaries, (B) hire any new employees, except in the ordinary course of business consistent with past practice practice, or acquire or dispose of capital stock of any third party or merge or consolidate with respect to employees any third party;
(i) enter into any joint venture, partnership or similar agreement with an annual base salary not to exceed $100,000any Person other than a wholly owned Subsidiary;
(j) modify, (C) amend or terminate any of the Company's or any of its Subsidiaries' Material Contracts, or waive, release or assign any material rights or claims under any of the Company's or any of its Subsidiaries' Material Contracts, except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business or as expressly required by this Agreement;
(other than in connection with a Company-instituted reduction in forcek) consistent make any Tax election inconsistent with past practice for non-officer employeesthat, pay individually or agree to pay in the aggregate, would adversely affect in any pension, retirement allowance, termination material respect the Tax liability or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant Tax attributes of the Company or any of its Subsidiaries, whether past taken as a whole, or presentsettle or compromise any material Tax liability;
(l) settle, compromise or otherwise terminate any litigation, claim or other settlement negotiation in an amount in excess of $50,000 in the aggregate, provided that there are no additional non-financial settlement terms to which the Company is subject;
(Dm) except fail to maintain insurance covering the extent required Company's or its Subsidiaries' material properties and assets under substantially similar terms and conditions as the Company's or its Subsidiaries', as applicable, current policies;
(n) enter into any Material Contract which would require the Company to expend a sum in excess of $100,000;
(o) split, combine or reclassify any class of capital stock of the Company;
(p) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the Merger);
(q) acquire or agree to acquire by applicable Law merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any existing Company Plan other manner, any business or written agreement existing on any corporation, partnership, association or other business organization or division thereof; or otherwise acquire or agree to acquire any assets which are material, individually or in the date aggregate, to the business of this Agreement that has been disclosed or made available to Parent, enter into the Company;
(r) adopt or amend any contract of employment employee benefit plan or any consulting, bonus, severance, retention, retirement employee stock purchase or similar employee stock option plan or grant agreement, except for or enter into any employment contract, consulting agreement or collective bargaining agreement (other than offer letters and letter agreements for newly hired employees entered into in the ordinary course of business consistent with past practice with an annual base rate of salary not employees who are terminable "at will"), pay any special bonus or special remuneration to exceed $100,000 any director, officer, consultant or (E) enter into or adopt any newemployee, or materially increase the salaries or wage rates or fringe benefits under (including rights to severance or renew (indemnification) of its directors, officers, employees or consultants other than automatic renewals increases to employees who are not directors or affiliates in the ordinary course of business consistent with past practice or as required by law or as provided by the Severance Agreements or make any loans to any of its officers, directors, employees, affiliates, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such persons pursuant to an existing Company Plan employee benefit plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreementotherwise;
(vis) except as required by GAAP or under applicable Law and as concurred with provided by the Company’s independent auditorsSeverance Agreements, pay or make any material change in accounting methodsaccrual or arrangement for payment of any pension, principles retirement allowance or practices;
(vii) enter into other employee benefit pursuant to any contract that limits existing plan, agreement or otherwise restricts arrangement to any officer, director, employee or affiliate or pay or agree to pay or make any accrual or arrangement for payment to any officers, directors, employees or affiliates of the Company or any of its Subsidiaries or of any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement amount relating to cross-promotional campaigns with third parties unused vacation days, except payments and accruals made in the ordinary course of business consistent with past practice); adopt or pay, grant, issue, accelerate or accrue salary, stock options, other equity rights or other payments or benefits pursuant to any pension, profit-sharing, bonus, extra compensation, incentive, deferred compensation, stock purchase, stock option, stock appreciation right, group insurance, severance pay, retirement or other employee benefit plan, agreement or arrangement, or any employment or consulting agreement with or for the benefit of any Company or Company Subsidiary director, officer, employee, agent or consultant, whether past or present, or amend in any material respect any such existing plan, agreement or arrangement in a manner inconsistent with the foregoing;
(viiit) makefail to make in a timely manner any filings with the SEC required under the Securities Act or the Exchange Act or the rules and regulations promulgated thereunder;
(u) except as required or permitted under this Agreement, revoke take any action that would or amend is reasonably likely to result in any Tax electionof the conditions to the Merger set forth in Article VI not being satisfied, adopt or change would make any method representation or warranty of accountingthe Company contained herein inaccurate in any material respect at, extend or waive the application as of any statute time prior to, the Effective Time, or that would materially impair the ability of limitation regarding the assessment Company to consummate the Merger in accordance with the terms hereof;
(v) fail to take any action required by the Xxxxxxxx-Xxxxx Act of 2002;
(w) contribute any Company Intellectual Property to any standards organization, or collection use or incorporate any intellectual property from any standards organization in the Company's products or services;
(x) incorporate any Publicly Available Software in whole or in part into any part of the Company's products or services, use Publicly Available Software in whole or in part in the development of any Taxproducts or services in a manner that may subject the products, settle services or compromise content available therefrom, in whole or in part, to all or part of the license obligations of any Tax liability Publicly Available Software, or refund combine or file distribute the products or services (including any amended Tax Returncontent available therefrom) with any Publicly Available Software; or
(ixy) authorize any ofauthorize, or commit or agree to take any of, of the foregoing actions except as otherwise permitted by this Agreement. Notwithstanding the foregoing or anything contained herein to the contrary, from the date hereof to the earlier of the Effective Time or the termination of this Agreement in accordance with Section 7.1, the Company shall confer with Parent and its Representatives, at such times as they may request, as to operational and integration matters to the extent permitted by law, and promptly notify the same of any change in the normal course of any business, operations or financial condition of the Company, its Subsidiaries or their respective assets or properties, or any emergency related thereto. Without limiting the generality of the foregoing, the Company shall promptly notify Parent of (i) any discussions or actions (of any type, preliminary or otherwise) relating to bankruptcy of the Company or its Subsidiaries, (ii) any complaints, investigations or hearings (or communications indicating that the same may be contemplated) of any Governmental Entity (for which the Company has received written or oral notice), (iii) any material loss of or damage to any property owned by the Company or its Subsidiaries, (iv) any material change in material existing relationships with outside third parties (for which the Company has received written or oral notice), (v) the institution or threat of any material litigation that could affect the Company, (vi) the failure of the Company to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it pursuant to this Agreement or (vii) any other than as provided for matter that could result in this Section 5.1a Company Material Adverse Effect.
Appears in 1 contract
Samples: Merger Agreement (Vicinity Corp)
Conduct of the Business of the Company. The Company covenants and agrees as to itself and its Subsidiaries that, During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement in accordance with Section 5.01(c) or Article VII and the Effective Time, the Company agrees with respect to itself and its Subsidiaries (except to the extent that Acquiror shall otherwise consent in writing):
(ia) as expressly to preserve and maintain its corporate existence and all of its rights, privileges and franchises reasonably necessary or desirable in the normal conduct of its business, except to the extent contemplated or by any transactions specifically permitted by this Agreement;
(b) not to acquire any stock or other interest in, nor (ii) as required by Law, (iii) to the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure Letter, the Company (A) shall conduct its business in all material respects only except in the ordinary course of business) purchase any assets of, consistent with past practiceany corporation, andpartnership, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their association or other business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, or entity or any division thereof (ii) maintain and keep material properties and except any stock or assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant distributed to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company as part of any bankruptcy or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed creditor settlement or conditioned):
(i) (A) issue, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms a plan of any Company Plan or any awards made under the Company Equity Plansreorganization), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, nor agree to do any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Companyforegoing;
(iic) incur any Indebtedness or not to sell, lease, subleaseassign, license or permit to be subject to any Lien, other than a Permitted Lien, transfer or otherwise dispose of any of its material properties or assets (including, without limitation, patents, trade secrets or licenses), nor suffer to exist or create any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or Lien on any of its Subsidiaries is a party or knowingly waiveassets, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, as permitted by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business and except that the Company and each of its Subsidiaries may sell or otherwise dispose of any assets which are obsolete;
(d) not to incur any indebtedness, other than in connection with as a Company-instituted reduction in force) consistent with past practice result of borrowings or drawdowns, the issuance of letters of credit for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant the account of the Company or any and the incurrence of its Subsidiariesinterest, whether past or presentletter of credit reimbursement obligations and other obligations under the terms of the Credit Agreement dated September 8, (D) except to 1995 as amended, among the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date and Wachovia Bank, N.A., as agent, and Wachovia Bank, N.A. and First Union National Bank of this Agreement that has been disclosed or made available to ParentNorth Carolina, enter into or amend any contract of employment or any consultingas lenders, bonus, severance, retention, retirement or similar agreement, except which indebtedness shall be incurred only for agreements for newly hired employees working capital purposes in the ordinary course of business consistent with past practice with an annual base rate of salary business;
(e) not to exceed $100,000 (x) alter, amend or repeal any provision of its Articles of Incorporation or Bylaws, (Ey) enter into or adopt any new, or materially increase benefits under or renew change the number of its directors (other than automatic renewals pursuant to an as a result of the death, retirement or resignation of a director), (z) form or acquire any Subsidiaries not existing Company Plan or written agreement existing on as of the date of this Agreement), amend (xx) enter into, modify or terminate any existingcontracts or leases which have a Material Adverse Effect on the Company or agree to do so, Company Plan (yy) enter into, modify or benefit arrangement terminate any Employment Arrangement, or (zz) declare, pay, commit to or incur any collective bargaining agreementobligation of any kind for the payment of any bonus, additional salary or compensation or retirement, termination, welfare or severance benefits or change in control benefits payable or to become payable to any of its employees or such other persons, except for such matters as are required pursuant to the terms of any existing Employment Arrangement or Benefit Plan;
(vif) except as required by GAAP or under to maintain its books, accounts and records in the usual, ordinary and regular manner and in material compliance with all applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practiceslaws;
(viig) enter into to pay and discharge all taxes imposed upon it or upon its income or profits, or upon any contract property belonging to it, prior to the date on which penalties attach thereto, except to the extent that limits or otherwise restricts the Company is currently contesting, in good faith and by proper proceedings, the payment of such taxes and the Company maintains appropriate reserves with respect thereto;
(h) not to settle any tax claim against the Company or any of its Subsidiaries or any litigation (net of their respective Affiliates applicable insurance proceeds) in excess of $25,000 in the aggregate;
(i) to meet its obligations under all contracts and leases and not become in default thereunder, where such default would have a Material Adverse Effect on the Company;
(j) to maintain its business and assets in good repair, order and condition, reasonable wear and tear excepted, and maintain insurance upon such business and assets at least comparable in amount and kind to that in effect on the date hereof,
(k) to maintain its present relationships and goodwill with suppliers, brokers, manufacturers, representatives, distributors, customers and others having business relations with it (provided that it may pursue overdue accounts and otherwise exercise lawful remedies in its customary fashion);
(l) not to declare, set aside, make or pay any dividends or other distributions with respect to the Company Common Stock, or purchase or redeem any shares of the Company Common Stock, or agree to take any such action;
(m) except for those capital expenditures listed on Schedule 5.03(m) which have been previously approved by the Company Board, not to authorize or make any single capital expenditure in excess of $50,000, or if the aggregate of the amount of such capital expenditure together with the amounts of all other capital expenditures since the date of this Agreement shall exceed $100,000;
(n) not to violate any law or regulation applicable to it nor violate any order, injunction or decree applicable to the conduct of its business; and
(o) not to increase the number of shares authorized or issued and outstanding of the Company Common Stock, nor grant or make any pledge, option, warrant, call, commitment, right or agreement of any character relating to the Company Common Stock, nor issue or sell any shares of the Company Common Stock, or securities convertible into such capital stock, or any successor thereto from engaging bonds, promissory notes, debentures or competing other corporate securities or become obligated so to sell or issue any such securities or obligations, except, in any line case, issuance of business shares of the Company Common Stock pursuant to the exercise of options outstanding as of the date hereof and referred to in Section 3.04;
(p) not to make any change to its accounting methods, principles or product line practices, except as may be required by U.S. generally accepted accounting principles;
(q) not to waive any right or in cancel any geographic area (excluding debt owed to the Company or any marketing agreement relating to cross-promotional campaigns with third parties made Subsidiary or claim against any person or entity, except in the ordinary course of business consistent with past practice);and provided the value of the right waived or debt cancelled does not exceed $25,000; and
(viiir) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; or
(ix) authorize any ofnot to authorize, or commit or agree to take take, any of, of the foregoing actions other than as provided for in this Section 5.1actions.
Appears in 1 contract
Samples: Merger Agreement (Trion Inc)
Conduct of the Business of the Company. The Company covenants and agrees Except as to itself and its Subsidiaries that, from the date of (i) contemplated by this Agreement and continuing until the Effective Time, except (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Lawset forth on the Company Disclosure Schedule, after the date hereof and prior to the Closing, the Company agrees that (iii) except to the extent that Parent shall otherwise consent in writing (consent, which consent shall not be unreasonably withheld, delayed or conditioned)) the Company shall conduct its operations in the ordinary course, or (iv) as set forth on Section 5.1 taking into account the advice and recommendations of the Company Disclosure LetterAdvisory Committee,and will use commercially reasonable efforts to preserve intact its present business focus while making commercially reasonable decisions regarding reductions in the Company's monthly expenditures vis-a-vis its monthly income, negotiating terminations of its Bridgewater and Plano office leases, and maintaining satisfactory relationships with licensors, licensees, suppliers, contractors, distributors, customers and others having business relationships with it. Without limiting the generality of the foregoing, during the period from the date of this Agreement to the Closing, the Company (A) shall conduct its business in all material respects only in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s the prior written consent (of Parent, which consent shall not be unreasonably withheld, delayed or conditioned)::
(i) (A) issue, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (Ca) declare, set aside or pay any dividends ondividend or other distribution with respect to any shares of capital stock of the Company, or make repurchase, redeem or acquire any other distributions (whether in cash, outstanding shares of capital stock or property), in respect other equity securities of, or other ownership interests in, the Company or effect any of its capital stock, other than dividends and distributions by a direct stock split (forward or indirect wholly owned Subsidiary to its parent, (Dreverse) amend or otherwise change its capitalization or capital structure in any Subsidiary’s certificate manner from the way it existed on the date hereof;
(b) amend any provision of the Certificate of Incorporation or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition Bylaws of, or investment inany material term of any outstanding security issued by, assets the Company;
(c) incur, assume or guarantee any indebtedness for borrowed money other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, borrowings under existing short term credit facilities not in excess of $250,00010,000 in the aggregate;
(d) change any method of accounting or accounting practice by the Company, except for any such change required by reason of a change in GAAP or the Internal Revenue Code of 1986, as amended;
(i) except as set forth in the Company Disclosure Schedule, grant any severance or termination pay to any director, officer or employee of the Company, (ii) enter into any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any director, officer or employee of the Company, (iii) increase benefits payable under any existing severance or termination pay policies or employment agreements or (iv) increase compensation, bonus or other benefits payable to directors, officers or employees of the Company, in each case other than in the ordinary course of businessbusiness consistent with past practice;
(f) issue any Company Securities other than pursuant to Company Options, warrants or other Common Stock equivalents outstanding as of the date of this Agreement;
(g) acquire, dispose of or license assets material to the Company, except for sales of inventory in the ordinary course of business consistent with past practice, or acquire or dispose of capital stock of any third party, merge or consolidate with any third party;
(Fh) enter into any joint venture, partnership or similar agreement with respect to the voting of the capital stock of the Companyany Person;
(iii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which of the Company Company's Material Contracts, or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to under any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employeesCompany's Material Contracts, except in the ordinary course of business consistent business;
(j) make any Tax election inconsistent with past practice with respect to employees with an annual base salary not to exceed $100,000that, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent individually or in the ordinary course of business (other than aggregate, would adversely affect in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay any material respect the Tax liability or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant Tax attributes of the Company or any of its SubsidiariesCompany, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any newtaken as a whole, or materially increase benefits under settle or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate compromise any existing, Company Plan or benefit arrangement or any collective bargaining agreementmaterial Tax liability;
(vik) except as required by GAAP settle, compromise or under applicable Law and as concurred with by the Company’s independent auditors, make otherwise terminate any material change in accounting methodslitigation, principles claim or practicesother settlement negotiation;
(viil) fail to maintain insurance covering the Company's material properties and assets under substantially similar terms and conditions as the Company's current policies;
(m) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax ReturnMaterial Contract; or
(ixn) authorize any ofauthorize, or commit or agree to take any of, of the foregoing actions other than except as otherwise permitted by this Agreement. Upon the execution and delivery of this Agreement, the Company and Parent shall establish a committee (the "Advisory Committee") for the purpose of, to the extent permitted by applicable laws, monitoring and advising the Company regarding its business, operations, reductions in force, monthly expenditures, capital spending, asset acquisition or disposition, budgets, and financial results (collectively, the "Advisory Issues"), between such date and the Closing (the "Interim Period") and otherwise facilitating the efficient transition and combination of the respective businesses of Parent and the Company as promptly as practicable following the Closing. The Advisory Committee members shall be provided with such current financial and operational information as they may request, and shall, during normal business hours and on reasonable notice, have access to the executive officers and managers of the Company. All Advisory Issues shall be presented to the Advisory Committee, together with sufficient background information, prior to final determination of such issues by the Board of Directors or management of the Company. The Company shall consider the recommendations of the Advisory Committee prior to making a final decision on any Advisory Issues. The Company and Parent agree that (i) any information provided by the Company to Parent or Parent's Advisory Committee representative pursuant to this paragraph, (ii) the content of Advisory Committee materials, communications or meetings and (iii) oral communications by executive officers and managers of the Company to Parent's Advisory Committee representative shall be considered Evaluation Material (as such term is defined in that certain confidentiality agreement dated July 1, 2002 between the Company and Parent (the "Confidentiality Agreement")) and shall be subject to the terms and conditions of the Confidentiality Agreement, except that the three year limitation contained in the third paragraph of the Confidentiality Agreement shall be increased to five (5) years for such Evaluation Material. The Company and the Parent also agree that any Advisory Committee representative of the Parent shall be considered a Representative under the Confidentiality Agreement. The Advisory Committee at all times shall consist of one individual to be designated from time to time by the Chairman of the Board of Directors of Parent and two individuals to be designated from time to time by the Board of Directors of the Company and will be chaired by one of the individuals designated by Parent. All decisions of the Advisory Committee, which shall be dissolved as of the Closing, shall be agreed upon by the majority vote of the Advisory Committee members. Any actions of the Company which are in accordance with the decisions of the Advisory Committee shall be deemed to be in compliance with the Company's obligations and covenants set forth above in this Section 5.1. Nothing herein shall obligate the Board of Directors or management of the Company to (i) adopt the recommendations or proposals of the Advisory Committee or (ii) provide information to the Advisory Committee if the Board of Directors of the Company believes in good faith, after consultation with the Company's counsel that such action would be inconsistent with the fiduciary duties of the Board of Directors of the Company under applicable law. Any action of the Company taken in accordance with this paragraph shall be deemed to be in compliance with the Company's obligations and covenants set forth above in this Section 5.1. Without limiting the generality of the foregoing, the Company shall promptly notify Parent and the Advisory Committee of (i) any discussions or actions (of any type, preliminary or otherwise) relating to bankruptcy of the Company, (ii) any complaints, investigations or hearings (or communications indicating that the same may be contemplated) of any Governmental Entity, (iii) any material loss of or damage to any property, (iv) any material change in material existing relationships with outside third parties, (v) the institution or threat of any material litigation that could affect the Company, (vi) the failure of the Company to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it pursuant to this Agreement or (vii) any other matter that could result in a Material Adverse Effect. Notwithstanding the foregoing or anything contained herein to the contrary, nothing in this Agreement shall be construed to restrict the Company's operations in a manner which would violate applicable law. The Company shall indemnify and hold harmless Parent and those employees of Parent who render services to the Advisory Committee during the Interim Period under this Agreement from and against any claims or liabilities asserted against them relating to their services to the Advisory Committee hereunder (and Company hereby forever releases Parent and such persons from any claims by or liabilities to Company arising from or relating to such services to the Advisory Committee), provided that (i) such claims or liabilities did not result from acts or omissions (x) not in good faith or (y) which involve intentional misconduct or a knowing violation of law and (ii) such services were rendered in a manner reasonably and in good faith believed to be in or not opposed to the best interests of the Company. During the Interim Period, Parent shall cause all of its employees to use their best efforts to (i) avoid doing anything to the competitive disadvantage of the Company vis-a-vis Parent, (ii) not use to the advantage of Parent any confidential information of the Company obtained while performing services for or on behalf of the Company, (iii) not solicit any employees of the Company to terminate their relationship with the Company, and (iv) if requested by the Company to do so, cause each such employee of Parent to execute confidentiality and non-solicitation agreements in customary form in accordance with the foregoing.
Appears in 1 contract
Samples: Merger Agreement (Dset Corp)
Conduct of the Business of the Company. The Company covenants and agrees Except as to itself and its Subsidiaries thatpermitted or contemplated by this Agreement, as set forth on Schedule 4.1 or as required by applicable Legal Requirements, during the period from the date of this Agreement and continuing until the Effective Time, except earlier of the Closing and the termination of this Agreement (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) to the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned“Pre-Closing Period”), or (iv) as set forth on Section 5.1 of the Company Disclosure Letter, the Company (A) shall conduct its business in all material respects only in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without ParentPurchaser’s prior written consent (which consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), the Company shall conduct its business in the ordinary course consistent with past practice, in a commercially reasonable manner so as to maintain supplier, contractor, employee, regulatory and customer relationships, the value of the Company’s assets, including the Product, the Company’s accounts receivable, and the Company’s business as a going concern. Without limiting the generality of the foregoing, except as permitted or contemplated by this Agreement, as set forth on Schedule 4.1 or as required by applicable Legal Requirements, during the Pre-Closing Period, the Company shall not, without Purchaser’s prior consent (which consent shall not be unreasonably withheld, conditioned or delayed):
(i) (Aa) issue, sell, purchase sell or redeem deliver any shares of its equity securities or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends onsecurities convertible into, or make rights, warrants or options to acquire any other distributions equity securities;
(whether in cash, stock b) incur or property), in respect of, guarantee any of its capital stockIndebtedness, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parentborrowings under the Company’s existing credit facilities, (D) amend or otherwise change its or in any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory case in the ordinary course of business, business consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (Bc) except in the ordinary course of business, business consistent with past practice, modifysell, amend transfer, lease, license, mortgage or terminate any material contract to which the Company or encumber any of its Subsidiaries is a party properties or knowingly waive, release or assign any assets that are material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secretCompany’s business as currently conducted;
(ivd) discharge, settle, compromise, assign or satisfy make any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employeescapital expenditures, except in the ordinary course of business consistent with past practice with respect to employees with and in an annual base salary amount not to exceed in excess of $100,00050,000;
(e) make any acquisition (by purchase of securities or assets, merger, consolidation or otherwise) of any other Person, business or division;
(Cf) except to the extent required by applicable Law make any investment in, or by loan or advance to, any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (Person other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or practice;
(Eg) enter into or adopt increase in any newmaterial manner the compensation of, or materially increase benefits under bonuses to, any of its directors, officers or renew employees or enter into, establish, amend or terminate any employment, consulting, collective bargaining, 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 director, officer or other employee or consultant, other than: (other than automatic renewals i) as required pursuant to an existing Company applicable Legal Requirements or the terms of any Employee Benefit Plan or written agreement existing on other agreements in effect as of the date of this Agreement, the list of which on Part 2.9 of the Disclosure Schedule includes a specific reference to this Section 4.1(g); or (ii) increases in salaries, amend wages and benefits of employees or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties directors made in the ordinary course of business consistent with past practice);
(viiih) makemake or change any material election in respect of Taxes, revoke file any amended Tax Return, enter into any closing agreement, consent to any extension or amend waiver of the limitations period applicable to any Tax electionclaim or assessment relating to the Company, adopt or change any material accounting method in respect of accountingTaxes, extend enter into any Tax sharing or waive similar agreement, settle any claim or assessment in respect of Taxes, or surrender any right to claim a refund of Taxes, or take any other similar action relating to the application filing of any statute of limitation regarding Tax Return or the assessment or collection payment of any Tax, settle if such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the effect of increasing the Tax liability of the Company for any period ending after the Closing Date or decreasing any Tax attribute of the Company existing on the Closing Date;
(i) amend the Company’s organizational documents;
(j) adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization, merger, consolidation or other reorganization;
(k) enter into any Contract that would be a Company Significant Contract if in existence on the date hereof other than Inventory purchases for Products made in the ordinary course of business consistent with past practice;
(l) waive, release, settle, or compromise any Tax liability pending or refund threatened legal proceeding against or file in favor of the Company;
(m) terminate or fail to maintain in full force and effect or modify any amended Tax ReturnRegistration or Governmental Authorization, in each case, to the extent the consequences of such action or failure on the business or assets of the Company are or could reasonably be expected to be material in nature or amount;
(n) enter into, amend, modify, terminate or waive any material rights under any Company Significant Contract;
(o) transfer, assign, disclaim, abandon, or grant any license or sublicense of any material rights under or with respect to any Company IP or Company Licensed IP; or
(ixp) authorize any ofagree, in writing or commit or agree otherwise, to take any of, of the foregoing actions other than as provided for described in clauses “(a)” through “(q)” of this Section 5.1sentence.
Appears in 1 contract
Conduct of the Business of the Company. The Company covenants and agrees as to itself and its Subsidiaries that, from During the date of this Agreement and continuing until the Effective TimePre-Closing Period, except (iw) as set forth in Schedule 5.2, (x) to comply with the Acquired Companies’ obligations under this Agreement or as otherwise expressly contemplated or permitted by under this Agreement, (iiy) as required by Lawnecessary to comply with applicable Laws and the Acquired Companies’ Contractual obligations, or (iiiz) to the extent Parent shall otherwise consent in writing with Buyer’s Consent (which consent shall not be unreasonably withheld, delayed conditioned or conditioned), or delayed): (ivi) as set forth on Section 5.1 of the Company Disclosure Letter, shall (and cause the Company Acquired Companies to) (A) shall conduct its carry on the Acquired Companies’ business in all material respects only in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall (B) use their respective commercially reasonable best efforts to preserve substantially intact the Acquired Companies’ present business organization, and (iC) preserve their business organization intact, use commercially reasonable efforts to preserve the Company Contracts in force and maintain existing relations and goodwill Acquired Companies’ material relationships with customers, suppliers, distributors, creditorslicensors, lessors, officers, employees, business associates licensees and consultants, others to whom the Acquired Companies have Contractual obligations; and (ii) maintain except as set forth in Schedule 5.2, the Company shall not (and keep material properties and assets in good repair and condition, shall cause the Acquired Companies not to):
(iiia) maintain in effect all material governmental Permits pursuant to which amend the Organizational Documents of the Company or any other Acquired Company;
(b) split, combine or reclassify any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; providedcapital stock or issue or authorize the issuance of any other securities in respect of, however, that no action by the Company in lieu of or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):
(i) (A) issue, sell, purchase or redeem any in substitution for shares of its capital stock, or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, dividend or make any other distributions (whether distribution payable in cash, stock or property), other property whether or not in respect ofof the Company Stock or other equity interests;
(c) issue, sell, transfer, pledge, dispose of or encumber any shares of its capital stockstock or securities convertible into, or subscriptions, rights, warrants or options to acquire, or other Contracts of any character obligating it to issue any such shares or other convertible securities;
(d) enter into or adopt any plan or agreement of complete or partial liquidation or dissolution, or file a voluntary petition in bankruptcy or commence a voluntary Legal Proceeding for reorganization, arrangement, adjustment, release or composition of Indebtedness in bankruptcy or other similar Laws now or hereafter in effect;
(e) incur any indebtedness for borrowed money (other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles borrowings under the Line of incorporation or bylaws (or equivalent organizational documentsCredit Facilities), or guarantee any such indebtedness, or issue or sell any debt securities or guarantee any debt securities of others;
(Ef) make any acquisition ofcapital expenditures, capital additions or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, capital improvements in excess of $250,000100,000 in the aggregate;
(g) knowingly waive any material right of any Acquired Company under any Material Contract;
(h) acquire or agree to acquire by merging with, or by purchasing a material portion of the stock or assets of, or by any other manner, any business or any Entity, or otherwise enter into any joint venture, partnership or other similar Contract;
(i) sell, encumber or otherwise dispose of, lease or exclusively license any properties or material assets of any Acquired Company that are material to such Acquired Company;
(j) enter into any Material Contract, amend in any material respect any Material Contract or terminate any Material Contract, in each case, other than in the ordinary course of business, business consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(iik) incur make or change any Indebtedness material election in respect of Taxes, change any accounting method in respect of Taxes (other than the change from cash to accrual based accounting), settle any material claim or sellassessment in respect of Taxes, lease, sublease, license or permit to be subject Consent to any Lien, extension or waiver of the limitation period applicable to any material claim or assessment in respect of Taxes (other than a Permitted Lien, or otherwise dispose pursuant to customary extensions of any the due date for filing Tax Returns obtained in the ordinary course of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Propertybusiness of no more than seven months);
(iiil) (Ai) adopt, establish, enter into into, materially amend or terminate any new line 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 business the Agreement Date (except as required to comply with applicable Law or make by the terms of such existing Company Plan), (ii) increase the compensation or agree to make fringe benefits of, or grant any new capital expenditure in excess bonus to, any current employee, director or officer of $250,000 or that, in the aggregate, are in excess of $500,000, any Acquired Company other than in the ordinary course of business, business consistent with past practice, (Biii) except grant any severance or termination pay to any current director, officer or employee of any Acquired Company (provided that the Acquired Companies may make severance or termination payments to employees in accordance with the ordinary course terms of business, consistent with past practice, modify, amend agreements between the applicable Acquired Company and such employees or terminate any material contract a Company Plan in effect on the Agreement Date and made available to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunderBuyer), or (Civ) dispose ofhire or terminate (other than termination for cause) the employment of any employee with the title of vice president or above or employees with similar roles or responsibilities;
(m) waive, grant release, assign, compromise, commence, settle or permit agree to lapse settle any material Company Intellectual Property Rights or dispose of or disclose to any PersonLegal Proceeding, other than to Representatives of the Company waivers, releases, compromises or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except settlements in the ordinary course of business consistent with past practice that (i) involve only the payment of monetary damages not in excess of $25,000.00 individually or $50,000.00 in the aggregate and (ii) do not include the imposition of equitable relief on, or the admission of wrongdoing by, any Acquired Company;
(n) utilize any Cash to pay any Closing Date Indebtedness or Closing Date Transaction Expenses from 11:59 p.m. Eastern Time on the date immediately prior to the Closing until the Closing;
(o) make any loan to, or enter into any other transaction with, any director, manager, officer, employee or other Related Party of any Acquired Company (other than for compensation and benefits with respect to employees with any individual’s employment by or provision of services to an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Acquired Company or under any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any newPlan, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of routine advances for business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties expenses made in the ordinary course of business consistent with past practicebusiness);
(viiip) make, revoke change any cash management practices or amend otherwise delay payment of any Tax election, adopt accounts payable or other liability of any Acquired Company beyond its due date or the date when such liability would have been paid in the ordinary course of business;
(q) permit undisputed accounts payable to be more than 60 days old or change its practices and procedures in any method of accounting, extend or waive material respect with respect to the application of any statute of limitation regarding the assessment or collection of any Taxaccounts receivable, settle other than in the ordinary course of business;
(r) take any action that would reasonably be expected to prevent, delay or compromise impede the consummation of the Transactions, including any Tax liability or refund or file any amended Tax Returnaction that would reasonably be expected to result in a Company Material Adverse Effect; or
(ixs) authorize any of, agree or commit or agree to take any ofof the actions described in Section 5.2(a) through Section 5.2(r) Nothing herein shall require the Company to obtain Consent from the Buyer to do any of the foregoing if obtaining such Consent would reasonably be expected to violate applicable Law, including Antitrust Law. Notwithstanding anything to the contrary in this Agreement, nothing contained herein shall give to the Buyer, directly or indirectly, the foregoing actions other than as provided for in this Section 5.1right to control or direct the operations of the Acquired Companies prior to the Closing Date, and, prior to the Closing Date, each of the Buyer and the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its respective operations.
Appears in 1 contract
Samples: Stock Purchase Agreement (CURO Group Holdings Corp.)
Conduct of the Business of the Company. The Company covenants and agrees as to itself and its Subsidiaries that, from except as expressly permitted or required by this Agreement or the other Transaction Documents or otherwise consented to in writing by Parent, during the period commencing on the date of this Agreement hereof and continuing until the Effective Time, except earliest to occur of (iw) as expressly contemplated or permitted by this Agreementthe Acceptance Date, (iix) as required by Lawthe Compulsory Completion Date, (iiiy) the Scheme Effective Date and (z) the termination of this Agreement pursuant to the extent Parent shall otherwise consent in writing Section 8.1:
(which consent shall not be unreasonably withheld, delayed or conditioned), or (iva) Except as set forth on Section 5.1 Schedule 6.3 of the Company Disclosure Letter, the Company (A) shall conduct its business in all material respects only in the ordinary course and each of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall conduct their respective operations only according to their ordinary and usual course of business and shall use their respective commercially reasonable best efforts to (i) preserve intact their respective business organization intactorganization, preserve keep available the Company Contracts in force services of their officers and employees and maintain existing relations and goodwill satisfactory relationships with customerslicensors, suppliers, distributors, creditorsclients, lessors, officers, employees, customers and others having business associates and consultants, relationships with them;
(iib) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which Except as set forth on Schedule 6.3 of the Company or Disclosure Letter, neither the Company nor any of its Subsidiaries currently operates shall, subject always to the fiduciary duties of the Board of Directors and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by their obligation to comply with the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):Companies Laws:
(i) make any change in or amendment to its memorandum of association or its articles of association (or comparable governing documents);
(ii) issue or sell, or authorize to issue or sell, any Shares of its share capital or any other securities, or issue or sell, or authorize to issue or sell, any securities convertible into or exchangeable for, or options, warrants or rights to purchase or subscribe for, or enter into any arrangement or contract with respect to the issuance or sale of, any Shares of its share capital or any other securities, or make any other changes in its capital structure, except for (A) issue, sell, purchase the possible issuance by the Company of (x) Ordinary Shares upon the conversion of Preferred Shares or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than y) Ordinary Shares pursuant to the terms of any Company Plan vested Options or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting redemption of the capital stock of the Company;
(ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property)Preferred Shares in accordance with their terms;
(iii) (A) enter into any new line sell, pledge or dispose of business or make or agree to make sell, pledge or dispose of any new capital expenditure Shares or other equity interest owned by it in any other Person in excess of $250,000 or that, 10,000,000 in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employeesdeclare, pay or agree to pay set aside any pension, retirement allowance, termination or severance pay, bonus dividend or other material employee benefit to any employee, officer, director distribution or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent payment with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any newrespect to, or materially increase benefits under split, combine, redeem or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; or
(ix) authorize any ofreclassify, or commit purchase or agree to take any of, the foregoing actions other than as provided for in this Section 5.1.otherwise
Appears in 1 contract
Conduct of the Business of the Company. The Company covenants and agrees as to itself and its Subsidiaries that, All parties mutually agree that during the period from the date of this Agreement and continuing until the Effective Time, except (i) as expressly contemplated or permitted by earlier of the termination of this Agreement, (ii) as required by Law, (iii) Agreement pursuant to the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed provisions of Article X hereof or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure LetterClosing, the Company shall (Aunless otherwise required by this Agreement or the Investor has given its prior written consent to the Company, as the case may be) shall conduct carry on its business in all material respects only in the ordinary course of business, consistent with past practice, to pay its Liabilities and Taxes consistent with its past practices, to pay or perform other obligations when due consistent with its past practices, subject to any good faith disputes over such Liabilities, Taxes and other obligations and, to the extent consistent therewithwith such business, it to use reasonable efforts and institute all policies to preserve intact its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their present business organization intactorganization, keep available the services of its present officers and key employees, preserve the Company Contracts in force and maintain existing relations and goodwill its relationships with customers, suppliers, distributors, creditorslicensors, lessorslicensees, officersindependent contractors and other Persons having business dealings with it, employeesall with the express purpose and intent of preserving unimpaired its goodwill and ongoing businesses at the Closing. Except as expressly contemplated by this Agreement or disclosed in Schedules, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company will not, without the prior written consent of the Investor, voluntarily take or agree in writing or otherwise to take:
(a) any of the actions described in Section 4.26, as applicable;
(b) any other action that would make any of its Subsidiaries currently operates representations or warranties contained in this Agreement untrue or incorrect or prevent the applicable party (or parties) from performing or cause the applicable party (or parties) not to perform its agreements and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):covenants hereunder;
(ic) (A) issue, sell, purchase or redeem any issue additional shares of its or any Subsidiary’s their, as applicable, capital stock or grant any Company Security (warrants, options or other than pursuant rights to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any acquire shares of its or their, as applicable, capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, ;
(D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (Ed) make any acquisition ofcapital expenditures or commitments for additions to property, plant or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting equipment of the Company constituting capital stock of the Company;
assets individually in an amount exceeding twenty-five thousand dollars (ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property$25,000);
(iiie) (A) enter into incur any new line of business additional long-term debt, short-term debt or make liabilities to Company Shareholders or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secrettheir Affiliates;
(ivf) discharge, settle, compromise, assign distribute any assets or satisfy make any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction payments of any claim would result in kind to Company Shareholders or their Affiliates, except for reasonable rent payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000travel related expenses;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (Eg) enter into or adopt continue any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application commercial relationships of any statute of limitation regarding the assessment kind with Company Shareholders or collection of any Taxtheir Affiliates, settle or compromise any Tax liability or refund or file any amended Tax Return; or
(ix) authorize any of, or commit or agree to take any of, the foregoing actions other than as provided except for in this Section 5.1facilities and travel related matters.
Appears in 1 contract
Samples: Preferred Stock Purchase Agreement (Aims Worldwide Inc)
Conduct of the Business of the Company. The Company covenants and agrees as to itself and its Subsidiaries that, from During the date of this Agreement and continuing until the Effective TimePre-Closing Period, except (i1) as set forth in Section 4.2 of the Disclosure Schedule, (2) to the extent expressly contemplated required or permitted by this AgreementAgreement or any other Transaction Document, (ii3) as required by Law, necessary to ensure that the Company complies with applicable Laws (iii) to the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditionedincluding COVID-19 Measures), or (iv4) as set forth on Section 5.1 of the Company Disclosure Letter, the Company (A) shall conduct its business in all material respects only in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed conditioned or conditioned):delayed): (i) the Company shall use reasonable best efforts to (A) carry on its business in the ordinary course consistent with past practice, (B) preserve substantially intact its present business organization, (C) preserve its relationships with material customers, suppliers, distributors, licensors, licensees, Governmental Bodies and others to whom the Company has contractual obligations, (D) maintain the books and records of the Company in accordance with past practice, (E) preserve and maintain all of the Company Regulatory Permits, (F) keep available the services of its present officers, employees and agents, (G) perform and comply with all applicable Law; and (ii) the Company shall not:
(a) amend the Company Charter or the bylaws of the Company;
(b) split, combine or reclassify any of its capital stock or (except in connection with the conversion of Company Preferred Stock to Company Common Stock or the exercise of Company Options solely in connection with this Agreement) issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;
(c) issue, deliver, sell, disperse or pledge any shares of Company Capital Stock or securities convertible into, or subscriptions, rights, warrants or options to acquire, or other agreements or commitments of any character obligating it to issue any such shares or other convertible securities; provided, however, that the Company may issue shares of Company Common Stock in connection with the exercise of Company Options outstanding as of the date of this Agreement in accordance with their terms and the Equity Incentive Plans as in effect on the date of this Agreement;
(d) enter into or adopt any plan or agreement of complete or partial liquidation or dissolution, or file a voluntary petition in bankruptcy or commence a voluntary legal procedure for reorganization, arrangement, adjustment, release or composition of indebtedness in bankruptcy or other similar Laws now or hereafter in effect;
(e) make any capital expenditures, capital additions or capital improvements, in excess of $50,000 in the aggregate (other than in the ordinary course of business consistent with past practice or in accordance with the budget for capital expenditures previously made available to Parent);
(f) (i) reduce the amount of any insurance coverage provided by existing Insurance Policies or (ii) fail to maintain in full force and effect, or fail to renew, insurance coverage consistent with past practices;
(g) acquire or agree to acquire by merging with, or by purchasing a portion of the stock or assets of, or by any other manner, any business or any Entity, other than as permitted in clause (e) above;
(h) transfer, sell, lease, abandon, allow to lapse, license, or grant any other right to any properties or assets of the Company which are material to the Company;
(i) make, change or revoke any material election in respect of Taxes, change any accounting method in respect of Taxes, settle any material claim or assessment in respect of Taxes, file any amended Tax Return, or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;
(Aj) issueexcept in the ordinary course of business if the Closing has not occurred within thirty (30) days of the date hereof increase in any manner the compensation (including incentive compensation) or wage rate, sellpension, purchase welfare, fringe or redeem other benefits, severance, or termination pay of any shares director, employee, independent contractor, or other service provider of its the Company, except for increases provided for in any Contracts or any Subsidiary’s capital stock Company Plans in effect on the date hereof or any Company Security set forth in Section 4.2(j) of the Disclosure Schedule;
(other than k) except as required pursuant to the terms of any Company Plan in effect as of the date hereof or set forth in Section 4.2(k) of the Disclosure Schedule, or as otherwise required by applicable Law (1) establish, adopt or materially amend any Company Plan or any awards made under arrangement that would have been a Company Plan had it been entered into prior to the Company Equity Plans), date of this Agreement; (B2) effect grant any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends onnew awards, or make amend or modify the terms of any outstanding awards, under any Company Plan; (3) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other distributions (whether in cashway secure the payment, stock of compensation or property), in respect of, benefits under any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets Company Plan (other than accelerated vesting of Company Options as provided in Section 1.6 (Treatment of Company Options)); (4) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Plan that is required by applicable Law to be funded or change the purchase of supplies manner in which contributions to such plans are made or inventory the basis on which such contributions are determined, except as may be required by the Accounting Principles; or (5) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business, consistent with past practice) to any employee of the Company;
(l) utilize or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or pricesleverage social insurance programs and/or specific legislation, in excess of $250,000, other than each case related to COVID-19;
(m) except in the ordinary course of businessbusiness if the Closing has not occurred within thirty (30) days of the date hereof (i) hire or engage any management or executive employees, consistent with past practiceconsultants, independent contractors, or other service providers; (Fii) terminate the employment or engagement of any employee, consultant, independent contractor, or other service provider, other than terminations for cause; (iii) enter into or amend the terms of any employment agreement, consulting agreement, independent contractor agreement; and (iv) enter into or amend the terms of any Contract or agreement providing for severance, change of control, bonus, or other similar payment to any Person;
(n) announce, implement or effect any reduction-in-force, lay-off, furlough, or other program resulting in the termination of employment of employees (other than terminations of individual employees for cause);
(o) become a party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization;
(p) make any changes in its methods of accounting or accounting practices (including with respect to reserves), other than as required by GAAP;
(q) waive, release, assign, compromise, commence, settle or agree to settle any Legal Proceeding;
(r) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement (provided that the Company may enter into any Material Contract involving a license by Company of Company Intellectual Property pursuant to the standard form of end user license agreement that has been made available to Parent prior to the date of this Agreement, without material modification);
(s) amend, modify or terminate any Material Contract (provided that the Company may enter into any Material Contract involving a license by Company of Company Intellectual Property pursuant to the standard form of end user license agreement that has been made available to Parent prior to the date of this Agreement, without material modification);
(t) make any loans, advances, guarantees or capital contributions to or investments in any Person;
(u) incur Debt (including the issuance or sale of any debt securities or warrants or other rights to acquire any debt security of the Company);
(v) declare, set aside, make or pay any cash dividend or distribution, any non-cash dividend or any other non-cash distribution with respect to any of its capital stock or enter into any agreement with respect to the voting of the its capital stock of the Companystock;
(iiw) create or incur any Indebtedness or Lien;
(x) sell, lease, subleaselicense, license or permit assign, transfer, abandon, allow to be subject to any Lien, other than a Permitted Lienlapse, or otherwise dispose of (whether by merger, stock or asset sale or otherwise) any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company Company’s or any of its Subsidiaries is Subsidiaries’ assets, rights, securities, properties, interests or businesses (other than Intellectual Property) (provided that the Company may enter into any Material Contract involving a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material license by Company of Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) pursuant to the extent required by applicable Law or by written agreements or Company Plans existing standard form of end user license agreement that has been made available to Parent prior to the date of this Agreement that have been disclosed Agreement, without material modification or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except otherwise in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreementpractice), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(viy) except as required by GAAP sell, lease, license, sublicense, assign, transfer, abandon, allow to lapse expire, create or under applicable Law and as concurred with by the Company’s independent auditorsincur any Lien on, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts dispose of, any Company Intellectual Property or disclose any Trade Secrets of the Company or any of its Subsidiaries or any of its or their respective Affiliates or customers to any successor thereto from engaging or competing in other Person (provided that the Company may enter into any line Material Contract involving a license by Company of business or product line or in any geographic area (excluding any marketing Company Intellectual Property pursuant to the standard form of end user license agreement relating that has been made available to cross-promotional campaigns with third parties made in Parent prior to the ordinary course date of business consistent with past practicethis Agreement, without material modification);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; or
(ixz) authorize any of, agree or commit or agree to take any of, of the actions described in clauses (a) through (y) of this Section 4.2 (Conduct of the Business of the Company). Nothing herein shall require the Company to obtain consent from Parent to do any of the foregoing actions other than as provided for in this Section 5.1if obtaining such consent might reasonably be expected to violate applicable Law.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Bionano Genomics, Inc)
Conduct of the Business of the Company. The Company covenants and agrees as to itself and its Subsidiaries that, from (a) From the date hereof through the Closing Date or the termination of this Agreement and continuing until Agreement, as the Effective Timecase may be, except as otherwise permitted or contemplated by this Agreement or consented to in writing by the Buyer, the Company will (i) as expressly contemplated or permitted by this Agreementpreserve in all material respects the Business of the Company, (ii) as required by Law, use its reasonable efforts to keep available to the Company the services of all current officers and key employees identified on Schedule 4.36 and (iii) use its reasonable efforts to preserve in all material respects the extent Parent shall goodwill of the suppliers, customers, employees and others currently having business relations with the Company in a manner consistent with its normal practice.
(b) From the date hereof through the Closing Date or the termination of this Agreement, as the case may be, except as otherwise consent permitted or contemplated by this Agreement or consented to in writing (by the Buyer, which consent shall not be unreasonably withheldwithheld or delayed, delayed or conditioned), or (iv) as set forth on Section 5.1 the Company will continue the operation of the Business of the Company Disclosure Letter, the Company (A) shall conduct its business in all material respects only in the ordinary course of business, and in a manner consistent with past its normal practice, andand to maintain the assets, to the extent consistent therewith, it properties and its Subsidiaries shall use their respective reasonable best efforts to (i) preserve their business organization intact, preserve rights of the Company Contracts in force a manner consistent with its normal practice the date hereof, subject to ordinary wear and maintain existing relations and goodwill with customerstear. Without limiting the generality of the foregoing, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets except as otherwise permitted or contemplated by this Agreement or consented to in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action writing by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provisionBuyer, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheldwithheld or delayed, delayed or conditioned):the Company will not permit the Company to:
(i) (A) issueincur, sell, purchase discharge or redeem satisfy any shares of its obligation or liability or any Subsidiary’s capital stock Security Interest, equities or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans)claims, (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory except in the ordinary course of business, business in a manner consistent with past practiceits normal practice or in connection with the performance of this Agreement;
(ii) incur any debt or stock (whether by way increase the amount of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000existing debt, other than in the ordinary course of business, business in a manner consistent with past its normal practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into increase or establish any new line reserve for taxes or other liabilities on its books or otherwise provide therefore, except for taxes or other liabilities arising in the ordinary course of business in a manner consistent with its normal practice since December 31, 2005; write up or down the value of inventory or determine as collectible any notes or accounts receivable that were previously considered to be uncollectible; or voluntarily make any change in any of its methods of accounting or in any of its accounting principles or practices except as required by GAAP or applicable law or in a manner consistent with its normal practice;
(iv) purchase, lease, sell, assign or transfer any material asset, property or business or waive or permit to lapse any material right, except in the ordinary course of business; or make or agree to make authorize any new capital expenditure in excess of $250,000 or that, 50,000 in the aggregate;
(v) make any loan to any Shareholder or any relative or Affiliate of any Shareholder, or declare, set aside or pay to any Shareholder any dividend or other distribution in respect of its capital stock, transfer any asset or pay any money to any Shareholder or any relative or Affiliate of any Shareholder other than the payment of wages, salaries, bonuses and other benefits in the ordinary course of business to Shareholders who are also employees of the Company; or enter into or agree to enter into any transaction with or for the benefit of any Shareholder or any relative or Affiliate of any Shareholder other than the transactions contemplated pursuant to this Agreement;
(vi) reclassify or change in excess any manner the outstanding shares of $500,000capital stock of the Company or issue or agree to issue, sell, transfer, pledge, encumber or deliver any stock, bond, debenture or other security of the Company or any warrant, obligation, subscription, option, convertible security or other commitments under which any additional shares of capital stock of the Company may be authorized, issued or transferred from treasury except as contemplated by this Agreement and the other Transaction Documents;
(vii) except as set forth in Schedule 6.03(b)(vii), grant any increase in the compensation payable to any officer, director, consultant, employee or agent, except for increases in the compensation payable in the ordinary course of business to employees in amounts and at times consistent with past practice; fail to pay or accrue for compensation payable to officers, directors, consultants, employees or agents in compliance with existing agreements or arrangements or consistent with prior periods; enter into or amend any contract for the employment of any officer, employee or other person that is not terminable upon 30 days notice or less without material liability to the Company; enter into any contract or collective bargaining agreement with any labor union; enter into or agree to enter into any bonus, pension, profit-sharing, retirement, stock purchase, stock option, deferred compensation, incentive compensation, hospitalization, insurance or similar plan, contract or understanding providing for employee benefits, other than in the ordinary course of business, business consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(ivviii) discharge, settle, compromise, assign or satisfy enter into any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employeescontract, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary practice, that is not to exceed $100,000, (C) except terminable upon 30 days notice or less without material liability to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) ; enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made contract, except in the ordinary course of business consistent with past practice), continuing for a period of more than three months from its date that is not terminable upon 30 days notice or less without material liability to the Company;
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; or
(ix) authorize enter into any ofagreement or instrument, except in the ordinary course of business consistent with past practice, relating to the borrowing or commit lending of money or agree extension of credit or guarantee or indemnify any person or entity with respect to take any ofobligation for borrowed money or otherwise or make or permit to be made any amendment, modification, cancellation or termination of any material contract, agreement, lease, license, finance agreement or written evidence of indebtedness, except as contemplated by this Agreement;
(x) extend credit to any customer in excess of amounts in accordance with past practice or depart from the foregoing actions other than as provided for normal and customary trade, discount and credit policies of the Company;
(xi) settle any administrative or judicial proceedings;
(xii) amend the certificate of incorporation or the bylaws of the Company in this Section 5.1.a manner that would materially adversely affect or delay the consummation of the transactions contemplated hereby; or
Appears in 1 contract
Conduct of the Business of the Company. The Company covenants and agrees (a) Except as to itself and its Subsidiaries thatotherwise expressly provided in this Agreement, during the period from the date of this Agreement and continuing until to the Effective Time, except (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) to the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 members of the Company Disclosure Letter, the Company (A) shall Group will conduct its business in all material respects only in the their respective operations according to their ordinary and usual course of business, business and consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall will use their respective reasonable best efforts to (i) preserve intact their respective business organization intactorganizations, preserve to keep available the Company Contracts in force services of their officers and employees and to maintain existing relations and goodwill satisfactory relationships with customerslicensors, licensees, suppliers, contractors, distributors, creditorscustomers and others having material business relationships with them. Without limiting the generality of the foregoing, lessorsand except as otherwise expressly provided in this Agreement, officersprior to the Effective Time, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which no member of the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not toGroup will, without Parent’s the prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):of Parent:
(i) amend its Articles of Incorporation, bylaws, partnership or joint venture agreements or other organizational documents;
(Aii) authorize for issuance or issue, sellsell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or redeem otherwise) any shares stock of its any class or any Subsidiary’s capital stock other securities or any Company Security (other than pursuant to interests, except as required by the terms of any Company Benefit Plan existing on the date hereof, or any awards made under options, warrants, rights or other securities outstanding as of the Company Equity Plans)date hereof and disclosed pursuant to this Agreement;
(iii) split, (B) effect combine or reclassify any recapitalization, reclassification, shares of its capital stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock or property), property or any combination thereof) in respect of, any of its capital stock, other than dividends or redeem or otherwise acquire any of its securities or any securities of their respective Subsidiaries and distributions by a direct or indirect wholly owned Subsidiary Partnerships; provided, however, that the Company may pay to its parentshareholders the dividend declared by the Company's Board of Directors on March 2, 2001, in an amount equal to $0.040 per share of Company Common Stock;
(Div) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory except in the ordinary course of businessbusiness (A) incur or assume any Funded Debt (as defined below) not currently outstanding, consistent with past practice(B) assume, guarantee, endorse or stock otherwise become liable or responsible for the obligations of any person, other than a Subsidiary or Partnership, (whether by way of mergerC) enter into any Contract, consolidationor alter, tender offeramend, share exchange modify or other activity) in exercise any transaction or option under any series of related transactions for an aggregate purchase price or prices, in excess of $250,000existing Contract, other than in the ordinary course of businessbusiness or in connection with the transactions contemplated by this Agreement, or (D) authorize any single capital expenditure which is in excess of $25,000 or capital expenditures which are, in the aggregate, in excess of $25,000, other than capital expenditures pursuant to Contracts entered into prior to the date hereof or reflected in the Company's fiscal 2002 capital budget previously furnished to Parent, and other than routine repairs to and maintenance of the Company's equipment;
(v) make any loans, advances or capital contributions to, or investments in, any other person, including, without limitation, the purchase of the securities of any other person;
(vi) sell any securities of any person, which are owned by any member of the Company Group on the date hereof, in any single transaction or series of transactions, for consideration which, individually or in the aggregate, is in excess of $25,000;
(vii) adopt or amend (except as may be required by Law or as provided in this Agreement) any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, restricted stock, pension, retirement, deferred compensation, employment, severance or other employee benefit agreements, trusts, plans, funds or other arrangements for the benefit or welfare of any director, officer or employee, or (except for normal increases in the ordinary course of business that are consistent with past practicepractices and that, in the aggregate, do not result in a material increase in benefits or (Fcompensation expense) enter into increase in any agreement with respect to manner the voting of the capital stock of the Company;
(ii) incur any Indebtedness compensation or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose fringe benefits of any of its material properties director, officer or assets employee or pay any benefit not required by any existing plan or arrangement (including, without limitation, the granting of stock options, stock appreciation rights, shares of restricted stock or performance units) or enter into any Company Owned Real Property Contract, agreement, commitment or arrangement to do any Company Ground Leased Property)of the foregoing;
(iiiviii) except as set forth on Exhibit 6.1 attached hereto, acquire, sell, lease or dispose of any material assets outside the ordinary course of business;
(Aix) enter into take any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, action other than in the ordinary course of business, consistent with past practice, (B) except business and in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except in the ordinary course of business manner consistent with past practice with respect to employees with an annual base salary not to exceed $100,000accounting policies or practices;
(x) make any material Tax election or settle or compromise any material Tax liability;
(xi) except for the payment of professional fees, pay, discharge or satisfy any material claims, liabilities or obligations (Cabsolute, accrued or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business of liabilities reflected or reserved against in the Company's audited consolidated balance sheets as of March 31, 2000, or incurred in the ordinary course of business since the date thereof; or
(xii) hold any meeting of its shareholders except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant request of the Company shareholders entitled to call a meeting under the Company's bylaws or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreementVSCA;
(vixiii) except as required by GAAP take any action that would or under applicable Law and as concurred with by the Company’s independent auditors, make any material change is reasonably likely to result in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any the conditions set forth in Article VII not being satisfied as of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax ReturnClosing Date; or
(ixxiv) authorize any of, agree in writing or commit or agree otherwise to take any of, of the foregoing actions other than as provided for in this Section 5.1actions.
Appears in 1 contract
Conduct of the Business of the Company. The Company covenants and agrees Except as to itself and its Subsidiaries thatcontemplated by this Agreement, during the period from the date of this Agreement and continuing until to the Effective Time, the Company and its subsidiaries will each conduct its operations in all material respects according to its ordinary course of business, and will use all reasonable efforts to preserve intact its business organization and to maintain its relationships with suppliers, distributors, customers and others having business relationships with it. The Company will confer at Parent's request on a regular and frequent basis with representatives of Parent to report upon the status of operations. Without limiting the generality of the foregoing, and except (i) as otherwise expressly contemplated or permitted by this Agreement, prior to the Effective Time, neither the Company nor any of its subsidiaries will, without the prior written consent of Parent:
(a) amend its Articles of Incorporation or Amended By-Laws (or equivalent instruments);
(b) authorize for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (whether through the issuance or granting of additional options, warrants, commitments, subscriptions, rights to purchase or otherwise) any shares of capital stock of any class (including, without limitation, the Shares) or any securities convertible into shares of capital stock of any class, or designate any class or series of shares of capital stock of the Company from the undesignated shares of capital stock of the Company;
(c) split, combine or reclassify any shares of its capital stock (including, without limitation, the Shares), declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock, or redeem or otherwise acquire any shares of its capital stock; provided, however, that any of the Company's wholly-owned subsidiaries may declare, set aside or pay any dividend or other distribution with respect to their capital stock;
(d) (i) create, incur or assume any indebtedness for money borrowed (including obligations in respect of capital leases), except for short-term borrowings incurred in the ordinary course of business and prepayable at any time in accordance with their terms without penalty; (ii) as required by Lawassume, guarantee, endorse or otherwise become liable or responsible (iiiwhether directly, contingently or otherwise) to for the extent Parent shall otherwise consent in writing obligations of any person other than any subsidiary of the Company; or (which consent shall not be unreasonably withheldiii)make any loans, delayed advances or conditioned)capital contributions to, or (iv) as set forth on Section 5.1 investments in, any person other than any of the Company Disclosure Lettersubsidiaries of the Company, except for customary loans or advances to employees or trade credit in the Company ordinary course of business;
(Ae) shall conduct its business in all material respects only except in the ordinary course of business, consistent with past practicesell, andtransfer, mortgage or otherwise dispose of or encumber, any business, subsidiary, assets that are material to the extent consistent therewith, it Company and its Subsidiaries shall use their respective reasonable best efforts subsidiaries taken as a whole, or fixed assets that individually have a value on the Company's books in excess of $25,000;
(f) settle or compromise any pending or threatened suit, action or claim in which the amount involved is greater than $25,000 or which is material to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customersits subsidiaries taken as a whole or which relates to the transactions contemplated hereby or modify, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company amend or terminate any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; providedMaterial Contracts in any material respects or waive, however, that no action by the Company release or its Subsidiaries with respect to matters specifically addressed by assign any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed material rights or conditioned):claims;
(ig) make any material tax election or any material accounting charge or permit any insurance policy naming it as a beneficiary or a loss payable payee to be canceled or terminated without notice to Parent;
(h) except for (A) issueincreases in salaries, sell, purchase or redeem any shares bonuses and severance benefits as contemplated in Section 5.1(h) of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans)Disclosure Schedule, (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than dividends salary and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory wage increases and bonuses in the ordinary course of businessbusiness and (C) salary and wage increases that may be required by law, consistent with past practice) grant any material increase in the compensation payable or to become payable to any of its officers or employees or establish, adopt, enter into, make any new grants or awards under, be obligated to grant any awards under, or amend, any collective bargaining, bonus, profit sharing, thrift, compensation, stock (whether by way of merger, consolidation, tender offer, share exchange option or other activityequity, pension, retirement, incentive or deferred compensation, employment, retention, termination, severance, health, life or other welfare, fringe or other plan, agreement, trust, fund, policy or arrangement for the benefit of any current or former directors, officers or employees, or grant or pay any benefit not required by any existing plan or arrangement;
(i) in change any transaction of the accounting principles used by it, unless required by GAAP;
(j) acquire any business or stock, merge or consolidate with any series of related transactions for an aggregate purchase price other person or pricessell, in excess of $250,000, encumber or otherwise transfer any business or material portion thereof;
(k) other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make Material Contracts; or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to do any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; or
(ix) authorize any of, or commit or agree to take any of, the foregoing actions other than as provided for in this Section 5.1foregoing.
Appears in 1 contract
Samples: Merger Agreement (Incstar Corp)
Conduct of the Business of the Company. The Company covenants and agrees as to itself and its Subsidiaries that, from (a) From the date of this Agreement and continuing until hereof through the Effective Time, except (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) to the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure LetterClosing Date, the Company (A) shall conduct its business in all material respects only in the ordinary course of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective commercially reasonable best efforts to (i) preserve their the business organization intact, preserve of the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultantsthe Subsidiaries, (ii) maintain keep available to the Company and keep material properties the Subsidiaries the services of all current officers and assets in good repair substantially all key employees and condition, (iii) maintain in effect all material governmental Permits pursuant to which preserve for the Buyer the goodwill of the suppliers, customers, employees and others having business relations with the Company and the Subsidiaries.
(b) Except as set forth on Schedule 6.3(b), from the date hereof through the Closing Date, except as otherwise permitted by this Agreement or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action consented to in writing by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent Buyer (which consent shall may not be unreasonably withheldwithheld or delayed and, delayed in any event, will be granted or conditioned):denied within 2 Business Days of the request or otherwise is deemed to be given), the Company will continue the operation of the business of the Company and the Subsidiaries in the ordinary course, and will maintain the assets, properties and rights of the Company and the Subsidiaries in at least as good order and condition as exists on the date hereof, subject to ordinary wear and tear. Without limiting the generality of the foregoing, except as otherwise permitted by this Agreement or consented to in writing by the Buyer, neither the Company nor the Subsidiaries will:
(i) (A) issueincur, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property), in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(ii) incur any Indebtedness or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign discharge or satisfy any claim, whether obligation or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company liability or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employeesLiens, except in the ordinary course of business consistent or in connection with past practice with respect to employees with an annual base salary not to exceed $100,000the performance of this Agreement;
(ii) increase or establish any reserve for Taxes or other liabilities on its books or otherwise provide therefor, (C) except for Taxes or other liabilities relating to the extent required by applicable Law or by any existing ordinary course operations of the Company Plan or written agreement existing on since the date of this Agreement that has been disclosed the Balance Sheet or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent as may be required by applicable Law GAAP; write up or by down the value of inventory or determine as collectible any existing Company Plan notes or written agreement existing on the date of this Agreement accounts receivable that has been disclosed or made available were previously considered to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreementbe uncollectible, except for agreements for newly hired employees write-ups or write-downs in the ordinary course of business consistent accordance with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice); or voluntarily make any change in any of its methods of accounting or in any of its accounting principles or practices;
(iii) purchase, lease, sell, assign or transfer any asset, property or business or waive or permit to lapse any right, except in the ordinary course of business; or make or authorize any capital expenditure for additions to plant and equipment in excess of $500,000 in the aggregate, except as may have been necessary for ordinary repair, maintenance and replacement of plant or equipment or as is in accordance with the budgeted capital expenditures previously made available to the Buyer;
(iv) make any loan to any shareholder or any relative or affiliate of any shareholder, or declare, set aside or pay to any shareholder any dividend or other distribution in respect of its capital stock, transfer any asset or pay any money to any shareholder or any relative or affiliate of any shareholder other than the payment of wages or salaries to shareholders who are also employees of the Company in the ordinary course of business and as disclosed on Schedule 4.11 and the payment of directors' fees at rates consistent with past practice; or enter into, agree to enter into or consummate any transaction with or for the benefit of any shareholder of the Company or any relative or affiliate of any shareholder other than the transactions contemplated pursuant to this Agreement;
(v) grant any increase in the compensation payable to any officer, director, consultant, employee or agent of the Company or any Subsidiary, except for increases in the compensation (A) payable in the ordinary course of business to employees (other than Key Employees) in amounts and at times consistent with past practice, (B) required by applicable Law or (C) required under the terms of any Non-ERISA Plan or ERISA Plan;
(vi) enter into, amend, modify, terminate or cancel any Material Contract;
(vii) extend credit in excess of $1,000,000 to any customer who was not a customer before the date of this Agreement or depart from the normal and customary trade, discount and credit policies of the Company;
(viii) make, settle any material administrative or judicial proceedings;
(ix) make or revoke or amend any material Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; or
(ixx) authorize commit to do any ofof the foregoing.
(c) From the date hereof through the Closing Date, the Company will comply in all material respects with all applicable statutes, regulations, orders and restrictions of the United States of America, all states and other subdivisions thereof, all applicable foreign jurisdictions, all agencies and instrumentalities of the foregoing and all national and international self-regulatory bodies and authorities.
(d) From the date hereof through the Closing Date, each of the Sellers shall cause the Company to not: (i) reclassify, combine, split, subdivide, redeem or otherwise change in any manner the outstanding shares of capital stock of the Company or any Subsidiary (other than repurchases of Shares held by former employees of the Company and the Subsidiaries upon the termination of their employment and in a manner consistent with past practice), or commit issue or agree to take issue, sell, transfer, pledge, encumber or deliver any ofstock, bond, debenture or other security of the foregoing actions Company or any Subsidiary (other than the delivery and/or sale of Shares pursuant to the exercise of options outstanding as of the date hereof; provided, that the Sellers shall cause the Company to notify the Buyer of any such issuance within two Business Days following any such exercise) or (ii) amend the certificate of incorporation or the by-laws of the Company or any Subsidiary other than as provided for in this Section 5.1contemplated by the Framework Agreement, or (iii) commit to do either of (i) or (ii).
(e) The Company will not take any action that could be expected to materially delay or have a material adverse effect on the ability of the parties to consummate the transaction.
Appears in 1 contract
Conduct of the Business of the Company. The Company covenants and agrees Except as otherwise expressly permitted by this Agreement, as may be required by applicable law or as may be consented to itself and its Subsidiaries thatin writing by Purchaser, from the date of this Agreement and continuing until to the Effective TimeSyntroleum Closing Date or the date, except if any, on which this Agreement is earlier terminated pursuant to Section 8.1 (the “Interim Period”), Seller shall (i) as vote, and cause its representatives on the management committee of the Company to vote, to cause the Company to maintain the Geismar Facility in stand-by mode consistent with past practice, (ii) provide 50% of the funding therefor, and (iii) use commercially reasonable efforts to preserve intact the Company’s current business organization and preserve the Company’s relationships with customers, suppliers, licensors, licensees, and others having business dealings with the Company. Without limiting the generality of the foregoing, and except for matters (i) set forth in the Seller Disclosure Schedules, or (ii) expressly contemplated or permitted by this Agreement, without the prior written consent of Purchaser, Seller shall not:
(iia) as required by Law, (iii) approve or propose any amendments to the extent Parent shall otherwise consent in writing Company Governing Documents;
(which consent shall not be unreasonably withheld, delayed or conditioned)b) transfer ownership of, or (iv) as set forth any interest in Seller’s Interest, permit any Encumbrance on Section 5.1 Seller’s Interest, or permit the Company to issue, deliver, sell, pledge, transfer, dispose of or Encumber any membership, equity or voting interests of the Company Disclosure Letteror any securities convertible into, exchangeable or exercisable for or representing the right to subscribe for, purchase or otherwise receive any such membership, equity or voting interests, or any stock appreciation rights, “phantom” stock rights, performance units, rights to receive membership, equity, voting interests or other rights that are linked to the value of the membership interests of the Company or the value of the Company or any part thereof;
(Ac) shall conduct its business in all material respects only in permit the ordinary course Company to acquire or redeem, directly or indirectly, or amend the terms of, any membership or equity interests of business, consistent with past practice, and, to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts Company;
(d) permit the Company to (i) preserve their business organization intactadjust, preserve the Company Contracts in force and maintain existing relations and goodwill with customerssplit, supplierscombine, distributorsrecapitalize or reclassify its membership interests, creditors, lessors, officers, employees, business associates and consultants, or (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):
(i) (A) issue, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside aside, make or pay any dividends on, dividend or make any other distributions distribution (whether in cash, stock or property), in respect of, property or any combination thereof) on any of its membership interests;
(e) permit the Company to raise any capital stockwhether by issuance of debt, equity or otherwise, other than dividends and distributions capital requests necessary to maintain the Geismar Facility in stand-by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than mode in accordance with the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting practice of the capital stock members of the Company;
(iif) incur permit the Company to make any Indebtedness or sell, lease, sublease, license or permit to be subject change to any Lienof the accounting methods, other than a Permitted Lienprinciples or practices used by the Company, except as required by any applicable Requirement of Law or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property)GAAP;
(g) permit the Company to (i) enter into any agreement (including any closing agreement) with any Tax Authority in respect of Taxes, (ii) amend any income or other material Tax Return; (iii) file any Income or other material Tax Return unless such Tax Return is filed in the ordinary course of business and a copy of such Tax Return has been submitted to Purchaser for review a reasonable period of time prior to filing; or (iv) engage in any of the following to the extent that such action would reasonably be expected to increase any Tax Liability or reduce any Tax attribute of Purchaser or the Company for any Post-Closing Tax Period (and regardless of impact, in all events Seller shall inform Purchaser to the extent that it takes any of the following actions): (A) make or change or rescind any Tax election; (B) adopt or change any Tax accounting method; (C) settle or compromise any Tax Liability or any Tax claim or assessment, (D) request a Tax ruling or (E) enter into a Tax Sharing Agreement;
(h) with respect to any officer, employee or Management Committee Member of the Company, or as required by the terms of any existing agreement between the Company and such officer, director or employee, or any Benefit Plan as in effect on the date hereof, permit the Company to (i) grant any loan or increase in compensation (including incentive compensation), benefits or perquisites, (ii) grant any increase in severance or termination pay or termination benefits, (iii) enter into any employment, loan, retention, consulting, indemnification, or similar agreement, (iv) enter into any change of control, severance, termination or similar agreement, (v) amend, waive or otherwise modify in any material respect any of the terms of any employee equity incentive award or equity incentive plan of the Company, or (vi) establish or amend any Benefit Plan or trust agreement or other operative document relating to any Benefit Plan except as may be required by Law;
(i) permit the Company to enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any outside of its Subsidiaries is a party existing business or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract agreement or arrangement that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area area;
(excluding j) permit the Company to (i) commence any marketing Proceeding, or (ii) compromise, settle or agree to settle any Proceeding;
(k) except for Permitted Liens or in the ordinary course of business, permit the Company to sell, pledge, dispose of, transfer, lease, license or encumber, or authorize the sale, pledge, disposition, transfer, lease, license or Encumbrance of, any assets of the Company;
(l) permit the Company to incur or modify any Indebtedness or authorize or make any capital expenditures;
(m) permit the Company to (i) adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company other than a liquidation as contemplated by this Agreement, or (ii) acquire (by merger, amalgamation, consolidation, or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or division thereof or any material equity interest therein;
(n) take any action contemplated by Article IX of the Company Operating Agreement (except as contemplated by this Agreement) or make any new capital expenditures or make any election under Schedule G to the Company Operating Agreement;
(o) permit the Company to amend, modify, extend, renew or terminate, other than in accordance with its terms in effect as of the date hereof, any existing real property lease, or enter into any new lease, sublease, license or other agreement relating for the use or occupancy of any real property, other than leases entered into in the ordinary course of business on terms materially consistent with past practice and current plans previously disclosed to cross-promotional campaigns with third parties made Purchaser in writing;
(p) permit the Company to write up, write down, or write off the book value of any assets, other than in the ordinary course of business consistent with past practice)practice or as required by GAAP;
(viiiq) makepermit the Company to enter into any Contract, revoke or materially modify, amend, terminate or cancel any existing Contract with obligations or benefits in excess of $25,000 either individually or in the aggregate, or for terms in excess of four months, except with the prior written consent of Purchaser, not to be unreasonably withheld or delayed;
(r) take any action or permit the Company to enter into any transaction or take any other action that would reasonably be expected to prevent or materially delay the completion of the Membership Purchase or result in any of the conditions set forth in Article VII not being satisfied;
(s) permit the Company to enter into, materially amend or materially modify any Tax electionContract with any members, adopt Affiliates, officers or change Management Committee Member of the Company;
(t) permit the Company to amend, agree to amend, or allow to expire without renewal any method of accountingthe Company’s Permits;
(u) permit the Company to transfer or license to any Person any of the Company’s Proprietary Rights;
(v) permit the Company to make of record any statement regarding any Proprietary Right in any judicial or administrative proceedings, extend without the prior written consent of Parent (such consent not to be unreasonably withheld or waive delayed), except to the application extent necessary to avoid immediate loss of rights;
(w) permit the Company to petition any statute Governmental Authority for any grant, loan, loan guarantee, or award on behalf of limitation regarding the assessment Company in excess of $25,000;
(x) permit the Company to submit any document to the United States Patent Office or collection any foreign Patent Office without the prior written consent of any TaxPurchaser (such consent not to be unreasonably withheld or delayed), settle or compromise any Tax liability or refund or file any amended Tax Returnexcept to the extent necessary to avoid immediate loss of rights; or
(ixy) authorize any ofpermit the Company to authorize, or commit or agree to take take, or permit the Company to, or authorize, commit or agree to take, any of, of the foregoing actions other than as provided for in this Section 5.1actions.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (Renewable Energy Group, Inc.)
Conduct of the Business of the Company. The Company covenants (a) From and agrees as to itself and its Subsidiaries that, from after the date of this Agreement and continuing until the Effective Timeearlier of the Closing or the termination of this Agreement in accordance with its terms, the Company shall, and the Company shall cause its Subsidiaries to, except (i) as expressly contemplated or permitted by this AgreementAgreement or any Ancillary Document, (ii) as is necessary or advisable in connection with a Company Financing, as required by applicable Law, (iiias set forth on Section 6.1(b) of the Company Disclosure Schedules, or as consented to the extent Parent shall otherwise consent in writing by SLAM (which it being agreed that any request for a consent shall not be unreasonably withheld, delayed conditioned or conditioneddelayed), (i) operate the business of the Company in the ordinary course in all material respects and (ii) use commercially reasonable efforts to maintain and preserve intact in all material respects the business organization, assets, properties, key employees, key suppliers and material business relations of the Company.
(b) Without limiting the generality of the foregoing, from and after the date of this Agreement until the earlier of the Closing or (iv) the termination of this Agreement in accordance with its terms, the Company shall, and the Company shall cause its Subsidiaries to, except as expressly contemplated by this Agreement or any Ancillary Document, as is necessary or advisable in connection with a Company Financing, as required by applicable Law, as set forth on Section 5.1 6.1(b) of the Company Disclosure Letter, the Company Schedules or as consented to in writing (Aincluding by email) shall conduct its business in all material respects only in the ordinary course of business, consistent with past practice, and, by SLAM (which such consent (to the extent consistent therewith, it and its Subsidiaries shall use their respective reasonable best efforts related to (i) preserve their business organization intact, preserve the Company Contracts in force and maintain existing relations and goodwill with customers, suppliers, distributors, creditors, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant to which the Company or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; providedthe foregoing), however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed conditioned or conditioned):delayed), not do any of the following:
(i) (A) issueadopt any amendments, sellsupplements, purchase restatements or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant modifications to the terms of any Company Plan or any awards made under the Company Equity Plans), Company’s Governing Documents;
(B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (Cii) declare, set aside aside, make or pay any dividends a dividend on, or make any other distributions (whether in cash, stock distribution or property), payment in respect of, any Equity Securities of its capital stockthe Company or repurchase any outstanding Equity Securities of the Company, other than dividends and distributions or distributions, declared, set aside or paid by a direct or indirect wholly owned Subsidiary to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles of incorporation or bylaws (or equivalent organizational documents), (E) make any acquisition of, or investment in, assets (other than the purchase of supplies or inventory in the ordinary course of business, consistent with past practice) or stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) in any transaction or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, other than in the ordinary course of business, consistent with past practice, or (F) enter into any agreement with respect to the voting of the capital stock of the Company;
(ii) incur any Indebtedness or sell, lease, sublease, license or permit ’s Subsidiaries to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any the Company Owned Real Property or any Company Ground Leased Property)Subsidiary that is, directly or indirectly, wholly owned by the Company;
(iii) (A) enter into merge, consolidate, combine or amalgamate the Company with any new line Person or (B) purchase or otherwise acquire (whether by merging or consolidating with, purchasing any Equity Security in or a substantial portion of the assets of, or by any other manner) any corporation, partnership, association or other business entity or make organization or agree division thereof, so long as such acquisition does not result in any required changes to make the Audited Financial Statements or the Additional Required Company Financial Statements;
(iv) transfer, issue, sell, grant (other than as permitted by or provided for in Section 6.1(b)(viii) in the case of equity incentives) or otherwise directly or indirectly dispose of, or subject to a Lien, (A) any new Equity Securities of the Company or (B) any options to the Named Senior Executives (or any of them), warrants, rights of conversion or other rights, agreements, arrangements or commitments obligating the Company to issue, deliver or sell any Equity Securities of the Company, other than the issuance of Company Shares upon the exercise, conversion, exchange or similar disposition of any Equity Securities under the Company Equity Plan outstanding on the date of this Agreement (or issued after the date hereof in compliance with this Agreement) in accordance with the terms of the applicable Company Equity Plan and the underlying grant, award or similar agreement;
(v) incur, create or assume any Indebtedness, other than Indebtedness in the ordinary course (including revolving credit drawings, capital expenditure leases, deferred purchase price obligations and trade payables) greater than $10,000,000;
(vi) cancel or forgive any Indebtedness in excess of $250,000 1,000,000 owed to the Company;
(vii) make any loans, advances or thatcapital contributions to, in or guarantees for the aggregatebenefit of, are in excess of $500,000or any investments in, any Person, other than (A) intercompany loans or capital contributions between the Company and any of its wholly owned Subsidiaries and (B) the reimbursement of expenses of employees in the ordinary course of business;
(viii) except as required by applicable Law or under the terms of any Employee Benefit Plan of the Company that is set forth on the Section 3.15(a) of the Company Disclosure Schedules, (A) establish, adopt, materially modify, materially amend, terminate or materially increase the coverage of benefits available under any Employee Benefit Plan of the Company or any benefit or compensation plan, policy, program or Contract that would be an Employee Benefit Plan if in effect as of the date of this Agreement, (B) take any action to accelerate any payment, right to payment, or benefit, or the funding of any payment or benefit, right to payment or benefit, payable or to become payable to the Named Senior Executives (or any of them) except as part of the Compensation Committee Process, (C) announce, grant, or promise to grant, any compensation or benefits to any Named Senior Executive except as part of the Compensation Committee Process, (D) materially increase the compensation or benefits provided to any current or former director or any Named Senior Executives other than (x) annual salary increases in the ordinary course of business, which are consistent with past practice, practices and (By) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives as part of the Company or ParentCompensation Committee Process, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000, (C) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past or present, (D) except to the extent required by applicable Law or by any existing Company Plan or written agreement existing on the date of this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for agreements for newly hired employees in the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any newhire, engage, terminate (without cause), furlough, or materially increase benefits under temporarily lay off any Named Senior Executive;
(ix) negotiate, enter into, modify, terminate, or renew extend any CBA or recognize or certify any labor union, labor organization, works council, or employee representative as the bargaining representative for any employee;
(x) waive or release any noncompetition, nonsolicitation, no-hire, nondisclosure, nondisparagement, noninterference or other restrictive covenant obligation of any Named Senior Executive;
(xi) implement any employee layoff, plant closing, reduction in force, work schedule charges, or other such action that implicates WARN;
(A) make (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;
(vi) except as required by GAAP or under applicable Law and as concurred with by the Company’s independent auditors, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice);
, change, or revoke any material Tax election; (viiiB) make, revoke enter into any settlement or amend compromise (including any closing agreement or other written agreement) with any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise Authority relating to any Tax liability matter; (C) abandon or refund fail to conduct any audit, examination, or other Action in respect of a Tax or Tax Return; (D) file any amended Tax Return; or
(ixE) authorize consent to any of, extension or commit waiver of the statutory period of limitations applicable to any Tax or agree Tax Return; (F) enter into any Tax sharing agreement; (G) adopt or change a method of Tax accounting with respect to material Taxes; (H) change an accounting period with respect to Taxes or (I) take any action or knowingly fail to take any ofaction where such action or failure could reasonably be expected to prevent the Merger or the Domestication from qualifying for the Intended Tax Treatment;
(xiii) enter into any settlement, conciliation or similar Contract the foregoing actions performance of which would involve the payment by the Company in excess of $5,000,000, in the aggregate, or that imposes, or by its terms will impose at any point in the future, any material, non-monetary obligations on the Company (or Topco or any of its Affiliates after the Closing);
(xiv) authorize, recommend, propose or announce an intention to adopt, or otherwise effect, a plan of complete or partial liquidation, dissolution, restructuring, recapitalization, reorganization or similar transaction involving the Company;
(xv) make any change in the Company’s accounting methodology, practice or policy in any material respect, other than as provided changes required by GAAP or applicable Law;
(xvi) other than in the ordinary course of business, amend, modify or terminate any Material Contract in a manner that is materially adverse to the interests of the Company (excluding, for the avoidance of doubt, any expiration or automatic extension or renewal of any such Material Contract pursuant to its terms);
(xvii) enter into, amend, modify, or waive any material benefit to or material right of the Company with respect to any Company Related Party Transaction;
(xviii) enter into any Contract to take, or cause to be taken, any of the actions set forth in this Section 5.16.1. Notwithstanding anything in this Section 6.1 or this Agreement to the contrary, nothing set forth in this Agreement shall give SLAM, directly or indirectly, the right to control or direct the operations of the Company prior to the Closing.
Appears in 1 contract
Conduct of the Business of the Company. The Company covenants and agrees as to itself and its Subsidiaries that, from (a) During the date of this Agreement and continuing until the Effective TimeInterim Period, except (i) as expressly contemplated or permitted by this Agreement, (ii) as required by Law, (iii) to the extent Parent shall otherwise consent in writing (which consent shall not be unreasonably withheld, delayed or conditioned), or (iv) as set forth on Section 5.1 of the Company Disclosure LetterSchedule 4.1.2, the Company (A) shall will conduct its business in all material respects only Business in the ordinary course of businesscourse, consistent with past practice. Without limiting the generality of the foregoing, andunless otherwise contemplated by the provisions of this Agreement, the Company will, in each case, except to the extent consistent therewiththe failure to take such action would reasonably be expected to result in a Material Adverse Effect on the Company: carry on its Business in compliance with applicable Laws and perform its obligations under all Contracts, it Orders and Licenses; preserve its Subsidiaries shall use their respective Business and the goodwill of suppliers, customers and others having business relations with the Company; retain the services of the present executives, Employees, consultants and advisors of or to the Company; retain possession and control of the assets of the Company and preserve the confidentiality of any confidential or proprietary information of the Company or the Business; maintain in full force and effect all Company Material Contracts; maintain in full force and effect the Company's rights in the Company's Intellectual and Industrial Property; maintain in full force and effect all policies of insurance maintained by or for the benefit of the Company and give all notices and present claims under those policies in a timely fashion; pay, satisfy and discharge the Company's obligations and liabilities; and make all reasonable best efforts to (i) preserve their business organization intact, preserve not cause or permit to exist a breach of any representations and warranties of the Company Contracts contained in force this Agreement or in any Transaction Document and maintain existing relations to conduct the Business in such a manner that on the Closing Date those representations and goodwill with customerswarranties will be true and correct as if they were made at and as of such date.
(b) During the Interim Period, suppliersexcept as set forth on Schedule 4.1.2, distributorsthe Company will not, creditorsunless otherwise contemplated by the provisions of this Agreement or to the extent such action would not reasonably be expected to result in a Material Adverse Effect on the Company: amend or restate its articles of incorporation, lessors, officers, employees, business associates and consultants, (ii) maintain and keep material properties and assets in good repair and condition, (iii) maintain in effect all material governmental Permits pursuant stockholder agreements or bylaws currently adopted by the Company or to which the Company is a party; directly or any of its Subsidiaries currently operates and (iv) maintain and enforce all Company Intellectual Property Rights; providedindirectly, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision, and (B) shall not, and shall cause each Subsidiary not to, without Parent’s prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned):
(i) (A) issue, sell, purchase or redeem any shares of its or any Subsidiary’s capital stock or any Company Security (other than pursuant to the terms of any Company Plan or any awards made under the Company Equity Plans), (B) effect any recapitalization, reclassification, stock dividend, stock split or like change in its capitalization, (C) declare, set aside declare or pay any dividends on, or declare or make any other distributions (whether in cash, stock or property), return of capital in respect of, of any of its capital stockshares or redeem, purchase or otherwise acquire any of its outstanding shares or agree or resolve to do any of the foregoing; become a party to or bound by any new Contract with any Interested Person or amend or concur in the amendment of any such Contract or make or authorize any payment to or for the benefit of any Interested Person other than dividends and distributions as may be required pursuant to an existing Contract or as contemplated by a direct an existing policy or indirect wholly owned Subsidiary practice as to its parent, (D) amend or otherwise change its or any Subsidiary’s certificate or articles periodic review of incorporation or bylaws (or equivalent organizational documents), (E) Employee Benefit Plans; make any acquisition of, capital expenditure (except under existing commitments disclosed in Schedule 4.1.2) or investment in, assets authorize any new capital expenditures in excess of USD$50,000 in the aggregate; become a party to or bound by any Contract with respect to Employee Benefits Plans (other than an employment or personal services Contract which is terminable by the purchase of supplies Company without material liability on no more than 30 days' notice) or inventory amend or concur in the ordinary course amendment of businessor increase any payment or obligation under any Contract with respect to Employee Benefit Plans other than as may be required pursuant to an existing Contract or as contemplated by an existing policy or practice as to periodic review of Employee Benefit Plans; take any step to dissolve, consistent wind-up or otherwise affect its continuing corporate existence or amalgamate or merge with past practice) any Person; make any loan to or stock investment in any other Person; become a party to or bound by any Debt Instrument or amend or concur in the amendment of or prepay or vary the terms of any indebtedness or other obligation under any Debt Instrument; become a party to or bound by any Guarantee; except as may be required pursuant to an existing Contract or under the terms of an Employee Benefit Plan, declare or pay any dividend or other distribution (whether by way out of mergercapital or surplus or otherwise) on any of its outstanding securities or redeem, consolidationpurchase or otherwise acquire any of its outstanding securities; purchase, tender offer, share exchange sell or other activity) in lease any transaction property or any series of related transactions for an aggregate purchase price or prices, in excess of $250,000, assets other than in the ordinary course of business; cancel, consistent with past practice, waive or (F) enter into vary the terms of any agreement with respect material debt owing to the voting of the capital stock or any claim or right of the Company;
(ii) ; except as required under the terms of an Employee Benefit Plan, issue any shares or other securities or make any change in the number or class of or rights attached to any issued or unissued shares of its capital stock or grant, issue or make any option, warrant, subscription, convertible security or other right or commitment to purchase or acquire any shares of its capital stock or other securities; incur any Indebtedness obligation or sell, lease, sublease, license or permit to be subject to any Lien, other than a Permitted Lien, or otherwise dispose of any of its material properties or assets (including, without limitation, any Company Owned Real Property or any Company Ground Leased Property);
(iii) (A) enter into any new line of business or make or agree to make any new capital expenditure in excess of $250,000 or that, in the aggregate, are in excess of $500,000, other than in the ordinary course of business, consistent with past practice, (B) except in the ordinary course of business, consistent with past practice, modify, amend or terminate any material contract to which the Company or any of its Subsidiaries is a party or knowingly waive, release or assign any material rights or claims thereunder, or (C) dispose of, grant or permit to lapse any material Company Intellectual Property Rights or dispose of or disclose to any Person, other than to Representatives of the Company or Parent, any material trade secret;
(iv) discharge, settle, compromise, assign or satisfy any claim, whether or not pending before a Governmental Entity, (A) outside of the ordinary course of business, consistent with past practice, or (B) except where such discharge, settlement, compromise or satisfaction of any claim would result in payments (individually and not in the aggregate), net of insurance, by the Company or any of its Subsidiaries of less than $250,000;
(v) (A) except (1) to the extent required by applicable Law or by written agreements or Company Plans existing prior to the date of this Agreement that have been disclosed or made available to Parent or (2) for ordinary course salary increases, bonuses or other compensation granted to non-officer employees, grant or announce any stock option, equity or incentive awards or the increase in the salaries, bonuses or other compensation and benefits payable by the Company or any of its Subsidiaries to any of the employees, officers, directors or consultants of the Company or any of its Subsidiaries, (B) hire any new employees, liability except in the ordinary course of business consistent with past practice with respect to employees with an annual base salary not to exceed $100,000or make, (C) except to the extent required by applicable Law authorize or by accept any early payment of any existing Company Plan obligation or written agreement existing liability; create or permit the creation of any new Lien on the date of this Agreement that has been disclosed or made available to Parent or in the ordinary course of business (other than in connection with a Company-instituted reduction in force) consistent with past practice for non-officer employees, pay or agree to pay any pension, retirement allowance, termination or severance pay, bonus or other material employee benefit to any employee, officer, director or consultant of the Company or any of its Subsidiaries, whether past property or present, assets (Dexcept for any Permitted Lien) except to or amend or concur in the extent required by applicable Law or by amendment of any existing Company Plan Lien (except for Permitted Liens); terminate, transfer or written agreement existing on modify, or grant any rights under, the date Company's Intellectual and Industrial Property Rights; change or alter the physical content or character of any inventories of its Business; refrain from taking any reasonable action that would prevent any of the Company's representations and warranties under this Agreement that has been disclosed or made available to Parent, enter into or amend any contract of employment or any consulting, bonus, severance, retention, retirement other Transaction Document from becoming not true and correct as of the Closing Date; and agree or similar agreement, except for agreements for newly hired employees in become bound to do any of the ordinary course of business consistent with past practice with an annual base rate of salary not to exceed $100,000 or (E) enter into or adopt any new, or materially increase benefits under or renew (other than automatic renewals pursuant to an existing Company Plan or written agreement existing on the date of this Agreement), amend or terminate any existing, Company Plan or benefit arrangement or any collective bargaining agreement;foregoing.
(vic) except as required by GAAP or under applicable Law and as concurred with by During the Company’s independent auditorsInterim Period, make any material change in accounting methods, principles or practices;
(vii) enter into any contract that limits or otherwise restricts the Company or will promptly provide Parent with any of its Subsidiaries or any of their respective Affiliates or any successor thereto from engaging or competing in any line of business or product line or in any geographic area (excluding any marketing agreement relating to cross-promotional campaigns with third parties made in the ordinary course of business consistent with past practice);
(viii) make, revoke or amend any Tax election, adopt or change any method of accounting, extend or waive the application of any statute of limitation regarding the assessment or collection of any Tax, settle or compromise any Tax liability or refund or file any amended Tax Return; or
(ix) authorize any of, or commit or agree to take any of, the foregoing actions other than as provided for in this Section 5.1Subsequent Financial Statements.
Appears in 1 contract
Samples: Merger Agreement
