Conduct of the Company and its Subsidiaries. Except as (x) set forth in Section 6.1 of the Company Disclosure Letter or as otherwise expressly permitted or required by this Agreement or required or contemplated by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary or reasonably desirable to consummate the Plan Transactions, or (y) consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from the date hereof until the earlier of the Effective Time and termination of this Agreement in accordance with its terms, the Company shall, and shall cause its Subsidiaries to, conduct their respective businesses in the ordinary course and in compliance with Law, and use all commercially reasonable efforts to maintain and preserve intact its business organization, including the goodwill of any Governmental Authorities, lenders, suppliers, landlords and other Persons with which it has material business relationships, and to maintain the status of the Company as a REIT for U.S. federal income tax purposes; provided, however, that no action by the Company or its Subsidiaries of the type specifically addressed in Sections 6.1(a) through 6.1(r) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Except (i) as required by Law, (ii) as set forth in Section 6.1 of the Company Disclosure Letter, (iii) as may be expressly permitted or required by this Agreement or required by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary to consummate the Plan Transactions, or (iv) as may be consented to by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit its Subsidiaries to: (a) adopt any change in the Company Articles or the Company Bylaws; (b) merge or consolidate the Company or any of its Subsidiaries with any Person, other than the Mergers and other than any mergers or consolidations among the Company and its Subsidiaries or among the Company’s Subsidiaries; (c) redeem, repurchase or defease any Indebtedness of the Company or any Subsidiary of the Company in excess of $75 million (provided that no prepayment penalty would be payable in connection therewith), other than (i) at stated maturity and any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as in effect on the date hereof or as modified with the consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) repayments or prepayments of Indebtedness under the Company Credit Facilities (or any other revolving credit facility permitted to be incurred pursuant to the terms of this Agreement), (iii) in connection with any replacement, renewal, extension, refinancing, refunding or repayment permitted by Section 6.1(d)(iv) or (iv) any of the foregoing relating to intercompany Indebtedness; (d) incur, create, assume or otherwise become liable for any Indebtedness, except (i) for any Indebtedness incurred in the ordinary course of business, including mortgages on real property acquired by the Company or any of its Subsidiaries, (ii) for Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries, (iii) for Indebtedness under the Company Credit Facilities (and any other credit facility of the Company hereafter created with term or revolving Indebtedness on terms substantially the same as those governing the existing revolving credit facility as it may have been amended consistent with this clause (d)), (iv) for Indebtedness incurred to replace, renew, extend, refinance, refund or repay any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness, (v) for any guarantees by the Company of Indebtedness of the Company’s Subsidiaries or guarantees by the Company’s Subsidiaries of Indebtedness of the Company or any of its Subsidiaries, and (vi) with respect to any Indebtedness not in accordance with clauses (i) through (v), for any Indebtedness not to exceed $50 million in aggregate principal amount outstanding at the time incurred by the Company or any of its Subsidiaries; (e) make any acquisition (including by merger, consolidation or acquisition of stock or assets) of any other Person (or any division or material amount of assets thereof) or business; (f) make any capital expenditures, except for (i) capital expenditures up to $25 million in the aggregate (without counting any capital expenditures permitted pursuant to the following clauses (ii) and (iii)), (ii) capital expenditures made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise, or (iii) capital expenditures required to comply with any applicable Law; (g) make any loans, advances or capital contributions to, or investments in, any other Person in excess of $25 million (or, with respect to seller-financing of divestitures by the Company or any of its Subsidiaries, $15 million) (without counting any amounts pursuant to the following clauses (i) through (iv)), except for those (i) required or contemplated by existing Contracts, (ii) permitted by Section 6.1(f), (iii) solely between the Company and a Subsidiary of the Company or among Subsidiaries of the Company or (iv) made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise; (h) pledge or otherwise encumber shares of capital stock or other voting securities of the Company or any of its Subsidiaries, other than Permitted Liens, except in accordance with the incurrence of Indebtedness not prohibited by Section 6.1(d); (i) (A) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any of the Company Real Property, except for dispositions of the properties set forth in Section 6.1(i) of the Company Disclosure Letter (subject to the limits set forth therein); or (B) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any other properties or non-cash assets with a value in excess of $45 million in the aggregate, except in the case of this clause (B) (x) sales or dispositions made in connection with any transaction among the Company and its Subsidiaries or among the Company’s Subsidiaries or (y) sales or dispositions made in the ordinary course of business; (j) (i) split, combine or reclassify any Company Securities or amend the terms of any Company Securities, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities other than (A) a dividend or distribution by a Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) any dividend or distribution reasonably necessary for the Company or any of the Company Subreits to maintain its status as a REIT or avoid or reduce the imposition of any entity-level income or excise Tax under the Code or other applicable Law, or (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securities, other than in connection with (A) any redemption or repurchase of the Class A Preferred Stock, (B) the exercise of Company Options, (C) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (D) the acquisition by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (E) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, (F) the issuance of Company Securities to newly hired or promoted employees or newly appointed directors in the ordinary course of business consistent with past practice, or in connection with annual grants to employees and directors made in the ordinary course of business consistent with past practice, or as required to comply with any Company Benefit Plan as in effect on the date of this Agreement and (G) any transaction solely between the Company and a Subsidiary of the Company or between Subsidiaries of the Company; (k) except (i) as required pursuant to existing Contracts or any Company Benefit Plan in effect on the date hereof, or (ii) as effected in the ordinary course of business and consistent with past practice, (A) adopt, amend or terminate any material Company Benefit Plan, (B) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any material Company Benefit Plan or (C) increase the annualized value of compensation and benefits to be provided to Company Employees or any other services providers of the Company or any of its Subsidiaries (other than increases in annualized value of cash compensation in the ordinary course of business consistent with past practice in an amount that does not exceed 5.0% of such annualized value, in the aggregate, immediately prior to the date hereof); provided that the Company may make payments to Company Employees who are not “named executive officers” (as defined under Regulation S-K of the Securities Act) in an amount not to exceed $1 million in the aggregate with the individual allocation and terms of such payments subject to the prior consultation with Parent; (l) make any loans or advances to any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries; (m) (i) hire or engage any individual who would be a Company Employee or individual independent contractor whose annual base compensation exceeds $200,000 or (ii) terminate the employment of any Company Employee whose annual base compensation exceeds $200,000, other than for cause; (n) other than in the ordinary course of business consistent with past practice, settle or compromise any litigation or release, dismiss or otherwise dispose of any claim or arbitration not covered by insurance, other than settlements or compromises of litigation, claims or arbitration that do not, individually or in the aggregate, involve the payment of more than $15 million in excess of the amount reserved on the latest consolidated balance sheets of the Company in respect of litigation and claims, as set forth in the Company SEC Reports, and do not involve (A) any material injunctive or other non-monetary relief on the Company or any of its Subsidiaries or (B) any admission of wrongdoing by the Company or any of its Subsidiaries; (o) (i) cancel any material indebtedness for borrowed money owed to the Company other than as a result of a repayment of such indebtedness, or (ii) waive or release any claims or right of material value except in the exercise of the Company’s commercially reasonable business judgment; (p) enter into, materially modify or amend, or terminate any Real Property Lease (it being understood that, without limiting other modifications or amendments that may be material, any modification or amendment reducing the term or fees or other amounts that are payable to the Company or any of its Subsidiaries under any Real Property Lease will be considered a material modification or amendment of such Real Property Lease), except for the renewal, extension or replacement of any Real Property Lease expiring in accordance with its term (such renewal, extension or replacement to be on terms substantially similar to the existing Real Property Lease) or, other than in the ordinary course of business, enter into, materially modify or amend, or terminate any other Specified Contract other than as permitted by this Section 6.1; (q) make any material change in financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or Law; (r) adopt a plan of complete or partial liquidation or dissolution of the Company or any of its Subsidiaries; (s) make, change or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return, or settle or compromise any material Tax liability, audit, claim or assessment, change any material method of accounting for Tax purposes, enter into any Tax allocation, sharing or indemnity agreement (other than customary provisions in agreements or arrangements the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes or file any material Tax Return inconsistent with past practice other than as required by applicable Law; (t) take any action, or fail to take any action, which action or failure to act would reasonably be expected to cause (i) the Company or any Company Subreit to fail to qualify as a REIT or (ii) any other Affiliate of the Company to fail to preserve its status as set forth on Section 4.16(c) of the Company Disclosure Letter, in each case, which failure would have a Material Adverse Effect on the Company; or (u) authorize, agree or commit to do any of the foregoing. Notwithstanding any of the foregoing or in any other provisions of this Agreement, nothing contained in this Agreement shall prohibit the Company or any of its Subsidiaries from taking or causing to be taken any action, at any time or from time to time, that in the good faith judgment of the Company is reasonably necessary or appropriate for the Company or any of the Company Subreits to maintain its qualification as a REIT; provided that, prior to taking any such action the Company and its Subsidiaries shall inform Parent in writing of such action and shall consult with and cooperate with Parent in good faith to minimize the adverse effect of such action to the Company and Parent.
Appears in 2 contracts
Samples: Merger Agreement (Quality Care Properties, Inc.), Merger Agreement (Welltower Inc.)
Conduct of the Company and its Subsidiaries. Except as (x) set forth in Section 6.1 of the Company Disclosure Letter or as otherwise expressly permitted or required by this Agreement or required or contemplated by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary or reasonably desirable to consummate the Plan Transactions, or (y) consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from From the date hereof until the earlier of the Effective Time and termination of this Agreement in accordance with its termsthrough the Closing, the Company shall, and shall cause its Subsidiaries to, conduct its and their respective businesses in the ordinary course and in compliance with Law, and use all commercially reasonable efforts to maintain and preserve intact its business organization, including the goodwill of any Governmental Authorities, lenders, suppliers, landlords and other Persons with which it has material business relationships, and to maintain the status of the Company as a REIT for U.S. federal income tax purposes; provided, however, that no action by the Company or its Subsidiaries of the type specifically addressed in Sections 6.1(a) through 6.1(r) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Except (i) as required by Law, (ii) as set forth in Section 6.1 of the Company Disclosure Letter, (iii) as may be expressly permitted or required by this Agreement or required by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary to consummate the Plan Transactions, or (iv) as may be consented to by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit its Subsidiaries to:
(a) adopt any change in the Company Articles or the Company Bylaws;
(b) merge or consolidate the Company or any of its Subsidiaries with any Person, other than the Mergers and other than any mergers or consolidations among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(c) redeem, repurchase or defease any Indebtedness of the Company or any Subsidiary of the Company in excess of $75 million (provided that no prepayment penalty would be payable in connection therewith), other than (i) at stated maturity and any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as in effect on the date hereof or as modified with the consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) repayments or prepayments of Indebtedness under the Company Credit Facilities (or any other revolving credit facility permitted to be incurred pursuant to the terms of this Agreement), (iii) in connection with any replacement, renewal, extension, refinancing, refunding or repayment permitted by Section 6.1(d)(iv) or (iv) any of the foregoing relating to intercompany Indebtedness;
(d) incur, create, assume or otherwise become liable for any Indebtedness, except (i) for any Indebtedness incurred in the ordinary course of business, including mortgages on real property acquired by the Company or any of its Subsidiaries, (ii) for Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries, (iii) for Indebtedness under the Company Credit Facilities (and any other credit facility of the Company hereafter created with term or revolving Indebtedness on terms substantially the same as those governing the existing revolving credit facility as it may have been amended consistent with this clause (d)), (iv) for Indebtedness incurred to replace, renew, extend, refinance, refund or repay any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness, (v) for any guarantees by the Company of Indebtedness of the Company’s Subsidiaries or guarantees by the Company’s Subsidiaries of Indebtedness of the Company or any of its Subsidiaries, and (vi) with respect to any Indebtedness not in accordance with clauses (i) through (v), for any Indebtedness not to exceed $50 million in aggregate principal amount outstanding at the time incurred by the Company or any of its Subsidiaries;
(e) make any acquisition (including by merger, consolidation or acquisition of stock or assets) of any other Person (or any division or material amount of assets thereof) or business;
(f) make any capital expenditures, except for (i) capital expenditures up to $25 million in the aggregate (without counting any capital expenditures permitted pursuant to the following clauses (ii) and (iii)), (ii) capital expenditures made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise, or (iii) capital expenditures required to comply with any applicable Law;
(g) make any loans, advances or capital contributions to, or investments in, any other Person in excess of $25 million (or, with respect to seller-financing of divestitures by the Company or any of its Subsidiaries, $15 million) (without counting any amounts pursuant to the following clauses (i) through (iv)), except for those (i) required or contemplated by existing Contracts, (ii) permitted by Section 6.1(f), (iii) solely between the Company and a Subsidiary of the Company or among Subsidiaries of the Company or (iv) made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise;
(h) pledge or otherwise encumber shares of capital stock or other voting securities of the Company or any of its Subsidiaries, other than Permitted Liens, except in accordance with the incurrence of Indebtedness not prohibited by Section 6.1(d);
(i) (A) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any of the Company Real Property, except for dispositions of the properties set forth in Section 6.1(i) of the Company Disclosure Letter (subject to the limits set forth therein); or (B) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any other properties or non-cash assets with a value in excess of $45 million in the aggregate, except in the case of this clause (B) (x) sales or dispositions made in connection with any transaction among the Company and its Subsidiaries or among the Company’s Subsidiaries or (y) sales or dispositions made in the ordinary course of business;
(j) (i) split, combine or reclassify any Company Securities or amend the terms of any Company Securities, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities other than (A) a dividend or distribution by a Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) any dividend or distribution reasonably necessary for the Company or any of the Company Subreits to maintain its status as a REIT or avoid or reduce the imposition of any entity-level income or excise Tax under the Code or other applicable Law, or (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securities, other than in connection with (A) any redemption or repurchase of the Class A Preferred Stock, (B) the exercise of Company Options, (C) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (D) the acquisition by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (E) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, (F) the issuance of Company Securities to newly hired or promoted employees or newly appointed directors only in the ordinary course of business consistent with past practice, and, except as expressly provided in this Agreement or consented to in connection with annual grants writing in advance by the Investors, acting by a majority in interest (such consent not to employees be unreasonably withheld or delayed), the Company shall not:
(i) other than the Amended Articles, amend or modify its Organizational Documents, or amend or modify its corporate structure in a manner that would be materially adverse to the Investors;
(ii) other than as contemplated in the Senior Facilities, Yahoo! Preference Shares, Convertible Preference Shares, and directors made Equity Incentive Pool, issue, sell, transfer, grant, pledge or dispose of any securities of the Company or any Subsidiary of the Company, except for grants, pledges or dispositions of securities that are immaterial to the interest of a financial investor in the Company, and for agreements or arrangements of non-wholly-owned Subsidiaries that are immaterial to the interest of a financial investor in the Company;
(iii) other than the Yahoo! Initial Repurchase, purchase, redeem or otherwise acquire any securities of the Company other than pursuant to employee equity incentive plans or otherwise in the ordinary course of business consistent with past practicebusiness;
(iv) split, combine or reclassify the Ordinary Shares;
(v) declare, set aside or pay any dividends or distributions on, or as required to comply with make any Company Benefit Plan as other distributions in effect on the date of this Agreement and (G) respect of, any transaction solely between the Company and a Subsidiary securities of the Company or between Subsidiaries of the Company;
(k) except (i) as required pursuant to existing Contracts or any Company Benefit Plan in effect on the date hereof, or (ii) as effected in the ordinary course of business and consistent with past practice, (A) adopt, amend or terminate any material Company Benefit Plan, (B) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any material Company Benefit Plan or (C) increase the annualized value of compensation and benefits to be provided to Company Employees or any other services providers of the Company or any of its Subsidiaries (other than increases in annualized value of cash compensation in the ordinary course of business consistent with past practice in an amount that does not exceed 5.0% of such annualized value, in the aggregate, immediately prior to the date hereof); provided that the Company may make payments to Company Employees who are not “named executive officers” (as defined under Regulation S-K of the Securities Act) in an amount not to exceed $1 million in the aggregate with the individual allocation and terms of such payments subject to the prior consultation with Parent;
(l) make any loans or advances to any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries;
(m) (i) hire or engage any individual who would be a Company Employee or individual independent contractor whose annual base compensation exceeds $200,000 or (ii) terminate the employment of any Company Employee whose annual base compensation exceeds $200,000, other than for cause;
(n) other than in the ordinary course of business consistent with past practice, settle or compromise any litigation or release, dismiss or otherwise dispose of any claim or arbitration not covered by insurance, other than settlements or compromises of litigation, claims or arbitration that do not, individually or in the aggregate, involve the payment of more than $15 million in excess of the amount reserved on the latest consolidated balance sheets of the Company in respect of litigation and claims, as set forth in the Company SEC Reports, and do not involve (A) any material injunctive or other non-monetary relief on the Company or any of its Subsidiaries or (B) any admission of wrongdoing by the Company or any of its Subsidiaries;
(o) (i) cancel any material indebtedness for borrowed money owed to the Company other than as a result of a repayment of such indebtedness, or (ii) waive or release any claims or right of material value except in the exercise of the Company’s commercially reasonable business judgment;
(p) enter into, materially modify or amend, or terminate any Real Property Lease (it being understood that, without limiting other modifications or amendments that may be material, any modification or amendment reducing the term or fees or other amounts that are payable to the Company or any of its Subsidiaries under any Real Property Lease will be considered a material modification or amendment of such Real Property Lease), except for the renewal, extension or replacement of any Real Property Lease expiring in accordance with its term (such renewal, extension or replacement to be on terms substantially similar to the existing Real Property Lease) or, other than in the ordinary course of business, enter into, materially modify or amend, or terminate any other Specified Contract other than as permitted by this Section 6.1securities of any of its non-wholly owned Subsidiaries;
(qvi) make dispose of any assets, including equity securities of any Subsidiary, that are material change to the Company and its Subsidiaries (taken as a whole), in financial accounting methods, principles or practiceseach case other than sales to third parties in the ordinary course of business consistent with past practice and for fair value, except insofar as may have been required any such disposals that are approved by a change in GAAP or Lawthe non-executive directors of the Company pursuant to Section 2.10 of the Alipay Framework Agreement;
(rvii) adopt a plan of complete or partial liquidation liquidation, dissolution, merger, consolidation, restructuring, recapitalization or dissolution other reorganization of the Company or any material Subsidiary of its Subsidiariesthe Company;
(sviii) make, change or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return, or settle or compromise any material Tax liability, audit, claim or assessment, change any material method of accounting for Tax purposes, enter into any Tax allocation, sharing or indemnity agreement (other than customary provisions in agreements or arrangements except to the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes or file any material Tax Return inconsistent with past practice other than as extent required by applicable Law, take any action or permit any action to be taken that could reasonably be expected to result in any condition to the Closing set forth in Article X not being satisfied;
(tix) take any actionaction that, or fail to take any actionaction the failure of which to be taken, which action or failure to act would could reasonably be expected to cause (i) prevent or materially delay the Company or any Company Subreit to fail to qualify as a REIT or (ii) any other Affiliate consummation of the Company to fail to preserve its status as set forth on Section 4.16(c) of the Company Disclosure Letter, in each case, which failure would have a Material Adverse Effect on the CompanyTransactions; or
(ux) authorizetake, agree offer, propose or authorize any of, or commit or agree to do take any of of, the foregoing. Notwithstanding any of the foregoing or in any other provisions of this Agreement, nothing contained in this Agreement shall prohibit the Company or any of its Subsidiaries from taking or causing to be taken any action, at any time or from time to time, that in the good faith judgment of the Company is reasonably necessary or appropriate for the Company or any of the Company Subreits to maintain its qualification as a REIT; provided that, prior to taking any such action the Company and its Subsidiaries shall inform Parent in writing of such action and shall consult with and cooperate with Parent in good faith to minimize the adverse effect of such action to the Company and Parent.
Appears in 1 contract
Samples: Share Purchase and Investor Rights Agreement (Alibaba Group Holding LTD)
Conduct of the Company and its Subsidiaries. Except as (x) set forth in Section 6.1 During the period from the date of this Agreement and continuing until the Closing, the Company Disclosure Letter agrees as to itself and its Subsidiaries that, except (i) as expressly contemplated or as otherwise expressly permitted or required by this Agreement or required the Schedules, including, without limitation, the transactions described in Article 2 and Section 6.5 hereof or contemplated by in the Alternative Plan Sponsor Distribution and Repurchase Agreement, (ii) as required by applicable law or regulation and disclosed with reasonable promptness in writing to the Bankruptcy Case or otherwise as necessary or reasonably desirable to consummate the Plan TransactionsBuyer, or (yiii) consented to the extent that the Buyer shall otherwise consent in writing by Parent (writing, which consent shall not be unreasonably withheld, conditioned withheld or delayed), from the date hereof until the earlier of the Effective Time and termination of this Agreement in accordance with its terms, :
(a) the Company shall, and shall cause its Subsidiaries to, conduct shall carry on their respective businesses in the usual, regular and ordinary course and in compliance with Lawall material respects, in substantially the same manner as heretofore conducted, and shall use all commercially reasonable efforts to preserve intact their present lines of business, maintain their rights and franchises and preserve intact its their relationships with customers, suppliers and others having business organization, including dealings with them to the goodwill of end that their ongoing businesses shall not be impaired in any Governmental Authorities, lenders, suppliers, landlords and other Persons with which it has material business relationships, and to maintain respect at the status of the Company as a REIT for U.S. federal income tax purposesClosing; provided, however, that no action by the Company or its Subsidiaries of the type with respect to matters specifically addressed in Sections 6.1(a) through 6.1(r) by any other provision of this Section 6.1 shall be deemed a breach of this sentence Section 6.1(a), unless such action would constitute a breach of one or more of such other provision. Except provisions;
(ib) as required by Law, (ii) as set forth in Section 6.1 of the Company Disclosure Letter, (iii) as may be expressly permitted or required by this Agreement or required by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary to consummate the Plan Transactions, or (iv) as may be consented to by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit its Subsidiaries to:
(a) adopt any change in the Company Articles or the Company Bylaws;
(b) merge or consolidate the Company or any of its Subsidiaries with to, (i) enter into any Person, new line of business or (ii) other than the Mergers and other than capital expenditures referenced on Schedule 3.16, incur or commit to any mergers or consolidations among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(c) redeem, repurchase or defease any Indebtedness of the Company capital expenditures or any Subsidiary of the Company in excess of $75 million (provided that no prepayment penalty would be payable in connection therewith), other than (i) at stated maturity and any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as in effect on the date hereof obligations or as modified with the consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) repayments or prepayments of Indebtedness under the Company Credit Facilities (or any other revolving credit facility permitted to be incurred pursuant to the terms of this Agreement), (iii) liabilities in connection with any replacement, renewal, extension, refinancing, refunding or repayment permitted by Section 6.1(d)(iv) or (iv) any of the foregoing relating to intercompany Indebtedness;
(d) incur, create, assume or otherwise become liable for any Indebtedness, except (i) for any Indebtedness incurred in the ordinary course of business, including mortgages on real property acquired by the Company or any of its Subsidiaries, (ii) for Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries, (iii) for Indebtedness under the Company Credit Facilities (and any other credit facility of the Company hereafter created with term or revolving Indebtedness on terms substantially the same as those governing the existing revolving credit facility as it may have been amended consistent with this clause (d)), (iv) for Indebtedness incurred to replace, renew, extend, refinance, refund or repay any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness, (v) for any guarantees by the Company of Indebtedness of the Company’s Subsidiaries or guarantees by the Company’s Subsidiaries of Indebtedness of the Company or any of its Subsidiaries, and (vi) with respect to any Indebtedness not in accordance with clauses (i) through (v), for any Indebtedness not to exceed $50 million in aggregate principal amount outstanding at the time incurred by the Company or any of its Subsidiaries;
(e) make any acquisition (including by merger, consolidation or acquisition of stock or assets) of any other Person (or any division or material amount of assets thereof) or business;
(f) make any capital expenditures, except for (iA) capital expenditures up and obligations or liabilities in connection therewith incurred or committed to $25 million in the aggregate ordinary course of business consistent with past practice, and (without counting any B) other capital expenditures permitted pursuant and obligations or liabilities in connection therewith in an amount not to exceed $100,000 in the following clauses aggregate;
(iic) the Company shall not, and shall not permit any of its Subsidiaries to, and shall not propose to, (iii)i) declare or pay any dividends on or make other distributions in respect of any of its capital stock (except for dividends by direct or indirect wholly owned Subsidiaries), (ii) split, combine or reclassify any of its capital expenditures made stock or issue or authorize or propose the issuance of any other securities in response to respect of, in lieu of or in substitution for, shares of its capital stock (except for any emergency, whether caused such transaction by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act a direct or indirect wholly owned Subsidiary that remains a direct or indirect wholly owned Subsidiary after consummation of God or event of force majeure or otherwisesuch transaction), or (iii) repurchase, redeem or otherwise acquire any shares of its capital expenditures stock or any securities convertible into or exercisable for any shares of its capital stock (except for the Repurchased Shares);
(d) the Company shall not, and shall not permit any of its Subsidiaries to, issue, deliver or sell, or authorize or propose the issuance, delivery or sale of, any shares of its capital stock of any class, or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any such shares of its capital stock, or enter into any agreement with respect to any of the foregoing, other than issuances of capital stock by a direct or indirect wholly owned Subsidiary to such Subsidiary's parent or another direct or indirect wholly-owned Subsidiary;
(e) other than to the extent required to comply with its obligations hereunder or required by law, the Company and its Subsidiaries shall not amend its certificate of incorporation, by-laws or other governing documents;
(f) the Company shall not, and shall not permit any applicable Lawof its Subsidiaries to, acquire or agree to acquire by merging or consolidating with, or by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire or in-license any assets or rights (other than the acquisition or in-license of assets used in the operations of the business of the Company and its Subsidiaries in the ordinary course consistent with past practice); provided, however, in the event (A) the Company or any Subsidiary makes a bona fide request for the consent of the Buyer for an acquisition that would otherwise by precluded by this Section 6.1(f), (B) the Buyer does not give such consent and (C) this Agreement is terminated pursuant to Section 10.1, the Buyer shall not, directly or indirectly, acquire or offer to acquire the business that was the subject of such request for a period of one year following such termination;
(g) the Company shall not, and shall not permit any of its Subsidiaries to, sell, lease, out-license, encumber or otherwise dispose of, or agree to sell, lease, out-license, encumber or otherwise dispose of, any of its assets for consideration in excess of $100,000 in the aggregate;
(h) the Company shall not, and shall not permit any of its Subsidiaries to (i) make any loans, advances or capital contributions to, or investments in, any other Person in excess of $25 million Person, other than (or, with respect to seller-financing of divestitures A) by the Company or any of its Subsidiaries, $15 million) (without counting any amounts pursuant a direct or indirect wholly owned Subsidiary to the following clauses (i) through (iv)), except for those (i) required or contemplated by existing Contracts, (ii) permitted by Section 6.1(f), (iii) solely between the Company and a Subsidiary of in the Company or among Subsidiaries of the Company any other direct or indirect wholly owned Subsidiary, (ivB) made in response pursuant to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise;
(h) pledge or otherwise encumber shares of capital stock contract or other voting securities legal obligation of the Company or any of its Subsidiaries, other than Permitted Liens, except Subsidiary as in accordance with the incurrence of Indebtedness not prohibited by Section 6.1(d);
(i) (A) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any effect as of the Company Real Propertydate hereof or (C) in an aggregate amount outstanding from time to time of less than $50,000 or (ii) create, except for dispositions incur, assume or suffer to exist any indebtedness, issuances of debt securities, guarantees, loans or advances not in existence as of the properties set forth in Section 6.1(i) date of the Company Disclosure Letter (subject this Agreement except pursuant to the limits set forth therein); or credit facilities, indentures (B) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any other properties or non-cash assets with a value but not in excess of $45 million in amounts authorized for issuance thereunder as of the aggregate, except in the case date of this clause (BAgreement) (x) sales and other arrangements in existence on the date of this Agreement or dispositions made in connection with any transaction among the Company trade debt and its Subsidiaries or among the Company’s Subsidiaries or (y) sales or dispositions made in the ordinary course of business;
(j) (i) split, combine or reclassify any Company Securities or amend the terms of any Company Securities, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities other than (A) a dividend or distribution by a Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) any dividend or distribution reasonably necessary for the Company or any of the Company Subreits to maintain its status as a REIT or avoid or reduce the imposition of any entity-level income or excise Tax under the Code or other applicable Law, or (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securities, other than in connection with (A) any redemption or repurchase of the Class A Preferred Stock, (B) the exercise of Company Options, (C) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (D) the acquisition by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (E) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, (F) the issuance of Company Securities to newly hired or promoted employees or newly appointed directors commercial finance in the ordinary course of business consistent with past practice, in each case as such credit facilities, indentures and other arrangements and other existing indebtedness may be amended, extended, modified, refunded, renewed or in connection with annual grants to employees and directors made in the ordinary course of business consistent with past practice, or as required to comply with any Company Benefit Plan as in effect on refinanced after the date of this Agreement and (G) any transaction solely between which does not increase the Company and a Subsidiary aggregate principal amount or amounts of the Company or between Subsidiaries of facility, as the Companycase may be;
(k) except (i) other than with respect to the SHS Executives and other than as required pursuant to by an existing Contracts contract or any Company Benefit Plan agreement as in effect on the date hereof, or (ii) as effected in the ordinary course Company shall not, and shall not permit any of business and consistent with past practiceits Subsidiaries to, (A) adopt, amend increase the amount of compensation or terminate severance pay of any material Company Benefit Plandirector or executive officer, (B) take make any action to accelerate the vesting or paymentmaterial increase in, or fund or in commitment to increase materially, any other way secure the payment, of compensation or employee benefits under any material Company Benefit Plan or (C) increase the annualized value of compensation and benefits adopt or make any commitment to be provided adopt any material new Employee Benefit Plan or make any material contribution, other than regularly scheduled contributions, to Company Employees or any other services providers of Employee Benefit Plan;
(j) the Company or shall not (i) change its fiscal year, (ii) make any of its Subsidiaries material Tax election (other than increases in annualized value of cash compensation except in the ordinary course of business consistent with past practice or as otherwise required by applicable law or regulation) or (iii) except as required by changes in an amount that does not exceed 5.0% GAAP as concurred with by the Company's independent auditors or as required by applicable law or regulation, change its methods of such annualized value, accounting in the aggregate, immediately prior to effect as of the date hereof); provided that of the Latest Balance Sheet, as modified by changes set forth on Schedule 3.12;
(k) the Company may shall not, and shall not permit any of its Subsidiaries to, make payments any contributions to Company Employees who are not “named executive officers” (as defined under Regulation S-K any grantor trust or other funding arrangement for any nonqualified deferred compensation that is considered "unfunded" for purposes of the Securities Act) in an amount not to exceed $1 million in the aggregate with the individual allocation and terms of such payments subject to the prior consultation with ParentERISA;
(l) make any loans or advances to any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries;
(m) (i) hire or engage any individual who would be a Company Employee or individual independent contractor whose annual base compensation exceeds $200,000 or (ii) terminate the employment of any Company Employee whose annual base compensation exceeds $200,000, other than for cause;
(n) other than in connection with any action expressly permitted by any other subsection of this Section 6.1, the ordinary course of business consistent with past practice, settle or compromise any litigation or release, dismiss or otherwise dispose of any claim or arbitration not covered by insurance, other than settlements or compromises of litigation, claims or arbitration that do Company shall not, individually or in the aggregate, involve the payment of more than $15 million in excess of the amount reserved on the latest consolidated balance sheets of the Company in respect of litigation and claims, as set forth in the Company SEC Reports, and do shall not involve (A) any material injunctive or other non-monetary relief on the Company or permit any of its Subsidiaries or (B) any admission of wrongdoing by the Company or any of its Subsidiaries;
(o) to (i) cancel any material indebtedness for borrowed money owed to the Company other than as a result of a repayment of such indebtednessenter into or become bound by, or (ii) waive or release permit any claims or right of material value except in the exercise of the Company’s commercially reasonable business judgment;
(p) enter into, materially modify assets owned or amend, or terminate any Real Property Lease (used by it being understood that, without limiting other modifications or amendments that may be materialto become bound by, any modification or amendment reducing contract of the term or fees or other amounts that are payable to the Company or any of its Subsidiaries under any Real Property Lease will be considered a material modification or amendment of such Real Property Lease), except for the renewal, extension or replacement of any Real Property Lease expiring in accordance with its term (such renewal, extension or replacement type required to be on terms substantially similar disclosed pursuant to the existing Real Property Lease) or, Section 3.19 of this Agreement (other than in the ordinary course of business, enter into, materially modify or amend, or terminate any other Specified Contract other than as permitted by this Section 6.1;
(q) make any material change in financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or Law;
(r) adopt a plan of complete or partial liquidation or dissolution of the Company or any of its Subsidiaries;
(s) make, change or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return, or settle or compromise any material Tax liability, audit, claim or assessment, change any material method of accounting for Tax purposes, enter into any Tax allocation, sharing or indemnity agreement (other than customary provisions in agreements or arrangements the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes or file any material Tax Return inconsistent with past practice other than as required by applicable Law;
(t) take any action, or fail to take any action, which action or failure to act would reasonably be expected to cause (i) the Company or any Company Subreit to fail to qualify as a REIT or (ii) amend or prematurely terminate (other than in the ordinary course of business), or waive any material right or remedy under, any such contract;
(m) the Company shall not, and shall not cause or permit any Subsidiary to, commence or settle any action, suit, investigation or other proceeding (except for (i) protest actions on contract awards, (ii) collection or enforcement actions under existing contracts and (iii) any other Affiliate of the Company action, suit, investigation or other proceeding not required to fail to preserve its status as be set forth on Section 4.16(cSchedule 3.11); and
(n) of the Company Disclosure Lettershall not, in each case, which failure would have a Material Adverse Effect on the Company; or
(u) authorizeand shall not cause or permit any Subsidiary to, agree or commit to do take any of the foregoing. Notwithstanding any of the foregoing or actions described in any other provisions subsections (a) through (m) of this Agreement, nothing contained in this Agreement shall prohibit the Company or any of its Subsidiaries from taking or causing to be taken any action, at any time or from time to time, that in the good faith judgment of the Company is reasonably necessary or appropriate for the Company or any of the Company Subreits to maintain its qualification as a REIT; provided that, prior to taking any such action the Company and its Subsidiaries shall inform Parent in writing of such action and shall consult with and cooperate with Parent in good faith to minimize the adverse effect of such action to the Company and ParentSection 6.1.
Appears in 1 contract
Conduct of the Company and its Subsidiaries. Except (a) From the date of this Agreement until the Closing, except as (xA) Purchaser may otherwise consent, (B) expressly permitted by this Agreement, (C) set forth in Section 6.1 5.1(a) of the Seller Disclosure Schedule, (D) may be required to prevent a termination of Seller within the meaning of Section 708(b) of the Code, or (E) required by applicable Laws, Governmental Orders or the AC Agreements, Seller will cause each of the Company Disclosure Letter or as otherwise expressly permitted or required by this Agreement or required or contemplated by and the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary or reasonably desirable to consummate the Plan Transactions, or (y) consented to in writing by Parent (which consent shall Company’s Subsidiaries not be unreasonably withheld, conditioned or delayed), from the date hereof until the earlier of the Effective Time and termination of this Agreement in accordance with its terms, the Company shall, and shall cause its Subsidiaries to, conduct their respective businesses in the ordinary course and in compliance with Law, and use all commercially reasonable efforts to maintain and preserve intact its business organization, including the goodwill of any Governmental Authorities, lenders, suppliers, landlords and other Persons with which it has material business relationships, and to maintain the status of the Company as a REIT for U.S. federal income tax purposes; provided, however, that no action by the Company or its Subsidiaries of the type specifically addressed in Sections 6.1(a) through 6.1(r) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Except (i) as required by Law, (ii) as set forth in Section 6.1 of the Company Disclosure Letter, (iii) as may be expressly permitted or required by this Agreement or required by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary to consummate the Plan Transactions, or (iv) as may be consented to by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit its Subsidiaries to:
(ai) adopt or propose any change in the Company Articles or the Company Bylawsits Organizational Documents;
(bii) merge or consolidate itself with any other Person, or restructure, reorganize or completely or partially liquidate itself;
(iii) issue, sell, pledge, dispose of, grant, transfer or encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer or encumbrance of, (x) any equity interest in the Company or any of its Subsidiaries with any Person, other than the Mergers and other than any mergers or consolidations among the Company and its Subsidiaries, (y) any securities convertible into or exchangeable or exercisable for any equity interest in the Company or the Company Subsidiaries, or (z) any options, calls, warrants or other rights to acquire any equity interest in the Company or the Company Subsidiaries or among the Company’s Subsidiariessuch convertible, exchangeable or exercisable securities;
(c) redeem, repurchase or defease any Indebtedness of the Company or any Subsidiary of the Company in excess of $75 million (provided that no prepayment penalty would be payable in connection therewith), other than (i) at stated maturity and any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as in effect on the date hereof or as modified with the consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) repayments or prepayments of Indebtedness under the Company Credit Facilities (or any other revolving credit facility permitted to be incurred pursuant to the terms of this Agreement), (iii) in connection with any replacement, renewal, extension, refinancing, refunding or repayment permitted by Section 6.1(d)(iv) or (iv) any of the foregoing relating to intercompany Indebtedness;
(d) incur, create, assume or otherwise become liable for any Indebtedness, except (i) for any Indebtedness incurred in the ordinary course of business, including mortgages on real property acquired by the Company or any of its Subsidiaries, (ii) for Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries, (iii) for Indebtedness under the Company Credit Facilities (and any other credit facility of the Company hereafter created with term or revolving Indebtedness on terms substantially the same as those governing the existing revolving credit facility as it may have been amended consistent with this clause (d)), (iv) for Indebtedness incurred to replace, renew, extend, refinance, refund or repay any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness, (v) for any guarantees by the Company of Indebtedness of the Company’s Subsidiaries or guarantees by the Company’s Subsidiaries of Indebtedness of the Company or any of its Subsidiaries, and (vi) with respect to any Indebtedness not in accordance with clauses (i) through (v), for any Indebtedness not to exceed $50 million in aggregate principal amount outstanding at the time incurred by the Company or any of its Subsidiaries;
(e) make any acquisition (including by merger, consolidation or acquisition of stock or assets) of any other Person (or any division or material amount of assets thereof) or business;
(f) make any capital expenditures, except for (i) capital expenditures up to $25 million in the aggregate (without counting any capital expenditures permitted pursuant to the following clauses (ii) and (iii)), (ii) capital expenditures made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise, or (iii) capital expenditures required to comply with any applicable Law;
(g) make any loans, advances or capital contributions to, or investments in, any other Person in excess of $25 million (or, with respect to seller-financing of divestitures by the Company or any of its Subsidiaries, $15 million) (without counting any amounts pursuant to the following clauses (i) through (iv)), except for those (i) required or contemplated by existing Contracts, (ii) permitted by Section 6.1(f), (iii) solely between the Company and a Subsidiary of the Company or among Subsidiaries of the Company or (iv) made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise;
(h) pledge or otherwise encumber shares of capital stock or other voting securities of the Company or any of its Subsidiaries, other than Permitted Liens, except in accordance with the incurrence of Indebtedness not prohibited by Section 6.1(d);
(i) (A) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any of the Company Real Property, except for dispositions of the properties set forth in Section 6.1(i) of the Company Disclosure Letter (subject to the limits set forth therein); or (B) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any other properties or non-cash assets with a value in excess of $45 million in the aggregate, except in the case of this clause (B) (x) sales or dispositions made in connection with any transaction among the Company and its Subsidiaries or among the Company’s Subsidiaries or (y) sales or dispositions made in the ordinary course of business;
(j) (i) split, combine or reclassify any Company Securities or amend the terms of any Company Securities, (ii) declare, set aside aside, make or pay any dividend or other distribution (whether distribution, payable in cash, stock or stock, property or otherwise, with respect to its capital stock (except for dividends or other distributions paid by any combination thereof) in respect of Company Securities other than (A) a dividend direct or distribution by a indirect wholly owned Subsidiary of the Company to the Company or another to any other direct or indirect wholly owned Subsidiary of the Company);
(v) (x) make or rescind any election relating to Non-Income Taxes of the Company or any Company Subsidiary, (By) settle or compromise any dividend material Non-Income Tax liability or distribution reasonably necessary for amend any Tax Returns in respect of Non-Income Taxes of the Company or any Company Subsidiaries or (z) adopt or change any material method of Tax accounting in respect of Non-Income Taxes of the Company or any Company Subsidiary;
(vi) make or commit to make any capital expenditures relating to the Project or any Capital Project other than those (a) expenditures that have been committed or agreed to by Seller and/or its Affiliates on or before December 31, 2010 but not yet funded or (b) requested or required by any Governmental Authority;
(vii) change the Company’s or any Company Subsidiary’s methods of accounting as in effect as of the date hereof, except as required by GAAP;
(viii) revalue any of the significant assets of the Company or any Company Subsidiaries;
(ix) invest funds of the Company or any Company Subsidiaries in any other Person, other than (a) investments required to be made pursuant to any Project Contract to which the Company or any Company Subsidiaries is a party or (b) in connection with a capital expenditure otherwise permitted pursuant to this Section 5.1;
(x) fail to use all commercially reasonable efforts to maintain in full force and effect insurance coverage substantially similar to insurance coverage maintained on the date hereof;
(xi) enter into or agree to enter into any material Contract to which the Company or any Company Subsidiaries is a party or amend, modify, renew, extend or terminate any Contract to which the Company or any of the Company Subreits to maintain its status as Subsidiaries is a REIT or avoid or reduce the imposition of any entity-level income or excise Tax under the Code or other applicable Lawparty, or (iii) issue cancel, modify or offer to issue waive any Company Securities, material debts or redeem, repurchase claims or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, waive any Company Securities, other than in connection with (A) any redemption or repurchase of the Class A Preferred Stock, (B) the exercise of Company Options, (C) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (D) the acquisition material rights held by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (E) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, (F) the issuance of Company Securities to newly hired or promoted employees or newly appointed directors in the ordinary course of business consistent with past practice, or in connection with annual grants to employees and directors made in the ordinary course of business consistent with past practice, or as required to comply with any Company Benefit Plan as in effect on the date of this Agreement and (G) any transaction solely between the Company and a Subsidiary of the Company or between Subsidiaries of the Companyit thereunder;
(kxii) except (i) as required pursuant to existing Contracts or any Company Benefit Plan in effect on the date hereof, or (ii) as effected in the ordinary course of business and consistent with past practice, (A) adopt, amend or terminate any material Company Benefit Plan, (B) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any material Company Benefit Plan or (C) increase the annualized value of compensation and benefits to be provided to Company Employees or any other services providers of the Company or any of its Subsidiaries (other than increases in annualized value of cash compensation in the ordinary course of business consistent with past practice in an amount that does not exceed 5.0% of such annualized value, in the aggregate, immediately prior to the date hereof); provided that the Company may make payments to Company Employees who are not “named executive officers” (as defined under Regulation S-K of the Securities Act) in an amount not to exceed $1 million in the aggregate with the individual allocation and terms of such payments subject to the prior consultation with Parent;
(l) make any loans Section 5.9, propose to, authorize or advances to any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries;
(m) (i) hire or engage any individual who would be a Company Employee or individual independent contractor whose annual base compensation exceeds $200,000 or (ii) terminate the employment of any Company Employee whose annual base compensation exceeds $200,000, other than for cause;
(n) other than in the ordinary course of business consistent with past practice, settle or compromise any litigation or release, dismiss or otherwise dispose of any claim or arbitration not covered by insurance, other than settlements or compromises of litigation, claims or arbitration that do not, individually or in the aggregate, involve the payment of more than $15 million in excess of the amount reserved on the latest consolidated balance sheets of the Company in respect of litigation and claims, as set forth in the Company SEC Reports, and do not involve (A) any material injunctive or other non-monetary relief on the Company or any of its Subsidiaries or (B) any admission of wrongdoing by the Company or any of its Subsidiaries;
(o) (i) cancel any material indebtedness for borrowed money owed to the Company other than as a result of a repayment of such indebtedness, or (ii) waive or release any claims or right of material value except in the exercise of the Company’s commercially reasonable business judgment;
(p) enter into, materially modify or amend, or terminate any Real Property Lease (it being understood that, without limiting other modifications or amendments that may be material, any modification or amendment reducing the term or fees or other amounts that are payable to the Company or any of its Subsidiaries under any Real Property Lease will be considered a material modification or amendment of such Real Property Lease), except for the renewal, extension or replacement of any Real Property Lease expiring in accordance with its term (such renewal, extension or replacement to be on terms substantially similar to the existing Real Property Lease) or, other than in the ordinary course of business, enter into, materially modify or amend, or terminate any other Specified Contract other than as permitted by this Section 6.1;
(q) make any material change in financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or Law;
(r) adopt a plan of complete or partial liquidation or dissolution of the Company or any of its Subsidiaries;
(s) make, change or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return, or settle or compromise any material Tax liability, audit, claim or assessment, change any material method of accounting for Tax purposes, enter into any Tax allocation, sharing agreement or indemnity agreement (other than customary provisions in agreements or arrangements otherwise make any commitment to do any of the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes or file any material Tax Return inconsistent with past practice other than as required by applicable Law;foregoing; or
(txiii) take any action, or fail to take make any actionelection, which action or failure to act would reasonably be expected to could cause (i) the Company or any Company Subreit to fail to qualify as a REIT or (ii) any other Affiliate of the Company Subsidiaries to fail to preserve its status as set forth on Section 4.16(c) of the Company Disclosure Letter, in each case, which failure would have a Material Adverse Effect on the Company; or
(u) authorize, agree or commit to do any of the foregoing. Notwithstanding any of the foregoing or in any other provisions of this Agreement, nothing contained in this Agreement shall prohibit the Company or any of its Subsidiaries from taking or causing cease to be taken any action, at any time disregarded entities for U.S. federal income Tax purposes or from time to time, that in the good faith judgment of the Company is reasonably necessary or appropriate for the Company or any of the Company Subreits to maintain its qualification as a REIT; provided that, prior to taking any such action the Company and its Subsidiaries shall inform Parent in writing of such action and shall consult with and cooperate with Parent in good faith to minimize the adverse effect of such action to the Company and ParentNew Jersey income Tax purposes.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Revel Entertainment Group, LLC)
Conduct of the Company and its Subsidiaries. Except as (x) set forth in Section 6.1 of the The Company Disclosure Letter or as otherwise expressly permitted or required by this Agreement or required or contemplated by the Alternative Plan Sponsor Agreementcovenants and agrees that, the Bankruptcy Case or otherwise as necessary or reasonably desirable to consummate the Plan Transactions, or (y) consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from between the date hereof until the earlier of the Effective Time and termination of this Agreement in accordance with its termsand the Settlement Date or the date, the Company shallif any, and shall cause its Subsidiaries toon which this Agreement is terminated pursuant to Section 10.01, conduct their respective businesses in the ordinary course and in compliance with Law, and use all commercially reasonable efforts to maintain and preserve intact its business organization, including the goodwill of any Governmental Authorities, lenders, suppliers, landlords and other Persons with which it has material business relationships, and to maintain the status of the Company as a REIT for U.S. federal income tax purposes; provided, however, that no action by the Company or its Subsidiaries of the type specifically addressed in Sections 6.1(a) through 6.1(r) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Except except (i) as may be required by Law, (ii) as set forth may be agreed to in Section 6.1 writing by ABI, (iii) as consented to or directed by ABI’s designees on the board of directors of the Company Disclosure Letteror any committee thereof with competent authority, (iiiiv) as may be expressly permitted or required contemplated by this Agreement or required by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary to consummate the Plan Transactions, or (ivv) as may be consented to by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), set forth in Section 5.01 of the Company shall not, and shall not permit its Subsidiaries toDisclosure Schedule:
(a) adopt any change in the Company Articles or the Company Bylaws;
(b) merge or consolidate the Company or any business of its Subsidiaries with any Person, other than the Mergers and other than any mergers or consolidations among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(c) redeem, repurchase or defease any Indebtedness of the Company or any Subsidiary of the Company in excess of $75 million (provided that no prepayment penalty would shall be payable in connection therewith), other than (i) at stated maturity and any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as in effect on the date hereof or as modified with the consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) repayments or prepayments of Indebtedness under the Company Credit Facilities (or any other revolving credit facility permitted to be incurred pursuant to the terms of this Agreement), (iii) in connection with any replacement, renewal, extension, refinancing, refunding or repayment permitted by Section 6.1(d)(iv) or (iv) any of the foregoing relating to intercompany Indebtedness;
(d) incur, create, assume or otherwise become liable for any Indebtedness, except (i) for any Indebtedness incurred in the ordinary course of business, including mortgages on real property acquired by the Company or any of its Subsidiaries, (ii) for Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries, (iii) for Indebtedness under the Company Credit Facilities (and any other credit facility of the Company hereafter created with term or revolving Indebtedness on terms substantially the same as those governing the existing revolving credit facility as it may have been amended consistent with this clause (d)), (iv) for Indebtedness incurred to replace, renew, extend, refinance, refund or repay any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness, (v) for any guarantees by the Company of Indebtedness of the Company’s Subsidiaries or guarantees by the Company’s Subsidiaries of Indebtedness of the Company or any of its Subsidiaries, and (vi) with respect to any Indebtedness not in accordance with clauses (i) through (v), for any Indebtedness not to exceed $50 million in aggregate principal amount outstanding at the time incurred by the Company or any of its Subsidiaries;
(e) make any acquisition (including by merger, consolidation or acquisition of stock or assets) of any other Person (or any division or material amount of assets thereof) or business;
(f) make any capital expenditures, except for (i) capital expenditures up to $25 million in the aggregate (without counting any capital expenditures permitted pursuant to the following clauses (ii) and (iii)), (ii) capital expenditures made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise, or (iii) capital expenditures required to comply with any applicable Law;
(g) make any loans, advances or capital contributions to, or investments in, any other Person in excess of $25 million (or, with respect to seller-financing of divestitures by the Company or any of its Subsidiaries, $15 million) (without counting any amounts pursuant to the following clauses (i) through (iv)), except for those (i) required or contemplated by existing Contracts, (ii) permitted by Section 6.1(f), (iii) solely between the Company and a Subsidiary of the Company or among Subsidiaries of the Company or (iv) made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise;
(h) pledge or otherwise encumber shares of capital stock or other voting securities of the Company or any of its Subsidiaries, other than Permitted Liens, except in accordance with the incurrence of Indebtedness not prohibited by Section 6.1(d);
(i) (A) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any of the Company Real Property, except for dispositions of the properties set forth in Section 6.1(i) of the Company Disclosure Letter (subject to the limits set forth therein); or (B) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any other properties or non-cash assets with a value in excess of $45 million in the aggregate, except in the case of this clause (B) (x) sales or dispositions made in connection with any transaction among the Company and its Subsidiaries or among the Company’s Subsidiaries or (y) sales or dispositions made in the ordinary course of business;
(j) (i) split, combine or reclassify any Company Securities or amend the terms of any Company Securities, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities other than (A) a dividend or distribution by a Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) any dividend or distribution reasonably necessary for the Company or any of the Company Subreits to maintain its status as a REIT or avoid or reduce the imposition of any entity-level income or excise Tax under the Code or other applicable Law, or (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securities, other than in connection with (A) any redemption or repurchase of the Class A Preferred Stock, (B) the exercise of Company Options, (C) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (D) the acquisition by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (E) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, (F) the issuance of Company Securities to newly hired or promoted employees or newly appointed directors in the ordinary course of business consistent with past practice, or in connection with annual grants to employees and directors made in the ordinary course of business consistent with past practice, or as required to comply with any Company Benefit Plan as in effect on the date of this Agreement and (G) any transaction solely between the Company and a Subsidiary of the Company or between Subsidiaries of the Company;
(k) except (i) as required pursuant to existing Contracts or any Company Benefit Plan in effect on the date hereof, or (ii) as effected in the ordinary course of business and consistent with past practice, (A) adopt, amend or terminate any material Company Benefit Plan, (B) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any material Company Benefit Plan or (C) increase the annualized value of compensation and benefits to be provided to Company Employees or any other services providers of the Company or any of its Subsidiaries (other than increases in annualized value of cash compensation conducted only in the ordinary course of business consistent with past practice in an amount all material respects and in compliance with all applicable Laws in all material respects and the Company shall comply with the Covenant Agreements and the Charter Documents of the Company, including with respect to the rights of ABI to consent to certain actions of the Company and its Subsidiaries under the Charter Documents of the Company;
(b) the Company shall not (and, as applicable, shall cause its Subsidiaries not to) issue, sell, pledge, dispose, encumber or grant any shares of its or its Subsidiaries’ capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock, other than (i) in connection with the Merger, the DIFA Merger and the Share Restructuring, (ii) pursuant to the ABI Subscription and (iii) in connection with any capital increase or other similar action with respect to any direct or indirect wholly owned Subsidiary of (x) the Company or (y) Diblo, provided that does such Subsidiary remains directly or indirectly wholly owned by the Company or Diblo;
(c) the Company shall not exceed 5.0% (and, as applicable, shall cause its Subsidiaries not to), except (i) as required pursuant to existing written agreements (including any collective bargaining agreements existing on the date hereof or entered into after the date hereof not in contravention of such annualized value, Section 5.01(f)) or benefit plans (including Company Benefit Plans) in the aggregate, immediately prior to effect as of the date hereof); provided that the Company may make payments to Company Employees who are not “named executive officers” , or (as defined under Regulation S-K of the Securities Actii) in connection with any new hire (including the hiring of an amount not officer to exceed $1 million replace a retiring, resigning, reassigned or terminated officer in the aggregate ordinary course of business ) or promotion based on job performance or workplace requirements (in the ordinary course of business): (A) except in the ordinary course consistent with past practice, increase the individual allocation and terms of such payments subject compensation or other benefits payable or to the prior consultation with Parent;
(l) make any loans become payable to directors, officers or advances to any current or former director, officer, employee or independent contractor employees of the Company or any of its Subsidiaries;
, (mB) grant any severance or termination pay to, or enter into any severance agreement with, any director, officer or employee of the Company or any of its Subsidiaries, (iC) hire enter into any employment agreement with any director, officer or engage employee of the Company or any individual who would be a Company Employee or individual independent contractor whose annual base compensation exceeds $200,000 or (ii) terminate the employment of any Company Employee whose annual base compensation exceeds $200,000its Subsidiaries, other than except for cause;
(n) other than agreements in the ordinary course of business consistent with past practice, settle or compromise any litigation or release, dismiss or otherwise dispose of any claim or arbitration not covered by insurance, other than settlements or compromises of litigation, claims or arbitration that do not, individually or in the aggregate, involve the payment of more than $15 million in excess of the amount reserved on the latest consolidated balance sheets of the Company in respect of litigation and claims, as set forth in the Company SEC Reports, and do not involve (A) any material injunctive or other practice with non-monetary relief on the Company or any of its Subsidiaries or (B) any admission of wrongdoing by the Company or any of its Subsidiaries;
(o) (i) cancel any material indebtedness for borrowed money owed to the Company other than as a result of a repayment of such indebtednessofficers, or (ii) waive or release any claims or right of material value except in the exercise of the Company’s commercially reasonable business judgment;
(pD) enter into, materially terminate or modify or amend, or terminate any Real Property Lease Company Benefit Plan (it being understood that, without limiting other modifications or amendments that may be material, any modification or amendment reducing the term or fees or other amounts that are payable to the Company or any arrangement that would be a Company Benefit Plan if in effect on the date of its Subsidiaries under any Real Property Lease will be considered a material modification or amendment of such Real Property Leasethis Agreement), except for the renewal, extension or replacement of any Real Property Lease expiring in accordance with its term (such renewal, extension or replacement to be on terms substantially similar to the existing Real Property Lease) or, other than in the ordinary course of business, enter into, materially modify or amend, or terminate any other Specified Contract other than as permitted by this Section 6.1;
(q) make any material change in financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or Law;
(r) adopt a plan of complete or partial liquidation or dissolution of the Company or any of its Subsidiaries;
(s) make, change or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return, or settle or compromise any material Tax liability, audit, claim or assessment, change any material method of accounting for Tax purposes, enter into any Tax allocation, sharing or indemnity agreement (other than customary provisions in agreements or arrangements the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes or file any material Tax Return inconsistent consistent with past practice other than as required by applicable Law;
(t1) take any action, or fail with respect to take any action, which action or failure Company Benefit Plans that generally apply to act would reasonably be expected to cause (i) the Company or any Company Subreit to fail to qualify as a REIT or (ii) any other Affiliate substantially all employees of the Company to fail to preserve its status as set forth on Section 4.16(c) of the Company Disclosure Letter, in each case, which failure would have a Material Adverse Effect on the Company; or
(u) authorize, agree or commit to do any of the foregoing. Notwithstanding any of the foregoing or in any other provisions of this Agreement, nothing contained in this Agreement shall prohibit the Company or any of its Subsidiaries from taking or causing to be taken any action, at any time or from time to time, that in the good faith judgment of the Company is reasonably necessary or appropriate for the Company or any of the Company Subreits to maintain its qualification as a REIT; provided that, prior to taking any such action the Company and its Subsidiaries shall inform Parent in writing or (2) with respect to Company Benefit Plans that generally only apply to similarly situated employees of such action and shall consult with and cooperate with Parent in good faith to minimize the adverse effect of such action to the Company and Parent.its Subsidiaries, where such entry into, termination or modification does not materially increase the value of the benefits provided pursuant thereto ( provided , that in no event shall the Company or its Subsidiaries (x) adopt any new severance plans without the prior written agreement of ABI or,
Appears in 1 contract
Samples: Transaction Agreement
Conduct of the Company and its Subsidiaries. Except as (x) set forth in Section 6.1 Schedule 4.1 of the Company Disclosure Letter or as otherwise expressly permitted or required by this Agreement or required or contemplated by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary or reasonably desirable to consummate the Plan Transactions, or (y) consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed)Letter, from the date hereof until to the earlier of the Effective Time and termination of this Agreement in accordance with its termsClosing, the Company shall, and shall cause its Subsidiaries to, conduct their respective businesses in the ordinary course and in compliance with Law, and use all commercially reasonable efforts to maintain and preserve intact its business organization, including the goodwill of any Governmental Authorities, lenders, suppliers, landlords and other Persons with which it has material business relationships, and to maintain the status of the Company as a REIT for U.S. federal income tax purposes; provided, however, that no action by the Company or its Subsidiaries of the type specifically addressed in Sections 6.1(a) through 6.1(r) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Except except (i) as required by Lawfor entering into and performing this Agreement, (ii) as set forth in Section 6.1 for performance of the Company Disclosure Letterits obligations hereunder, (iii) as may be expressly permitted or required contemplated by this Agreement or required by the Alternative Plan Sponsor Company’s budgets heretofore made available to the Buyer or by the Credit Agreement, the Bankruptcy Case or otherwise as necessary to consummate the Plan Transactions, or (iv) to the extent required by applicable law, statute, rule or regulation, (v) for the performance of its obligations under the Original Purchase Agreement or (vi) as may be otherwise consented to by Parent (which the Buyer in writing, such consent shall not to be unreasonably withheld, conditioned withheld or delayed), the Company shall conduct its business in the ordinary course in substantially the same manner in which it is conducted as of the date hereof, to the extent consistent with such business, use its commercially reasonable efforts to preserve intact its present business organization and to preserve its relationships with members, suppliers and others having business dealings with it, and not take any action that would have caused a breach of Section 2.6 had it been taken prior to the date hereof and, without limiting the generality of the foregoing, the Company shall not, and the Company shall not permit cause each of its Subsidiaries not to:
(a) adopt authorize for issuance, issue or sell or agree or commit to issue or sell (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any change in shares of beneficial interest of any class or any other securities or equity equivalents (including share appreciation rights or partnership interests), other than the issuance of Common Stock upon the exercise of Company Articles Options or Company Warrants outstanding on the Company Bylawsdate of this Agreement thereof;
(b) merge acquire assets, make capital expenditures, enter into any option to acquire assets, exercise an option or consolidate the Company other right or election, or lease, transfer or dispose of any of its Subsidiaries with any Person, other than the Mergers and other than any mergers or consolidations among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(c) redeem, repurchase or defease any Indebtedness of the Company or any Subsidiary of the Company in excess of $75 million (provided that no prepayment penalty would be payable in connection therewith), other than (i) at stated maturity and any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as in effect on the date hereof or as modified with the consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) repayments or prepayments of Indebtedness under the Company Credit Facilities (or any other revolving credit facility permitted to be incurred pursuant to the terms of this Agreement), (iii) in connection with any replacement, renewal, extension, refinancing, refunding or repayment permitted by Section 6.1(d)(iv) or (iv) any of the foregoing relating to intercompany Indebtedness;
(d) incur, create, assume or otherwise become liable for any Indebtedness, except (i) for any Indebtedness incurred in the ordinary course of business, including mortgages on real property acquired by the Company or any of its Subsidiaries, (ii) for Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries, (iii) for Indebtedness under the Company Credit Facilities (and any other credit facility of the Company hereafter created with term or revolving Indebtedness on terms substantially the same as those governing the existing revolving credit facility as it may have been amended consistent with this clause (d)), (iv) for Indebtedness incurred to replace, renew, extend, refinance, refund or repay any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness, (v) for any guarantees by the Company of Indebtedness of the Company’s Subsidiaries or guarantees by the Company’s Subsidiaries of Indebtedness assets of the Company or any of its Subsidiariesthe Subsidiaries (whether by asset sale, and (vi) with respect to any Indebtedness not in accordance with clauses (i) through (v)stock sale, for any Indebtedness not to exceed $50 million in aggregate principal amount outstanding at the time incurred by the Company or any of its Subsidiaries;
(e) make any acquisition (including by merger, consolidation or acquisition of stock or assets) of any other Person (or any division or material amount of assets thereof) or business;
(f) make any capital expenditures, except for (i) capital expenditures up to $25 million in the aggregate (without counting any capital expenditures permitted pursuant to the following clauses (ii) and (iii)), (ii) capital expenditures made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure merger or otherwise, or (iii) capital expenditures required to comply with any applicable Law;
(g) make any loans, advances or capital contributions to, or investments in, any other Person in excess of $25 million (or, with respect to seller-financing of divestitures by the Company or any of its Subsidiaries, $15 million) (without counting any amounts pursuant to the following clauses (i) through (iv)), except for those (i) required or contemplated by existing Contracts, (ii) permitted by Section 6.1(f), (iii) solely between the Company and a Subsidiary of the Company or among Subsidiaries of the Company or (iv) made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise;
(h) pledge or otherwise encumber shares of capital stock or other voting securities of the Company or any of its Subsidiaries, other than Permitted Liens, except in accordance with the incurrence of Indebtedness not prohibited by Section 6.1(d);
(i) (A) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any of the Company Real Property, except for dispositions of the properties set forth in Section 6.1(i) of the Company Disclosure Letter (subject to the limits set forth therein); or (B) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any other properties or non-cash assets with a value in excess of $45 million in the aggregate, except in the case of this clause (B) (x) sales or dispositions made in connection with any transaction among the Company and its Subsidiaries or among the Company’s Subsidiaries or (y) sales or dispositions made in the ordinary course of business;
(jc) (i) splitincur any amount of indebtedness for borrowed money, combine or reclassify any Company Securities or amend other than indebtedness incurred pursuant to the terms of any Company SecuritiesCredit Agreement, (ii) declare, set aside or pay guarantee any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities other than (A) a dividend or distribution by a Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) any dividend or distribution reasonably necessary for the Company or any of the Company Subreits to maintain its status as a REIT or avoid or reduce the imposition of any entity-level income or excise Tax under the Code or other applicable Law, or (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securitiesindebtedness, other than in connection with (A) any redemption or repurchase of the Class A Preferred Stock, (B) the exercise of Company Options, (C) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (D) the acquisition by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (E) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, (F) the issuance of Company Securities to newly hired or promoted employees or newly appointed directors in the ordinary course of business consistent with past practicebusiness, or in connection with annual grants to employees and directors made issue or sell debt securities, (iii) make any loans, advances or capital contributions, other than in the ordinary course of business consistent with past practicebusiness, or as required (iv) mortgage, pledge or subject to comply with any Company Benefit Plan as in effect on the date material Lien any of this Agreement and (G) any transaction solely between the Company and a Subsidiary of the Company its material properties or between Subsidiaries of the Companyassets, except for Permitted Liens;
(kd) except (i) as required pursuant to existing Contracts for mandatory payments under any credit facilities, including the Credit Agreement, any indebtedness under the Credit Agreement or any Company Benefit Plan other indebtedness in effect existence on the date hereof, pay, discharge or satisfy (ii) as effected in the ordinary course of business and consistent with past practice, (A) adopt, amend or terminate any material Company Benefit Plan, (B) take any action actions to accelerate the vesting pay, discharge or paymentsatisfy) or amend, modify or fund supplement any liabilities or in any other way secure the paymentobligations, of compensation or benefits under any material Company Benefit Plan or (C) increase the annualized value of compensation and benefits to be provided to Company Employees or any other services providers of the Company or any of its Subsidiaries (other than increases in annualized value of cash compensation in the ordinary course of business consistent with past practice in an amount that does not exceed 5.0% of such annualized value, in the aggregate, immediately prior to the date hereof); provided that the Company may make payments to Company Employees who are not “named executive officers” (as defined under Regulation S-K of the Securities Act) in an amount not to exceed $1 million in the aggregate with the individual allocation and terms of such payments subject to the prior consultation with Parent;
(l) make any loans or advances to any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries;
(m) (i) hire or engage any individual who would be a Company Employee or individual independent contractor whose annual base compensation exceeds $200,000 or (ii) terminate the employment of any Company Employee whose annual base compensation exceeds $200,000, other than for cause;
(n) other than in the ordinary course of business consistent with past practice, settle or compromise any litigation or release, dismiss or otherwise dispose of any claim or arbitration not covered by insurance, other than settlements or compromises of litigation, claims or arbitration that do not, individually or in the aggregate, involve the payment of more than $15 million in excess of the amount reserved on the latest consolidated balance sheets of the Company in respect of litigation and claims, as set forth in the Company SEC Reports, and do not involve (A) any material injunctive or other non-monetary relief on the Company or any of its Subsidiaries or (B) any admission of wrongdoing by the Company or any of its Subsidiaries;
(oe) (i) cancel make or rescind any material indebtedness for borrowed money owed election relating to the Company other than as a result of a repayment of such indebtedness, Taxes that is inconsistent with past practice or (ii) waive or release any claims or right of material value except in the exercise of the Company’s commercially reasonable business judgment;
(p) enter into, materially modify or amend, or terminate any Real Property Lease (it being understood that, without limiting other modifications or amendments that may be material, any modification or amendment reducing the term or fees or other amounts that are payable to the Company or any of its Subsidiaries under any Real Property Lease will be considered a material modification or amendment of such Real Property Lease), except for the renewal, extension or replacement of any Real Property Lease expiring in accordance with its term (such renewal, extension or replacement to be on terms substantially similar to the existing Real Property Lease) or, other than in the ordinary course of business, enter into, materially modify or amend, or terminate any other Specified Contract other than as permitted by this Section 6.1;
(q) make any material change in financial its Tax accounting methodspractices unless the Company reasonably determines, principles or practicesafter prior consultation with Buyer, except insofar as may have been that such action is required by a change in GAAP or Lawapplicable law;
(rf) except as required by law or the terms of any existing Contract or as otherwise expressly provided in this Agreement, (i) enter into, adopt, materially amend or terminate any Company Benefit Plan, (ii) enter into, adopt, amend or terminate any agreement, arrangement, plan or policy between the Company or any Subsidiary and one or more of its directors or executive officers, or (iii) increase in any manner the compensation or fringe benefits of any non-executive officer or employee or pay any benefit not required by any Company Benefit Plan or arrangement as in effect as of the date hereof;
(g) (i) grant to any officer, director, direct or indirect shareholder or employee whose annual compensation is more than $100,000 (x) the right to receive any new severance, change of control or termination pay or termination benefits, (y) any increase in the right to receive any severance, change of control or termination pay or termination benefits or (ii) enter into any new employment, loan, retention, consulting, indemnification, termination, change of control, severance or similar agreement with any officer, director or employee;
(h) adopt a plan of complete or partial liquidation or dissolution resolutions providing for or authorizing such a liquidation or a dissolution, merger, consolidation, restructuring, recapitalization or reorganization (other than the Merger);
(i) amend any material term of any outstanding security of the Company or any of its SubsidiariesSubsidiary;
(sj) make, change (i) modify or revoke amend in any material Tax election respect, or change a material method of Tax accountingterminate, amend any Material Contract or Lease or waive, release or assign any material Tax Returnrights or claims under any such Material Contract or Lease, (ii) fail to comply, in any material respect, with the terms of any Material Contract or Lease, or (iii) enter in a new Contract that, if entered into prior to the date of this Agreement, would have been required to be disclosed on Schedule 2.14 of the Disclosure Letter;
(k) (i) split, combine, reclassify, recapitalize, reverse split, exchange or readjust any Company Stock or the equity interests of any Subsidiary or (ii) declare or pay dividends on, or make any other distribution with respect to, or purchase any of its capital stock, except intercompany dividends and distributions paid by a Subsidiary that is directly or indirectly wholly-owned by the Company;
(l) settle or compromise any material Tax liability, audit, claim or assessment, change any material method litigation commenced after the date of accounting for Tax purposes, enter into any Tax allocation, sharing or indemnity agreement (other than customary provisions in agreements or arrangements the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes or file any material Tax Return inconsistent with past practice other than as required by applicable Law;
(t) take any action, or fail to take any action, which action or failure to act would reasonably be expected to cause (i) the Company or any Company Subreit to fail to qualify as a REIT or (ii) any other Affiliate of the Company to fail to preserve its status as set forth on Section 4.16(c) of the Company Disclosure Letter, in each case, which failure would have a Material Adverse Effect on the Companythis Agreement; or
(um) authorize, agree or commit to do any of the foregoing. Notwithstanding or enter into an agreement to take any of the foregoing or in any other provisions of this Agreement, nothing contained in this Agreement shall prohibit the Company or any of its Subsidiaries from taking or causing to be taken any action, at any time or from time to time, that in the good faith judgment of the Company is reasonably necessary or appropriate for the Company or any of the Company Subreits to maintain its qualification as a REIT; provided that, prior to taking any such action the Company and its Subsidiaries shall inform Parent in writing of such action and shall consult with and cooperate with Parent in good faith to minimize the adverse effect of such action to the Company and Parentactions.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Equinox Holdings Inc)
Conduct of the Company and its Subsidiaries. Except as (x) set forth in Section 6.1 of the Company Disclosure Letter or as otherwise expressly permitted or required by this Agreement or required or contemplated by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary or reasonably desirable to consummate the Plan Transactions, or (y) consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from the date hereof until the earlier of the Effective Time and termination of this Agreement in accordance with its terms, the Company shall, and shall cause its Subsidiaries to, and shall use its reasonable best efforts to cause its Significant Joint Ventures to, conduct their respective businesses and operate the Company Facilities in the ordinary course and in compliance with Law, and use all commercially reasonable efforts to maintain and preserve intact its business organization, including the goodwill of any Governmental Authorities, lenders, suppliers, landlords landlords, Joint Venture partners and other Persons with which it has material business relationships, and to maintain the status of the Company as a REIT for U.S. federal income tax purposes; provided, however, that no action by the Company or its Subsidiaries or its Significant Joint Ventures of the type specifically addressed in Sections 6.1(a) through 6.1(r) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Except (i) as required by Law, (ii) as set forth in Section 6.1 of the Company Disclosure Letter, (iii) as may be expressly permitted or required by this Agreement or and, in the case of the Significant Joint Ventures, required by the Alternative Plan Sponsor terms of the applicable Joint Venture Agreement, (iv) pursuant to the Bankruptcy Case Company Reorganization, the Management Business Sale, the Management Business Distribution or otherwise as necessary to consummate the Plan Transactions, Distribution or (ivv) as may be consented to by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit its Subsidiaries or Significant Joint Ventures to:
(a) adopt any change in the Company Articles Certificate of Incorporation or the Company Bylaws;
(b) merge or consolidate the Company or any of its Subsidiaries or Significant Joint Ventures with any Person, other than the Mergers and other than any mergers or consolidations among the Company and its Subsidiaries or among the Company’s 's Subsidiaries;
(c) redeem, repurchase or defease any Indebtedness of the Company or any Subsidiary of the Company or any Significant Joint Venture in excess of $75 25 million (provided that no prepayment penalty would be payable in connection therewith), other than (i) at stated maturity and any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as in effect on the date hereof or as modified with the consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) repayments or prepayments of Indebtedness under the Company Credit Facilities (or any other revolving credit facility permitted to be incurred pursuant to the terms of this Agreement), (iii) in connection with any replacement, renewal, extension, refinancing, refunding or repayment permitted by Section 6.1(d)(iv) or (ivii) any of the foregoing relating to intercompany Indebtedness;
(d) incur, create, assume or otherwise become liable for any Indebtedness, except (i) for any Indebtedness incurred in the ordinary course of business, including mortgages on real property acquired by the Company or any of its SubsidiariesSubsidiaries or Significant Joint Ventures, (ii) for Indebtedness among the Company and its Subsidiaries and Significant Joint Ventures or among the Company’s Subsidiaries's Subsidiaries or Significant Joint Ventures, (iii) for Indebtedness under the Company Credit Facilities Company's existing revolving credit facility (and any other credit facility of the Company hereafter created with term or revolving Indebtedness on terms substantially the same as those governing the Company's existing revolving credit facility as it may have been amended consistent with this clause (d)), (iv) for Indebtedness incurred to replace, renew, extend, refinance, refund or repay any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness, (v) for any guarantees by the Company of Indebtedness of the Company’s 's Subsidiaries or Significant Joint Ventures or guarantees by the Company’s 's Subsidiaries or Significant Joint Ventures of Indebtedness of the Company or any of its SubsidiariesSubsidiaries or Significant Joint Ventures, and (vi) with respect to any Indebtedness not in accordance with clauses (i) through (v), for any Indebtedness not to exceed $50 25 million in aggregate principal amount outstanding at the time incurred by the Company or any of its SubsidiariesSubsidiaries or Significant Joint Ventures;
(e) (i) make any acquisition (including by merger, consolidation or acquisition of stock or assets) of any other Person (or any division or material amount of assets thereof) or businessbusiness or (ii) purchase any interest in any Joint Venture other than to the extent required by the terms of the applicable Joint Venture Agreement as in effect on the date hereof;
(f) make any capital expenditures, except for (i) capital expenditures up to $25 million not exceeding 110% of the amount budgeted therefor in the aggregate Company's 2012 budget, in the form made available to Parent prior to the date hereof, (without counting any ii) capital expenditures permitted in 2013 not exceeding 110% of the aggregate amount of capital expenditures contemplated by the Company's 2012 budget, (iii) capital expenditures required to honor obligations to the Company's Joint Ventures or pursuant to the following clauses (ii) and (iii))budgets of the Joint Ventures, (iiiv) capital expenditures made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise, or (iiiv) capital expenditures required to comply with any applicable Law;
(g) make any loans, advances or capital contributions to, or investments in, any other Person in excess of $25 million (or, with respect to seller-financing of divestitures by the Company or any of its Subsidiaries, $15 5 million) (without counting any amounts pursuant to the following clauses (i) through (iv)), except for those (i) required or contemplated by existing Contracts, (ii) required to honor obligations to the Company's Joint Ventures existing as of the date hereof or pursuant to the budgets of the Joint Ventures, and any obligations to the Joint Ventures in 2013 as reasonably agreed with Company's Joint Venture partners, (iii) permitted by Section 6.1(e) or 6.1(f), (iiiiv) solely between the Company and a Subsidiary of the Company or among Subsidiaries of the Company or (ivv) made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise;
(h) pledge or otherwise encumber shares of capital stock or other voting securities of the Company or any of its SubsidiariesSubsidiaries or Significant Joint Ventures, other than Permitted Liens, except in accordance with the incurrence of Indebtedness not prohibited by Section 6.1(d);
(i) (A) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any of the Company Real Property, except for dispositions of the properties set forth in Section 6.1(i) of the Company Disclosure Letter (subject to Letter, except on the limits terms set forth therein)in Section 6.1(i) of the Company Disclosure Letter; or (Bii) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any other properties or non-cash assets with a value in excess of $45 20 million in the aggregate, except in the case of this clause (Bii) (x) sales or dispositions made in connection with any transaction among the Company and its Subsidiaries and Significant Joint Ventures or among the Company’s 's Subsidiaries or (y) sales or dispositions made in the ordinary course of business;
(j) (i) split, combine or reclassify any Company Securities or amend the terms of any Company Securities, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities other than (A) a dividend or distribution by a Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) any dividend or distribution reasonably necessary for the Company or any of the Company Subreits to maintain its status as a REIT or avoid or reduce the imposition of any entity-level income or excise Tax under the Code or other applicable Law, Joint Venture or (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securities, other than in connection with (A) any the exercise, conversion, redemption or repurchase of the Class A Preferred StockCompany Convertible Notes, (B) the exercise of Company Options, (C) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (D) the acquisition by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (E) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, (F) the issuance of Company Securities to newly hired or promoted employees or newly appointed directors in the ordinary course of business consistent with past practice, or in connection with annual grants to employees and directors made in the ordinary course of business consistent with past practice, or as required to comply with any Company Benefit Plan as in effect on the date of this Agreement and (G) any transaction solely between the Company and a Subsidiary of the Company or between Subsidiaries of the Company;
(k) except (i) as required pursuant to existing Contracts or any Company Benefit Plan in effect on the date hereof, or (ii) as effected in the ordinary course of business and consistent with past practicepractice or (iii) as required by Law (including to avoid the imposition of penalty or other taxes under Section 409A of the Code), (A) adopt, amend or terminate any material Company Benefit Plan, (B) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any material Company Benefit Plan or (C) increase the annualized value of compensation and benefits to be provided to Company Employees or any other services providers of the Company or any of its Subsidiaries (other than increases in annualized value of cash compensation in the ordinary course of business consistent with past practice in an amount that does not exceed 5.0% of such annualized value, in the aggregate, immediately prior to the date hereof); provided that the Company may make payments to Company Employees who are not “named executive officers” (as defined under Regulation S-K of the Securities Act) in an amount not to exceed $1 million in the aggregate with the individual allocation and terms of such payments subject to the prior consultation with Parent;
(l) make any loans or advances to any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries;
(m) (i) hire or engage any individual who would be a Company Employee or individual independent contractor whose annual base compensation exceeds $200,000 or (ii) terminate the employment of any Company Employee whose annual base compensation exceeds $200,000, other than for cause;
(n) other than in the ordinary course of business consistent with past practice, settle or compromise any litigation or release, dismiss or otherwise dispose of any claim or arbitration not covered by insurance, other than settlements or compromises of litigation, claims or arbitration that do not, individually or in the aggregate, involve the payment of more than $15 5 million in excess of the amount reserved on the latest consolidated balance sheets of the Company in respect of litigation and claims, as set forth in the Company SEC Reports, and do not involve (A) any material injunctive or other non-monetary relief on the Company or Company, any of its Subsidiaries or (B) any admission of wrongdoing by the Company or any of its SubsidiariesManagement Business;
(om) (i) cancel any material indebtedness for borrowed money owed to the Company other than as a result of a repayment of such indebtedness, or (ii) waive or release any claims or right of material value except in the exercise of the Company’s 's commercially reasonable business judgment;
(pn) enter into, materially modify or amend, or terminate any Joint Venture Agreement or any Management Agreement or Real Property Lease (it being understood that, without limiting other modifications or amendments that may be material, any modification or amendment reducing the term or fees or other amounts that are payable to the Company or any of its Subsidiaries under any Management Agreement or Real Property Lease will be considered a material modification or amendment of such Management Agreement or Real Property Lease), except for the renewal, extension or replacement of any Management Agreement or Real Property Lease expiring in accordance with its term (such renewal, extension or replacement to be on terms substantially similar to the existing Management Agreement or Real Property Lease) or, other than in the ordinary course of business, enter into, materially modify or amend, or terminate any other Specified Contract other than as permitted by this Section 6.1;
(qo) make any material change in financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or Law;
(rp) adopt a plan of complete or partial liquidation or dissolution of the Company or any of its Subsidiaries;
(sq) make, change or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return, or settle or compromise any material Tax liability, audit, claim or assessment, change any material method of accounting for Tax purposes, enter into any Tax allocation, sharing or indemnity agreement (other than customary provisions in agreements or arrangements the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes or prepare and file any material Tax Return in a manner that is inconsistent with past practice other than as required by applicable Law;
(t) or, on any such Tax Return, take any actionposition, make any election or fail to take adopt any actionmethod that is inconsistent with positions taken, which action elections made or failure to act would reasonably be expected to cause (i) the Company methods used in preparing or any Company Subreit to fail to qualify as a REIT or (ii) any other Affiliate of the Company to fail to preserve its status as set forth on Section 4.16(c) of the Company Disclosure Letterfiling similar Tax Returns in prior periods, in each case, which failure if such action would have increase by a Material Adverse Effect on material amount the CompanyTax liability of the Company and its Subsidiaries; or
(ur) authorize, agree or commit to do any of the foregoing. Notwithstanding any of the foregoing or in any other provisions of this Agreement, nothing contained in this Agreement shall prohibit the Company or any of its Subsidiaries from taking or causing to be taken any action, at any time or from time to time, that in the good faith judgment of the Company is reasonably necessary or appropriate for the Company or any of the Company Subreits to maintain its qualification as a REIT; provided that, prior to taking any such action the Company and its Subsidiaries shall inform Parent in writing of such action and shall consult with and cooperate with Parent in good faith to minimize the adverse effect of such action to the Company and Parent.
Appears in 1 contract
Conduct of the Company and its Subsidiaries. Except as (x) set forth in Section 6.1 Schedule 4.1 of the Company Disclosure Letter Letter, as contemplated hereby or as otherwise expressly permitted or required by this Agreement or required or contemplated by with the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary or reasonably desirable to consummate the Plan Transactions, or (y) consented to in writing by prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned withheld or delayed), from the date hereof until the earlier of to the Effective Time and termination of this Agreement in accordance with its termsTime, the Company shall, and shall cause its Subsidiaries to, conduct their respective businesses its business in all material respects in the ordinary course and course, in compliance with Lawsubstantially the same manner in which such business is conducted as of the date hereof, and to the extent consistent with such business shall use all commercially its reasonable best efforts to maintain and preserve intact its present business organization, including the goodwill of any Governmental Authorities, lenders, suppliers, landlords and other Persons with which it has material business relationships, organization and to maintain preserve its relationships with customers, suppliers and others having business dealings with it. Without limiting the status generality of the Company as a REIT for U.S. federal income tax purposes; providedforegoing, however, that no action by the Company or its Subsidiaries of the type specifically addressed in Sections 6.1(a) through 6.1(r) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Except (i) as required by Law, (ii) except as set forth in Section 6.1 Schedule 4.1 of the Company Disclosure Letter, (iii) as may be expressly permitted contemplated hereby or required by this Agreement or required by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary to consummate the Plan Transactions, or (iv) as may be consented to by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit its Subsidiaries to:
(a) adopt any change in the Company Articles or the Company Bylaws;
(b) merge or consolidate the Company or any of its Subsidiaries with any Person, other than the Mergers and other than any mergers or consolidations among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(c) redeem, repurchase or defease any Indebtedness of the Company or any Subsidiary of the Company in excess of $75 million (provided that no prepayment penalty would be payable in connection therewith), other than (i) at stated maturity and any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as in effect on the date hereof or as modified with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned withheld or delayed), from the date hereof to the Effective Time:
(a) the Company shall not amend its certificate of incorporation or by-laws or take, agree to take or authorize any action to wind up its affairs or dissolve;
(b) none of the Company or its Subsidiaries shall amend any Company Benefit Plan in any material respect or establish any new arrangement that would (if it were in effect on the date hereof) constitute a Company Benefit Plan, nor shall the Company or its Subsidiaries enter into any retention, loan, severance or other similar types of agreements with, or take any action to increase the compensation of, its employees or officers, other than in the ordinary course of business in a manner consistent with past practice (including ordinary renewals of health and welfare benefit plans) or to the extent required under any Company Benefit Plan, collective bargaining agreement, labor agreement, works council agreement or other contractual arrangement or by applicable Law;
(c) none of the Company or its Subsidiaries shall (i) redeem or repurchase, directly or indirectly, any shares of the capital stock of the Company or its Subsidiaries (other than pursuant to the terms of awards under the Stock Plan), (ii) repayments reclassify, combine, split, subdivide or prepayments of Indebtedness under the Company Credit Facilities (or any other revolving credit facility permitted to be incurred pursuant to amend the terms of this Agreement)any of its capital stock, (iii) in connection declare or pay any dividends or distributions, with respect to any replacement, renewal, extension, refinancing, refunding shares of its capital stock (other than dividends paid by the Company’s wholly-owned Subsidiaries to the Company or repayment permitted by Section 6.1(d)(ivits wholly-owned Subsidiaries) or (iv) enter into any agreement with respect to the voting of the foregoing relating to intercompany Indebtednessits capital stock;
(d) incurnone of the Company or its Subsidiaries shall issue, createsell, assume pledge, transfer or otherwise become liable for encumber any Indebtednessequity securities of the Company or its Subsidiaries, securities convertible into equity securities of any of the Company or its Subsidiaries or warrants, options or other rights to acquire any such securities (other than pursuant to the exercise of Company Options or the conversion of RSUs and DSUs outstanding on the date hereof in accordance with the terms of such instruments and the terms of the Stock Plan);
(e) none of the Company or its Subsidiaries shall sell, assign, transfer, abandon or allow to lapse, pledge or encumber, or grant any Lien, other than a Permitted Lien, on any of its material assets and properties, except (i) for any Indebtedness incurred in the ordinary course of business, including mortgages on real property acquired by the Company or any of its Subsidiaries, business in a manner consistent with past practice;
(iif) for Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries, (iii) for Indebtedness under the Company Credit Facilities (and any other credit facility of the Company hereafter created with term or revolving Indebtedness on terms substantially the same as those governing the existing revolving credit facility as it may have been amended consistent with this clause (d)), (iv) for Indebtedness incurred to replace, renew, extend, refinance, refund or repay any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness, (v) for any guarantees by the Company of Indebtedness of the Company’s Subsidiaries or guarantees by the Company’s Subsidiaries of Indebtedness of the Company or any of its Subsidiaries, and (vi) with respect to any Indebtedness shall not in accordance with clauses (i) through (v), for any Indebtedness not to exceed $50 million in aggregate principal amount outstanding at the time incurred by the Company or any of its Subsidiaries;
(e) make any acquisition (including by merger, consolidation material change to its accounting procedures or acquisition of stock or assets) of any other Person (or any division or material amount of assets thereof) or business;
(f) make any capital expenditurespractices, except for (i) capital expenditures up to $25 million in the aggregate (without counting any capital expenditures permitted pursuant to the following clauses (ii) and (iii)), (ii) capital expenditures made in response to any emergency, whether caused as required by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God GAAP or event of force majeure or otherwise, or (iii) capital expenditures required to comply with any applicable Law;
(g) make any loans, advances or capital contributions to, or investments in, any other Person in excess of $25 million (or, with respect to seller-financing of divestitures by the Company or any of its Subsidiaries, $15 million) (without counting any amounts pursuant to the following clauses (i) through (iv)), except for those (i) required or contemplated by existing Contracts, (ii) permitted by Section 6.1(f), (iii) solely between the Company and a Subsidiary none of the Company or among its Subsidiaries shall cancel without reasonable consideration any material debts owing to or held by any of the Company or (iv) made its Subsidiaries, except for debts cancelled in response to the ordinary course of business in a manner consistent with past practice in connection with collection of accounts receivable and settlement of claims against any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God the Company or event of force majeure or otherwiseits Subsidiaries;
(h) pledge or otherwise encumber shares of capital stock or other voting securities none of the Company or its Subsidiaries shall make any of its Subsidiariesmaterial loan or advance to, or any investment in, any other Person, other than Permitted Liensloans, except advances or investments to or in accordance with the incurrence of Indebtedness not prohibited by Section 6.1(d);
(i) (A) sell, lease (except for the exercise of any extension Subsidiary or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any of the Company Real Property, except for dispositions of the properties set forth in Section 6.1(i) of the Company Disclosure Letter (subject to the limits set forth therein); or (B) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any other properties or non-cash assets with a value in excess of $45 million in the aggregate, except in the case of this clause (B) (x) sales or dispositions made in connection with any transaction among the Company and its Subsidiaries or among the Company’s Subsidiaries or (y) sales or dispositions made in the ordinary course of business;
(j) (i) split, combine or reclassify any Company Securities or amend the terms of any Company Securities, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities other than (A) a dividend or distribution by a Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) any dividend or distribution reasonably necessary for the Company or any of the Company Subreits to maintain its status as a REIT or avoid or reduce the imposition of any entity-level income or excise Tax under the Code or other applicable Law, or (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securities, other than in connection with (A) any redemption or repurchase of the Class A Preferred Stock, (B) the exercise of Company Options, (C) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (D) the acquisition by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (E) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, (F) the issuance of Company Securities to newly hired or promoted employees or newly appointed directors in the ordinary course of business consistent with past practice;
(i) none of the Company or its Subsidiaries shall, other than in the ordinary course of business in a manner consistent with past practice (i) enter into, terminate (other than as a result of the expiration of such Contract’s term), amend or modify any Listed Contract or Contract that would be a Listed Contract had such Contract been in effect on the date hereof or (ii) settle or compromise any material actions, suits, investigations, arbitrations or proceedings or enter into any consent, injunction or similar restraint or equitable relief in settlement of any material actions, suits, investigations, arbitrations or proceedings;
(j) none of the Company or its Subsidiaries shall, (i) incur any Indebtedness (other than pursuant to the terms of the Credit Agreement as in effect on the date hereof in the ordinary course of business) or vary the material terms of any existing debt securities, (ii) issue or sell any debt securities, or (iii) take any steps to mortgage or pledge to secure any material obligation, or subject to any material Lien, any of their material properties other than pursuant to the terms of the Credit Agreement as in connection with annual grants to employees and directors made effect on the date hereof;
(k) none of the Company or its Subsidiaries shall transfer, assign, repay, discharge, satisfy or otherwise reduce in any respect any of the Designated Intercompany Loans (including by entering into offsetting loan transactions that would have the effect of the same);
(l) none of the Company or its Subsidiaries shall acquire (other than purchases of inventory or equipment in the ordinary course of business consistent with past practice, or as required to comply with any Company Benefit Plan as in effect on the date of this Agreement and (G) any transaction solely between the Company and a Subsidiary of the Company or between Subsidiaries of the Company;
(k) except (i) as required pursuant to existing Contracts or any Company Benefit Plan in effect on the date hereof, or (ii) as effected in the ordinary course of business and consistent with past practice, (A) adopt, amend or terminate any material Company Benefit Plan, (B) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any material Company Benefit Plan or (C) increase the annualized value of compensation and benefits to be provided to Company Employees or any other services providers of the Company or any of its Subsidiaries (other than increases in annualized value of cash compensation in the ordinary course of business consistent with past practice in an amount that does not exceed 5.0% of such annualized value, in the aggregate, immediately prior to the date hereof); provided that the Company may make payments to Company Employees who are not “named executive officers” (as defined under Regulation S-K of the Securities Act) in an amount not to exceed $1 million in the aggregate with the individual allocation and terms of such payments subject to the prior consultation with Parent;
(l) make any loans or advances to any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiariesbusiness;
(m) (i) hire none of the Company or engage its Subsidiaries shall make any individual who would be a Company Employee or individual independent contractor whose annual base compensation exceeds capital expenditures in excess of $200,000 or (ii) terminate 25 million in the employment of any Company Employee whose annual base compensation exceeds $200,000, other than for causeaggregate;
(n) other than in none of the ordinary course of business consistent Company or its Subsidiaries shall make any Tax election inconsistent with past most recent practice, change any existing Tax election or annual accounting period, change any Tax accounting method, file any amended Tax Return, enter into any Tax closing agreement, settle or compromise any litigation or release, dismiss or otherwise dispose of any Tax claim or arbitration not covered by insurance, other than settlements assessment relating to the Company or compromises of litigation, claims or arbitration that do not, individually or in the aggregate, involve the payment of more than $15 million its Subsidiaries in excess of the amount reserved on the latest consolidated balance sheets of the Company in respect of litigation and claims, as set forth therefor in the Company SEC ReportsFinancial Statements, and do not involve (A) or surrender any material injunctive right to claim a refund of Taxes, except where such election, change, amendment, agreement, settlement, surrender, consent, or other non-monetary relief on the Company or any of its Subsidiaries or (B) any admission of wrongdoing by the Company or any of its Subsidiaries;action would not have a Material Adverse Effect; and
(o) (i) cancel any material indebtedness for borrowed money owed to the Company other than as a result of a repayment of such indebtedness, or (ii) waive or release any claims or right of material value except in the exercise of the Company’s commercially reasonable business judgment;
(p) enter into, materially modify or amend, or terminate any Real Property Lease (it being understood that, without limiting other modifications or amendments that may be material, any modification or amendment reducing the term or fees or other amounts that are payable to the Company or any of its Subsidiaries under any Real Property Lease will be considered a material modification or amendment of such Real Property Lease), except for the renewal, extension or replacement of any Real Property Lease expiring in accordance with its term (such renewal, extension or replacement to be on terms substantially similar to the existing Real Property Lease) or, other than in the ordinary course of business, enter into, materially modify or amend, or terminate any other Specified Contract other than as permitted by this Section 6.1;
(q) make any material change in financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or Law;
(r) adopt a plan of complete or partial liquidation or dissolution none of the Company or any of its Subsidiaries;
(s) make, change or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return, or settle or compromise any material Tax liability, audit, claim or assessment, change any material method of accounting for Tax purposes, Subsidiaries shall enter into any Tax allocation, sharing agreement or indemnity agreement (other than customary provisions in agreements or arrangements the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes or file any material Tax Return inconsistent with past practice other than as required by applicable Law;
(t) take any action, or fail to take any action, which action or failure to act would reasonably be expected to cause (i) the Company or any Company Subreit to fail to qualify as otherwise make a REIT or (ii) any other Affiliate of the Company to fail to preserve its status as set forth on Section 4.16(c) of the Company Disclosure Letter, in each case, which failure would have a Material Adverse Effect on the Company; or
(u) authorize, agree or commit commitment to do any of the foregoing. Notwithstanding any of the foregoing or in any other provisions of this Agreement, nothing contained in this Agreement shall prohibit the Company or any of its Subsidiaries from taking or causing to be taken any action, at any time or from time to time, that in the good faith judgment of the Company is reasonably necessary or appropriate for the Company or any of the Company Subreits to maintain its qualification as a REIT; provided that, prior to taking any such action the Company and its Subsidiaries shall inform Parent in writing of such action and shall consult with and cooperate with Parent in good faith to minimize the adverse effect of such action to the Company and Parent.
Appears in 1 contract
Samples: Merger Agreement (VWR Funding, Inc.)
Conduct of the Company and its Subsidiaries. (a) Except as (x) set forth in Section 6.1 of the Company Disclosure Letter or as otherwise expressly permitted or required by this Agreement or required or contemplated by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary or reasonably desirable to consummate the Plan Transactions, or (y) consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayedSchedule 6.1(a), from the date hereof until to the earlier Closing, except (i) for entering into and performing this Agreement, (ii) for the effect of the Effective Time and termination consummation of this Agreement the transactions contemplated hereby, or (iii) as otherwise consented to by the Buyer in accordance with its termswriting, such consent not to be unreasonably withheld, the Company shall, and Sellers shall cause the Company and each of its Subsidiaries to, to conduct their respective businesses its business in the ordinary course and in compliance with Law, and use all commercially reasonable efforts to maintain and preserve intact its business organization, including substantially the goodwill of any Governmental Authorities, lenders, suppliers, landlords and other Persons with same manner in which it previously has material business relationships, been conducted and to maintain the status of the Company as a REIT for U.S. federal income tax purposes; provided, however, not take any action that no action by the Company or its Subsidiaries of the type specifically addressed in Sections 6.1(a) through 6.1(r) shall be deemed would cause a breach of Section 4.6 if the action had been taken prior to the execution of this sentence unless such action would constitute a breach of such other provision. Except (i) as required by Law, (ii) as set forth in Section 6.1 of the Company Disclosure Letter, (iii) as may be expressly permitted or required by this Agreement or required by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary to consummate the Plan Transactions, or (iv) as may be consented to by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit its Subsidiaries to:
(a) adopt any change in the Company Articles or the Company Bylaws;.
(b) merge or consolidate Notwithstanding anything in this Agreement to the Company or any of its Subsidiaries with any Personcontrary, other than the Mergers and other than any mergers or consolidations among the Company and its Subsidiaries or among will consult with the Company’s Subsidiaries;
(c) redeem, repurchase or defease any Indebtedness of the Company or any Subsidiary of the Company Buyer in excess of $75 million (provided that no prepayment penalty would be payable in connection therewith), other than good faith regarding (i) at stated maturity and any amendment, modification or termination (partial or complete) of, waiver under or consent with respect to, any Lease, any Contract which is required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as (or had it been in effect on the date hereof would have been required) to be disclosed in Schedule 4.16 or as modified with any of the consent of Parent Contracts listed in Schedule 6.1(b)(i) and (which consent shall not be unreasonably withheld, conditioned or delayedii), ; (ii) repayments entering into any binding forecast or prepayments of Indebtedness other firm commitment purchase orders under the Company Credit Facilities (or any other revolving credit facility permitted to be incurred pursuant to the terms of this Agreement), (iii) in connection with any replacement, renewal, extension, refinancing, refunding or repayment permitted by Section 6.1(d)(iv) or (iv) any of the foregoing relating to intercompany Indebtedness;
(d) incur, create, assume or otherwise become liable for any Indebtedness, except (i) for any Indebtedness incurred Contracts listed in the ordinary course of business, including mortgages on real property acquired by the Company or any of its Subsidiaries, (ii) for Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries, (iii) for Indebtedness under the Company Credit Facilities (and any other credit facility of the Company hereafter created with term or revolving Indebtedness on terms substantially the same as those governing the existing revolving credit facility as it may have been amended consistent with this clause (d)), (iv) for Indebtedness incurred to replace, renew, extend, refinance, refund or repay any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness, (v) for any guarantees by the Company of Indebtedness of the Company’s Subsidiaries or guarantees by the Company’s Subsidiaries of Indebtedness of the Company or any of its Subsidiaries, and (vi) with respect to any Indebtedness not in accordance with clauses (i) through (v), for any Indebtedness not to exceed $50 million in aggregate principal amount outstanding at the time incurred by the Company or any of its Subsidiaries;
(e) make any acquisition (including by merger, consolidation or acquisition of stock or assets) of any other Person (or any division or material amount of assets thereof) or business;
(f) make any capital expenditures, except for (i) capital expenditures up to $25 million in the aggregate (without counting any capital expenditures permitted pursuant to the following clauses (iiSchedule 6.1(b)(ii) and (iii)), (ii) capital expenditures made in response to entering into any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise, or (iii) capital expenditures required to comply with any applicable Law;
(g) make any loans, advances or capital contributions to, or investments in, any other Person in excess of $25 million (or, with respect to seller-financing of divestitures by the Company or any of its Subsidiaries, $15 million) (without counting any amounts pursuant material agreements relating to the following clauses (i) through (ivitems listed on Schedule 6.1(b)(iii)), except for those (i) required or contemplated by existing Contracts, (ii) permitted by Section 6.1(f), (iii) solely between the Company and a Subsidiary of the Company or among Subsidiaries of the Company or (iv) made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise;
(h) pledge or otherwise encumber shares of capital stock or other voting securities of the Company or any of its Subsidiaries, other than Permitted Liens, except in accordance with the incurrence of Indebtedness not prohibited by Section 6.1(d);
(i) (A) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any of the Company Real Property, except for dispositions of the properties set forth in Section 6.1(i) of the Company Disclosure Letter (subject to the limits set forth therein); or (B) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any other properties or non-cash assets with a value in excess of $45 million in the aggregate, except in the case of this clause (B) (x) sales or dispositions made in . In connection with any transaction among the Company and its Subsidiaries or among the Company’s Subsidiaries or (y) sales or dispositions made in the ordinary course of business;
(j) (i) splitsuch consultation, combine or reclassify any Company Securities or amend the terms of any Company Securities, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities other than (A) a dividend or distribution by a Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) any dividend or distribution reasonably necessary for the Company or any of the Company Subreits to maintain its status as a REIT or avoid or reduce the imposition of any entity-level income or excise Tax under the Code or other applicable Law, or (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securities, other than in connection with (A) any redemption or repurchase of the Class A Preferred Stock, (B) the exercise of Company Options, (C) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (D) the acquisition by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (E) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, (F) the issuance of Company Securities to newly hired or promoted employees or newly appointed directors in the ordinary course of business consistent with past practice, or in connection with annual grants to employees and directors made in the ordinary course of business consistent with past practice, or as required to comply with any Company Benefit Plan as in effect on the date of this Agreement and (G) any transaction solely between the Company and a Subsidiary of the Company or between Subsidiaries of the Company;
(k) except (i) as required pursuant to existing Contracts or any Company Benefit Plan in effect on the date hereof, or (ii) as effected in the ordinary course of business and consistent with past practice, (A) adopt, amend or terminate any material Company Benefit Plan, (B) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any material Company Benefit Plan or (C) increase the annualized value of compensation and benefits to be provided to Company Employees or any other services providers of the Company or any of its Subsidiaries (other than increases in annualized value of cash compensation in the ordinary course of business consistent with past practice in an amount that does not exceed 5.0% of such annualized value, in the aggregate, immediately prior to the date hereof); provided that the Company may make payments to Company Employees who are not “named executive officers” (as defined under Regulation S-K of the Securities Act) in an amount not to exceed $1 million in the aggregate with the individual allocation and terms of such payments subject to the prior consultation with Parent;
(l) make any loans or advances to any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries;
(m) (i) hire or engage any individual who would be a Company Employee or individual independent contractor whose annual base compensation exceeds $200,000 or (ii) terminate the employment of any Company Employee whose annual base compensation exceeds $200,000, other than for cause;
(n) other than in the ordinary course of business consistent with past practice, settle or compromise any litigation or release, dismiss or otherwise dispose of any claim or arbitration not covered by insurance, other than settlements or compromises of litigation, claims or arbitration that do not, individually or in the aggregate, involve the payment of more than $15 million in excess of the amount reserved on the latest consolidated balance sheets of the Company in respect of litigation and claims, as set forth in the Company SEC Reports, and do not involve (A) any material injunctive or other non-monetary relief on the Company or any of its Subsidiaries or (B) any admission of wrongdoing by the Company or any of its Subsidiaries;
(o) (i) cancel any material indebtedness for borrowed money owed to the Company other than as a result of a repayment of such indebtedness, or (ii) waive or release any claims or right of material value except in the exercise of the Company’s commercially reasonable business judgment;
(p) enter into, materially modify or amend, or terminate any Real Property Lease (it being understood that, without limiting other modifications or amendments that may be material, any modification or amendment reducing the term or fees or other amounts that are payable to the Company or any of its Subsidiaries under any Real Property Lease will be considered a material modification or amendment of such Real Property Lease), except for the renewal, extension or replacement of any Real Property Lease expiring in accordance with its term (such renewal, extension or replacement to be on terms substantially similar to the existing Real Property Lease) or, other than in the ordinary course of business, enter into, materially modify or amend, or terminate any other Specified Contract other than as permitted by this Section 6.1;
(q) make any material change in financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or Law;
(r) adopt a plan of complete or partial liquidation or dissolution of the Company or any of its Subsidiaries;
(s) make, change or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return, or settle or compromise any material Tax liability, audit, claim or assessment, change any material method of accounting for Tax purposes, enter into any Tax allocation, sharing or indemnity agreement (other than customary provisions in agreements or arrangements the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes or file any material Tax Return inconsistent with past practice other than as required by applicable Law;
(t) take any action, or fail to take any action, which action or failure to act would reasonably be expected to cause (i) the Company or any Company Subreit to fail to qualify as a REIT or (ii) any other Affiliate of the Company to fail to preserve its status as set forth on Section 4.16(c) of the Company Disclosure Letter, in each case, which failure would have a Material Adverse Effect on the Company; or
(u) authorize, agree or commit to do any of the foregoing. Notwithstanding any of the foregoing or in any other provisions of this Agreement, nothing contained in this Agreement shall prohibit the Company or any of its Subsidiaries from taking or causing to be taken any action, at any time or from time to time, that in the good faith judgment of the Company is reasonably necessary or appropriate for the Company or any of the Company Subreits to maintain its qualification as a REIT; provided that, prior to taking any such action the Company and its Subsidiaries shall inform Parent in writing of such action and shall consult with and cooperate with Parent consider in good faith to minimize the adverse effect any comments or suggestions of Buyer and shall not proceed with such action without the approval of Buyer or one of its representatives, which approval shall not be unreasonably withheld or delayed; provided that if approval is not given, Buyer shall deliver to the Company a written explanation detailing its specific reasons for withholding such approval; and Parentprovided further that if the Buyer fails to deliver such written explanation within two business days after request by the Company, the Company shall be permitted to take such action.
(c) Notwithstanding anything in this Agreement to the contrary, subject to the satisfaction of the “shareholder approval requirements” of Section 280G(b)(5)(B) of the Code and the regulations thereunder, the Company may take all actions reasonably necessary to pay, and shall at the Closing cause to be paid, the Management Amount to the persons and in the amounts listed on Schedule 6.1(c), subject to all applicable Employment and Withholding Taxes.
Appears in 1 contract
Conduct of the Company and its Subsidiaries. Except as for matters (xi) set forth in Section 6.1 6.01 of the Company Disclosure Letter Letter, (ii) contemplated or as otherwise expressly permitted or by this Agreement, (iii) required by this Agreement Law or required or contemplated by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary or reasonably desirable to consummate the Plan Transactions, a Governmental Entity of competent jurisdiction or (yiv) consented agreed to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from the date hereof of this Agreement until the earlier of the Effective Time and the termination of this Agreement in accordance with its termspursuant to Article IX, the Company shallwill use commercially reasonable efforts to, and shall to cause its Subsidiaries to, conduct their respective businesses in all material respects in the ordinary course of business consistent with past practice and in compliance with Law, and use all commercially reasonable efforts to maintain and preserve intact its current business organization, including the services of its key employees and the goodwill of any Governmental AuthoritiesEntities, customers, lenders, suppliersdistributors, landlords suppliers and other Persons with which it has material business relationships, and to maintain . Without limiting the status generality of the Company as a REIT foregoing, except for U.S. federal income tax purposes; provided, however, that no action by the Company or its Subsidiaries of the type specifically addressed in Sections 6.1(a) through 6.1(r) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Except matters (i) as required by Law, (ii) as set forth in Section 6.1 6.01 of the Company Disclosure Letter, (iiiii) as may be expressly contemplated or permitted or by this Agreement, (ii) required by this Agreement Law or required by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary to consummate the Plan Transactions, a Governmental Entity of competent jurisdiction or (iv) as may be consented agreed to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement pursuant to Article IX, the Company shall not, will not and shall not permit will cause its Subsidiaries not to:
(a) adopt any change except with respect to bonuses or other incentive compensation made in the Company Articles ordinary course of business consistent with past practice (including without limitation an annual bonus or compensation plan adopted for fiscal year 2008 consistent with annual plans for prior years), adopt or amend in any material respect, any bonus, profit sharing, compensation, severance, change-in-control, termination, stock option, restricted stock, stock purchase, stock appreciation right, pension, retirement, employment or other employee benefit agreement, trust, plan or other arrangement for the benefit or welfare of any director, officer or employee of the Company Bylawsor its Subsidiaries or increase in any manner the compensation or fringe benefits of any director, officer or employee of the Company or its Subsidiaries (except, in each case, for annual increases and cost of living increases for the benefit of officers (including as set forth in any employment agreements) and employees of the Company or its Subsidiaries which, in the aggregate, are consistent with past practice);
(b) merge or consolidate the Company or any of its Subsidiaries with any Personsell, other than the Mergers and other than any mergers or consolidations among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(c) redeemlease, repurchase or defease any Indebtedness of the Company or any Subsidiary of the Company in excess of $75 million (provided that no prepayment penalty would be payable in connection therewith)license, other than (i) at stated maturity and any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as in effect on the date hereof or as modified with the consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) repayments or prepayments of Indebtedness under the Company Credit Facilities (or any other revolving credit facility permitted to be incurred pursuant to the terms of this Agreement), (iii) in connection with any replacement, renewal, extension, refinancing, refunding or repayment permitted by Section 6.1(d)(iv) or (iv) any of the foregoing relating to intercompany Indebtedness;
(d) incur, create, assume or otherwise become liable for any Indebtedness, except (i) for any Indebtedness incurred in the ordinary course of business, including mortgages on real property acquired by the Company or any of its Subsidiaries, (ii) for Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries, (iii) for Indebtedness under the Company Credit Facilities (and any other credit facility of the Company hereafter created with term or revolving Indebtedness on terms substantially the same as those governing the existing revolving credit facility as it may have been amended consistent with this clause (d)), (iv) for Indebtedness incurred to replace, renew, extend, refinance, refund or repay any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness, (v) for any guarantees by the Company of Indebtedness of the Company’s Subsidiaries or guarantees by the Company’s Subsidiaries of Indebtedness of the Company or any of its Subsidiaries, and (vi) with respect to any Indebtedness not in accordance with clauses (i) through (v), for any Indebtedness not to exceed $50 million in aggregate principal amount outstanding at the time incurred by the Company or any of its Subsidiaries;
(e) make any acquisition (including by merger, consolidation or acquisition of stock or assets) of any other Person (or any division or material amount of assets thereof) or business;
(f) make any capital expenditures, except for (i) capital expenditures up to $25 million in the aggregate (without counting any capital expenditures permitted pursuant to the following clauses (ii) and (iii)), (ii) capital expenditures made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise, or (iii) capital expenditures required to comply with any applicable Law;
(g) make any loans, advances or capital contributions to, or investments in, any other Person in excess of $25 million (or, with respect to seller-financing of divestitures by the Company or any of its Subsidiaries, $15 million) (without counting any amounts pursuant to the following clauses (i) through (iv)), except for those (i) required or contemplated by existing Contracts, (ii) permitted by Section 6.1(f), (iii) solely between the Company and a Subsidiary of the Company or among Subsidiaries of the Company or (iv) made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise;
(h) pledge mortgage or otherwise encumber shares of capital stock or other voting securities of the Company or subject to any of its Subsidiaries, other than Permitted Liens, except in accordance with the incurrence of Indebtedness not prohibited by Section 6.1(d);
(i) (A) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback Lien or otherwise dispose of any of the Company Real Propertyits properties or assets other than immaterial properties or assets (or immaterial portions of properties or assets), except for dispositions of the properties set forth in Section 6.1(i) of the Company Disclosure Letter (subject to the limits set forth therein); or (B) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any other properties or non-cash assets with a value in excess of $45 million in the aggregate, except in the case of this clause (B) (x) sales or dispositions made in connection with any transaction among the Company and its Subsidiaries or among the Company’s Subsidiaries or (y) sales or dispositions made in the ordinary course of business;
(j) (i) split, combine or reclassify any Company Securities or amend the terms of any Company Securities, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities other than (A) a dividend or distribution by a Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) any dividend or distribution reasonably necessary for the Company or any of the Company Subreits to maintain its status as a REIT or avoid or reduce the imposition of any entity-level income or excise Tax under the Code or other applicable Law, or (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securities, other than in connection with (A) any redemption or repurchase of the Class A Preferred Stock, (B) the exercise of Company Options, (C) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (D) the acquisition by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (E) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, (F) the issuance of Company Securities to newly hired or promoted employees or newly appointed directors in the ordinary course of business consistent with past practice, or and other than Liens (A) arising as a matter of Law, (B) granted in connection with annual grants the incurrence, assumption or guarantee of any indebtedness permitted under clause (j) below, and (C) as required by after acquired property covenants in contracts evidencing indebtedness of the Company or its Subsidiaries and Liens created in connection with the refinancing of indebtedness of the Company or its Subsidiaries that are no less favorable to employees the Company and directors made its Subsidiaries than those Liens that were created in connection with the indebtedness that is being refinanced and except for sales of excess or obsolete assets in the ordinary course of business consistent with past practice;
(c) (A) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, (B) 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 or (C) purchase, redeem or otherwise acquire any shares of capital stock of the Company or its Subsidiaries or any other securities thereof or any rights or options or warrants to acquire any such shares or other securities, except that (x) any Subsidiary of the Company may pay dividends to the Company (and any intermediate wholly owned holding company) and (y) the Company may purchase Company Common Stock for the purpose of funding or providing benefits under employee benefit plans, stock option and other incentive compensation plans, directors plans and stock purchase and dividend reinvestment plans in accordance with past practice or as required may be permitted by Section 6.01(a) or Section 6.01(d);
(d) authorize for issuance, issue, deliver, sell or agree or commit to comply issue, sell or deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any shares of its capital stock, any other voting securities or any securities exercisable or exchangeable for or convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities or any other securities or equity equivalents (including, without limitation, stock appreciation rights) other than issuances upon exercise of Options, the Portside Warrant, the Company Convertible Note or Company Rights or in connection with stock-based awards and in each case outstanding as of the date hereof or granted after the date hereof in accordance with the terms of any Company Benefit Plan or as in effect on the date of this Agreement and (G) any transaction solely between the Company and a Subsidiary of the Company or between Subsidiaries of the Companypermitted under Section 6.01(a);
(ke) propose or adopt any material change to the Company Certificate of Incorporation or Company Bylaws;
(f) acquire (A) by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (B) any assets, including real estate, except (ix) as required pursuant to existing Contracts or any Company Benefit Plan in effect on the date hereof, or acquisitions of assets (iiother than capital expenditures) as effected in the ordinary course of business and consistent with past practice; and (y) the making of capital expenditures (I) in accordance with the Company’s capital expenditures plan set forth in Section 6.01(f) of the Company Disclosure Letter, (AII) adoptin connection with the repair or replacement of facilities destroyed or damaged due to casualty or accident (whether or not covered by insurance) or (III) otherwise, amend in an aggregate amount for all such capital expenditures made pursuant to this clause (III) not to exceed $400,000;
(g) pay, discharge, settle or terminate satisfy any material Company Benefit Planclaims, liabilities, obligations or litigation (B) take any action to accelerate the vesting absolute, accrued, asserted or paymentunasserted, contingent or fund or in any otherwise), other way secure than the payment, of compensation discharge, settlement or benefits under any material Company Benefit Plan or (C) increase the annualized value of compensation and benefits to be provided to Company Employees or any other services providers of the Company or any of its Subsidiaries (other than increases in annualized value of cash compensation satisfaction, in the ordinary course of business consistent with past practice or in an amount that does not exceed 5.0% of such annualized valueaccordance with their terms;
(h) make or rescind any Tax elections that, individually or in the aggregate, immediately could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of the Company or its Subsidiaries, settle or compromise any material income tax liability or, except as required by applicable Law, materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice;
(i) make any material changes in its accounting method, except (A) as required by changes in GAAP (or any interpretation thereof) or Regulation S-X of the SEC, in each case as required by the Company’s independent public accountants, (B) as may be required by a change in applicable Law, (C) as disclosed in the Company SEC Documents filed prior to the date hereofhereof or (D) as required by a Governmental Entity (including the FASB or other similar organization); provided that the Company may make payments to Company Employees who are not “named executive officers” (as defined under Regulation S-K of the Securities Act) in an amount not to exceed $1 million in the aggregate with the individual allocation and terms of such payments subject to the prior consultation with Parent;
(lj) make incur, assume or guarantee any loans indebtedness for borrowed money or advances enter into any “keep well” or other agreement to maintain any current financial condition of another Person or former director, officer, employee or independent contractor enter into any arrangement having the economic effect of any of the Company foregoing (including any capital leases, “synthetic” leases or any of its Subsidiaries;
(m) (i) hire conditional sale or engage any individual who would be a Company Employee or individual independent contractor whose annual base compensation exceeds $200,000 or (ii) terminate the employment of any Company Employee whose annual base compensation exceeds $200,000other title retention agreements), other than for cause;
(nA) other than in the ordinary course of business consistent with past practicepractice (including, settle without limitation, pursuant to the Company Credit Facility or compromise any litigation or releaseother similar facility in lieu thereof), dismiss or otherwise dispose (B) borrowings made to finance capital expenditures and other acquisitions permitted pursuant to clause (vi) above, (C) borrowings made in connection with the refinancing of any claim or arbitration not covered by insurance, other than settlements or compromises of litigation, claims or arbitration that do not, individually or in the aggregate, involve the payment of more than $15 million in excess of the amount reserved indebtedness existing on the latest consolidated balance sheets of the Company in respect of litigation and claimsdate hereof or permitted to be incurred hereunder, as (D) borrowings set forth in the Company SEC Reports, and do not involve (A) any material injunctive or other non-monetary relief on the Company or any of its Subsidiaries or (B) any admission of wrongdoing by the Company or any of its Subsidiaries;
(o) (i) cancel any material indebtedness for borrowed money owed to the Company other than as a result of a repayment of such indebtedness, or (ii) waive or release any claims or right of material value except in the exercise of the Company’s commercially reasonable business judgment;
(p) enter into, materially modify or amend, or terminate any Real Property Lease (it being understood that, without limiting other modifications or amendments that may be material, any modification or amendment reducing the term or fees or other amounts that are payable to the Company or any of its Subsidiaries under any Real Property Lease will be considered a material modification or amendment of such Real Property Lease), except for the renewal, extension or replacement of any Real Property Lease expiring in accordance with its term (such renewal, extension or replacement to be on terms substantially similar to the existing Real Property Lease) or, other than in the ordinary course of business, enter into, materially modify or amend, or terminate any other Specified Contract other than as permitted by this Section 6.1;
(q) make any material change in financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or Law;
(r) adopt a plan of complete or partial liquidation or dissolution of the Company or any of its Subsidiaries;
(s) make, change or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return, or settle or compromise any material Tax liability, audit, claim or assessment, change any material method of accounting for Tax purposes, enter into any Tax allocation, sharing or indemnity agreement (other than customary provisions in agreements or arrangements the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes or file any material Tax Return inconsistent with past practice other than as required by applicable Law;
(t) take any action, or fail to take any action, which action or failure to act would reasonably be expected to cause (i) the Company or any Company Subreit to fail to qualify as a REIT or (ii) any other Affiliate of the Company to fail to preserve its status as set forth on Section 4.16(c6.01(j) of the Company Disclosure Letter, Letter and (E) other borrowings in each case, which failure would have a Material Adverse Effect on the Companyan aggregate amount not to exceed $200,000; or
(uk) authorize, agree or commit to do any of the foregoing. Notwithstanding any of the foregoing or in any other provisions of this Agreement, nothing contained in this Agreement shall prohibit the Company or any of its Subsidiaries from taking or causing to be taken any action, at any time or from time to time, that in the good faith judgment of the Company is reasonably necessary or appropriate for the Company or any of the Company Subreits to maintain its qualification as a REIT; provided that, prior to taking any such action the Company and its Subsidiaries shall inform Parent in writing of such action and shall consult with and cooperate with Parent in good faith to minimize the adverse effect of such action to the Company and Parent.
Appears in 1 contract
Conduct of the Company and its Subsidiaries. Except as (a) Each of the Company and each of the Sellers covenants and agrees that, except (x) set forth in Section 6.1 of the Company Disclosure Letter or as otherwise expressly permitted or required by this Agreement or required or contemplated by (including as described in Section 6.1 of the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary or reasonably desirable to consummate the Plan TransactionsDisclosure Letter), or (y) consented to as otherwise approved in writing by Parent (which consent shall not be unreasonably withheldthe Buyer, conditioned or delayed), from during the period commencing on the date hereof until and ending at the earlier of the Effective Time and termination of this Agreement in accordance with its termsClosing, the Company shallwill, and shall each Seller will cause the Company and its Subsidiaries to, conduct their respective businesses in the ordinary course and in compliance with Law, and use all commercially reasonable efforts to maintain and preserve intact its business organization, including the goodwill of any Governmental Authorities, lenders, suppliers, landlords and other Persons with which it has material business relationships, and to maintain the status of the Company as a REIT and its Subsidiaries in the Ordinary Course of Business in all material respects, in order to preserve for U.S. federal income tax purposes; provided, however, that no action by the Buyer to and after the Closing Date the business of the Company or and its Subsidiaries Subsidiaries. Until the Closing, each of the type specifically addressed in Sections 6.1(aCompany and the Sellers covenants and agrees that except as (1) through 6.1(r) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Except (i) as otherwise expressly permitted or required by Law, this Agreement (ii) including as set forth in Section 6.1 of the Company Disclosure Letter), (iii2) as may be expressly permitted or required by this Agreement Law or required (3) otherwise approved in writing by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary to consummate the Plan Transactions, or (iv) as may be consented to by Parent Buyer (which consent approval shall not be unreasonably withheld, conditioned delayed or delayedconditioned), the Company shall will not, and shall not permit its Subsidiaries to:
(a) adopt any change in the Company Articles or the Company Bylaws;
(b) merge or consolidate the Company or any of its Subsidiaries with any Person, other than the Mergers and other than any mergers or consolidations among Sellers will cause the Company and its Subsidiaries or among not to, take any of the Company’s Subsidiaries;following actions:
(ci) redeemauthorize for issuance, repurchase issue, sell, deliver, grant any options, warrants, calls, subscriptions or defease other rights for, or enter into any Indebtedness other agreement or commitment to issue, sell, deliver or grant, any shares of any class of capital stock of, or other equity interests in, the Company or any Subsidiary of the Company in excess of $75 million (provided that no prepayment penalty would be payable in connection therewith), other than (i) at stated maturity and any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as in effect on the date hereof or as modified with the consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) repayments or prepayments of Indebtedness under the Company Credit Facilities (its Subsidiaries or any Rights or any securities convertible or exchangeable or exercisable into shares of any class of capital stock of, or other revolving credit facility permitted to be incurred pursuant to the terms of this Agreement)equity interests in, (iii) in connection with any replacement, renewal, extension, refinancing, refunding or repayment permitted by Section 6.1(d)(iv) or (iv) any of the foregoing relating to intercompany Indebtedness;
(d) incur, create, assume or otherwise become liable for any Indebtedness, except (i) for any Indebtedness incurred in the ordinary course of business, including mortgages on real property acquired by the Company or any of its Subsidiaries, (ii) for Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries, (iii) for Indebtedness under the Company Credit Facilities (and any other credit facility of the Company hereafter created with term or revolving Indebtedness on terms substantially the same as those governing the existing revolving credit facility as it may have been amended consistent with this clause (d)), (iv) for Indebtedness incurred to replace, renew, extend, refinance, refund or repay any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness, (v) for any guarantees by the Company of Indebtedness of the Company’s Subsidiaries or guarantees by the Company’s Subsidiaries of Indebtedness of the Company or any of its Subsidiaries, and (vi) with respect to any Indebtedness not in accordance with clauses (i) through (v), for any Indebtedness not to exceed $50 million in aggregate principal amount outstanding at the time incurred by the Company or any of its Subsidiaries;
(eii) make incur, assume, guaranty or endorse any acquisition Indebtedness not disclosed in the Company Financial Statements (including by mergerin each case, consolidation determined in accordance with GAAP, applied on a basis consistent with the basis on which the Company Financial Statements were prepared), or acquisition of stock assume, guaranty, endorse or assets) otherwise accommodate any obligations of any other Person (or any division or material amount of assets thereof) or business;
(f) make any capital expenditures, except for (i) capital expenditures up to $25 million in the aggregate (without counting any capital expenditures permitted pursuant to the following clauses (ii) and (iii)), (ii) capital expenditures made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwisePerson, or (iii) capital expenditures required to comply with any applicable Law;
(g) make any loans, advances or capital contributions to, or investments in, any other Person in excess of $25 million (or, with respect to seller-financing of divestitures by the Company or any of its Subsidiaries, $15 million) (without counting any amounts pursuant to the following clauses (i) through (iv)), except for those (i) required or contemplated by existing Contracts, (ii) permitted by Section 6.1(f), (iii) solely between the Company and a Subsidiary of the Company or among Subsidiaries of the Company or (iv) made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise;
(h) pledge or otherwise encumber shares of capital stock or other voting securities of the Company or any of its Subsidiaries, other than Permitted Liens, except in accordance with the incurrence of Indebtedness not prohibited by Section 6.1(d);
(i) (A) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any of the Company Real Property, except for dispositions of the properties set forth in Section 6.1(i) of the Company Disclosure Letter (subject to the limits set forth therein); or (B) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any other properties or non-cash assets with a value in excess of $45 million in the aggregate, except in the case of this clause (B) (x) sales or dispositions made in connection with any transaction among the Company and its Subsidiaries or among the Company’s Subsidiaries or (y) sales or dispositions made in the ordinary course of business;
(j) (i) split, combine or reclassify any Company Securities or amend the terms of any Company Securities, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities other than (A) a dividend or distribution by a Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) any dividend or distribution reasonably necessary for the Company or any of the Company Subreits to maintain its status as a REIT or avoid or reduce the imposition of any entity-level income or excise Tax under the Code or other applicable Law, or (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securities, other than in connection with (A) any redemption or repurchase of the Class A Preferred Stock, (B) the exercise of Company Options, (C) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (D) the acquisition by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (E) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, (F) the issuance of Company Securities to newly hired or promoted employees or newly appointed directors in the ordinary course of business consistent with past practice, or in connection with annual grants to employees and directors made in the ordinary course of business consistent with past practice, or as required to comply with any Company Benefit Plan as in effect on the date of this Agreement and (G) any transaction solely between the Company and a Subsidiary of the Company or between Subsidiaries of the Company;
(k) except (i) as required pursuant to existing Contracts or any Company Benefit Plan in effect on the date hereof, or (ii) as effected in the ordinary course of business and consistent with past practice, (A) adopt, amend or terminate any material Company Benefit Plan, (B) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any material Company Benefit Plan or (C) increase the annualized value of compensation and benefits to be provided to Company Employees or any other services providers of the Company or any of its Subsidiaries (other than increases in annualized value of cash compensation in the ordinary course of business consistent with past practice in an amount that does not exceed 5.0% of such annualized value, in the aggregate, immediately prior to the date hereof); provided that the Company may make payments to Company Employees who are not “named executive officers” (as defined under Regulation S-K of the Securities Act) in an amount not to exceed $1 million in the aggregate with the individual allocation and terms of such payments subject to the prior consultation with Parent;
(l) make any loans or advances to any current other Person, or former director, officer, employee otherwise commit to any similar financial transaction;
(iii) cancel any material Indebtedness or independent contractor waive any material claims or rights of the Company or any of its Subsidiaries;
(miv) (iA) hire subject any Owned Real Property or engage any individual who would be a other material properties or assets of the Company Employee or individual independent contractor whose annual base compensation exceeds $200,000 or (ii) terminate the employment of its Subsidiaries to any Company Employee whose annual base compensation exceeds $200,000Lien, other than for causePermitted Liens, or (B) discharge or satisfy any material Lien or pay any material Liability, other than current Liabilities paid in the Ordinary Course of Business;
(nv) declare, set aside or make any payment or distribution of cash or other property with respect to the capital stock or other equity interests in the Company or any of its Subsidiaries (other than dividends or distributions by Longview Timberlands LLC or Longview Timber, Corp. to Timber LLC), or purchase, redeem or otherwise acquire any shares of capital stock or other equity interests in the ordinary course Company or any of business consistent with past practiceits Subsidiaries (including any Right to acquire such capital stock or other equity interests);
(vi) (A) sell, settle or compromise any litigation or releaseassign, dismiss transfer, lease, license, abandon or otherwise dispose of any claim Owned Real Property or arbitration not covered by insurance(B) sell, assign, transfer, lease, license, abandon or otherwise dispose of any other tangible assets involving more than two million dollars ($2,000,000) individually or five million dollars ($5,000,000) in the aggregate (other than settlements sales of inventory or compromises obsolete or worn out assets in the Ordinary Course of litigationBusiness);
(vii) enter into any contract, claims agreement, transaction or arbitration arrangement that do notprovides for the sale, individually purchase or leasing of logs, timber, third-party timber cutting rights, minerals or mineral rights having a value in excess of two million dollars ($2,000,000) in the aggregate;
(viii) take or fail to take any action that would cause the timber harvest operations of the Company and its Subsidiaries to deviate in any material respect from the harvest plan set forth in Section 6.1(a)(viii) of the Disclosure Letter;
(ix) take or fail to take any action that would result in any material loss, involve the payment failure to maintain or abandonment of more than $15 million any Company Intellectual Property, or license, assign, sell, transfer, abandon or otherwise dispose of any Company Intellectual Property;
(x) make or incur any capital expenditure, or make commitments for capital expenditures, in excess of two million dollars ($2,000,000) individually or five million dollars ($5,000,000) in the amount reserved on aggregate;
(xi) directly or indirectly acquire, or enter into any acquisition or agreement to acquire by merger, consolidation or otherwise, or agreement to acquire a substantial portion of the latest consolidated balance sheets assets of, or in any other manner, any business of any other Person, make any investment in any other Person, form any Subsidiary or enter into any new line of business;
(xii) make any change in its cash management practices or in any method of accounting or accounting policies, change its fiscal year, make any write-down in the value of its inventory that is material or outside the Ordinary Course of Business, or make any write-off of any accounts receivables that is material or outside the Ordinary Course of Business;
(xiii) amend the Company Charter or the bylaws of the Company in respect or the charter documents of litigation and claims, as set forth any of its Subsidiaries;
(xiv) except in the Company SEC ReportsOrdinary Course of Business, and do not involve implement any employee layoffs;
(Axv) enter into any material injunctive settlement, conciliation, co-existence or similar contract or agreement or any other non-monetary relief on contract or agreement, in each case, that contains a covenant not to compete applicable to the Company or any of its Subsidiaries or that restricts the rights of the Company or any of its Subsidiaries to freely engage in any line of business anywhere in the world, or that restricts the use by the Company or any of its Subsidiaries of any Company Intellectual Property;
(Bxvi) except as required pursuant to the terms of any Company Plan or other written agreement in effect as of the date hereof and listed in the Disclosure Letter or as necessary to comply with Section 409A of the Code, (1) grant any current or former employee, director or consultant of the Company or any of its Subsidiaries (a “Participant”) any increase in compensation, bonus or fringe or other benefits, (2) grant any Participant any increase in change in control, retention, severance or termination pay, (3) establish, adopt, enter into, terminate, modify or amend any Company Plan, (4) materially change any actuarial or other assumption used to calculate funding obligations with respect to any Company Plan or change the manner in which contributions to any Company Plan are made or the basis on which such contributions are determined or (5) take any action to accelerate the vesting or payment of any compensation or benefit under any Company Plan or awards made thereunder;
(xvii) enter into any employment, consulting, change in control, retention, severance or termination agreement with any Participant, hire any employee with an expected annual compensation in excess of seventy-five thousand dollars ($75,000) or terminate any employee other than for cause (as determined by the Company in its reasonable discretion and in accordance with Law);
(xviii) withdraw any funds from, or change its rate of contribution to, any Company Plan;
(xix) modify or amend in any material respect or terminate any Material Contract or any Real Property Lease, or waive, release or assign any material rights or claims thereunder;
(xx) (A) settle, compromise, discharge or agree to settle any Action, other than any settlement that (1) does not involve the payment of monetary damages in excess of five hundred thousand dollars ($500,000), (2) does not involve any material injunctive relief or impose any material restrictions on the business or operations of the Company and its Subsidiaries, (3) does not provide for any admission of wrongdoing culpability by the Company or any of its Subsidiaries, and (4) provides for or otherwise results in a customary release of the Company and its Subsidiaries from all claims or (B) commence any Action that relates to or involves an amount in excess of five hundred thousand dollars ($500,000) or seeks any material injunctive relief;
(o) (i) cancel any material indebtedness for borrowed money owed to the Company other than as a result of a repayment of such indebtedness, or (ii) waive or release any claims or right of material value except in the exercise of the Company’s commercially reasonable business judgment;
(p) enter into, materially modify or amend, or terminate any Real Property Lease (it being understood that, without limiting other modifications or amendments that may be material, any modification or amendment reducing the term or fees or other amounts that are payable to the Company or any of its Subsidiaries under any Real Property Lease will be considered a material modification or amendment of such Real Property Lease), except for the renewal, extension or replacement of any Real Property Lease expiring in accordance with its term (such renewal, extension or replacement to be on terms substantially similar to the existing Real Property Lease) or, other than in the ordinary course of business, enter into, materially modify or amend, or terminate any other Specified Contract other than as permitted by this Section 6.1;
(q) make any material change in financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or Law;
(r) adopt a plan of complete or partial liquidation or dissolution of the Company or any of its Subsidiaries;
(sxxi) make, change or revoke any material Tax election or adopt or change a material any method of Tax accounting, amend enter into any material Tax Return“closing agreement” as described in Section 7121 of the Code (or any comparable or similar provisions of applicable Law), or settle or compromise any material Tax liabilityLiability with respect to Taxes, audit, claim or assessment, change any material method of accounting for Tax purposes, enter into any Tax allocation, sharing or indemnity agreement (other than customary provisions in agreements or arrangements the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes or file any material amended Tax Return, file any Tax Return inconsistent with past practice prior years and historic practices of the Company (other than as required by Law), or consent to any extension or waiver of the limitations period applicable Lawto any claim or assessment with respect to Taxes;
(txxii) take pay, loan or advance any actionamount to, or fail to take sell, transfer or lease any actionassets to, which action or failure to act would reasonably be expected to cause (i) enter into any agreement, contract, transaction or arrangement with, the Company Sellers or any Company Subreit to fail to qualify as a REIT or (ii) any of their Affiliates, other Affiliate of the Company to fail to preserve than transactions solely among Timber LLC and its status as set forth on Section 4.16(c) of the Company Disclosure Letter, in each case, which failure would have a Material Adverse Effect on the CompanySubsidiaries; or
(uxxiii) authorize, agree or commit or agree, whether in writing or otherwise, to do any of the foregoing. Notwithstanding any of .
(b) Until the foregoing or in any other provisions of this AgreementClosing, nothing contained in this Agreement shall prohibit the Company or any of its Subsidiaries from taking or causing to be taken any action, at any time or from time to time, that in the good faith judgment each of the Company is reasonably necessary or appropriate for and the Sellers covenants and agrees that the Company or any of will, and the Company Subreits to maintain its qualification as a REIT; provided that, prior to taking any such action Sellers will cause the Company and its Subsidiaries shall inform Parent to:
(i) maintain all insurance policies set forth in writing Section 3.14(a) of such action the Disclosure Letter in full force and shall consult effect in accordance with their terms, or obtain and cooperate maintain in full force and effect suitable replacements therefor with Parent in good faith coverages and containing terms and conditions (including with respect to minimize the adverse effect of such action deductible amount) that are no less favorable to the Company and Parentits Subsidiaries as the policies set forth in Section 3.14(a) of the Disclosure Letter; and
(ii) (A) maintain the assets (excluding standing timber and down timber, trees and mineral interests) of the Company and its Subsidiaries in the Ordinary Course of Business in good operating condition and repair (subject to normal wear and tear) and (B) maintain standing timber and down timber, trees and mineral interest assets of the Company and its Subsidiaries in the Ordinary Course of Business and consistent with customary industry practices.
Appears in 1 contract
Conduct of the Company and its Subsidiaries. Except as (xa) set forth in Section 6.1 of the Company Disclosure Letter or as otherwise expressly permitted or required by this Agreement or required or contemplated by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary or reasonably desirable to consummate the Plan Transactions, or (y) consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from From the date hereof until the earlier of the Effective Time and or the termination of this Agreement in accordance with its terms, the Company shallexcept as contemplated hereby, and shall cause its Subsidiaries to, conduct their respective businesses in the ordinary course and in compliance with Law, and use all commercially reasonable efforts to maintain and preserve intact its business organization, including the goodwill of any Governmental Authorities, lenders, suppliers, landlords and other Persons with which it has material business relationships, and to maintain the status of the Company as a REIT for U.S. federal income tax purposes; provided, however, that no action by the Company or its Subsidiaries of the type specifically addressed in Sections 6.1(a) through 6.1(r) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Except (i) as required by Law, (ii) as set forth in on Section 6.1 of the Company Disclosure LetterSchedule, (iii) as may be expressly permitted or required by this Agreement Applicable Law or required by to the Alternative Plan Sponsor Agreement, the Bankruptcy Case or extent that Parent shall otherwise as necessary consent to consummate the Plan Transactions, or (iv) as may be consented to by Parent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall notwill and will cause its Subsidiaries to use their respective commercially reasonable efforts to, and shall not permit its Subsidiaries to:
(a) adopt any change in the Company Articles or the Company Bylaws;
(b) merge or consolidate the Company or any of its Subsidiaries with any Person, other than the Mergers and other than any mergers or consolidations among Shareholders will cause the Company and its Subsidiaries to use their commercially reasonable efforts to, (i) operate, invest in and conduct its business in all material respects in the ordinary course consistent with past practice; (ii) continue, in a manner consistent with the past practice, to (A) keep available the services of its respective officers, (B) pay accounts payable and collect accounts receivable, (C) comply in all material respects with Applicable Law and Permits, (D) maintain with financially responsible insurance companies insurance in such amounts and against such risks and losses as are customary for comparable companies engaged in its business, (E) maintain and preserve intact its business in all material respects, and (F) maintain in all material respects the ordinary and customary relationships of its business with its suppliers, customers, subcontractors, licensees, licensors, consultants and others having business relationships with the Company and its Subsidiaries; and (iii) prevent a material breach of any representations or among the Company’s Subsidiaries;
(c) redeem, repurchase or defease any Indebtedness warranty of the Company set forth herein.
(b) Without limiting the generality of Section 6.1(a), from the date hereof until the earlier of the Effective Time or any Subsidiary the termination of this Agreement in accordance with its terms, except as contemplated hereby, as set forth on Section 6.1 of the Company Schedule, as required by Applicable Law or to the extent that Parent shall otherwise consent to in excess of $75 million (provided that no prepayment penalty would be payable in connection therewith), other than (i) at stated maturity and any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as in effect on the date hereof or as modified with the consent of Parent writing (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) repayments or prepayments of Indebtedness under the Company Credit Facilities (or any other revolving credit facility permitted to be incurred pursuant to the terms of this Agreement)will not, (iii) in connection with any replacementand will cause its Subsidiaries not to, renewal, extension, refinancing, refunding or repayment permitted by Section 6.1(d)(iv) or (iv) any of the foregoing relating to intercompany Indebtedness;
(d) incur, create, assume or otherwise become liable for any Indebtedness, except (i) for any Indebtedness incurred in the ordinary course of business, including mortgages on real property acquired by the Company or any of its Subsidiaries, (ii) for Indebtedness among and Shareholders will cause the Company and its Subsidiaries or among the Company’s Subsidiaries, (iii) for Indebtedness under the Company Credit Facilities (and any other credit facility of the Company hereafter created with term or revolving Indebtedness on terms substantially the same as those governing the existing revolving credit facility as it may have been amended consistent with this clause (d)), (iv) for Indebtedness incurred to replace, renew, extend, refinance, refund or repay any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness, (v) for any guarantees by the Company of Indebtedness of the Company’s Subsidiaries or guarantees by the Company’s Subsidiaries of Indebtedness of the Company or any of its Subsidiaries, and (vi) with respect to any Indebtedness not in accordance with clauses (i) through (v), for any Indebtedness not to exceed $50 million in aggregate principal amount outstanding at the time incurred by the Company or any of its Subsidiaries;
(e) make any acquisition (including by merger, consolidation or acquisition of stock or assets) of any other Person (or any division or material amount of assets thereof) or business;
(f) make any capital expenditures, except for (i) capital expenditures up to $25 million in the aggregate (without counting any capital expenditures permitted pursuant to the following clauses (ii) and (iii)), (ii) capital expenditures made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise, or (iii) capital expenditures required to comply with any applicable Law;
(g) make any loans, advances or capital contributions to, or investments in, any other Person in excess of $25 million (or, with respect to seller-financing of divestitures by the Company or any of its Subsidiaries, $15 million) (without counting any amounts pursuant to the following clauses (i) through (iv)), except for those (i) required or contemplated by existing Contracts, (ii) permitted by Section 6.1(f), (iii) solely between the Company and a Subsidiary of the Company or among Subsidiaries of the Company or (iv) made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise;
(h) pledge or otherwise encumber shares of capital stock or other voting securities of the Company or any of its Subsidiaries, other than Permitted Liens, except in accordance with the incurrence of Indebtedness not prohibited by Section 6.1(d);:
(i) (A) sellissue, lease (except for deliver or sell or authorize or propose the exercise issuance, delivery or sale of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any of the Company Real Property, except for dispositions of the properties set forth in Section 6.1(i) of the Company Disclosure Letter (subject to the limits set forth therein); or (B) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any other properties or non-cash assets with a value in excess of $45 million in the aggregate, except in the case of this clause (B) (x) sales or dispositions made in connection with any transaction among the Company and its Subsidiaries or among the Company’s Subsidiaries or (y) sales or dispositions made in the ordinary course of businessEquity Interests;
(jii) (i) except as contemplated by Section 6.20, split, combine combine, repurchase or reclassify any Company Securities or amend the terms of any Company SecuritiesEquity Interests, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock shares or property or any combination thereof) in respect of Company Securities any Equity Interests (other than the payment of any dividend by a wholly-owned Subsidiary), or make any other actual, constructive or deemed distribution in respect of any Equity Interests;
(iii) except as contemplated by Section 6.20, (A) a dividend incur, assume or distribution otherwise become liable for any Debt (including by a Subsidiary way of guarantee or the Company issuance and sale of Debt securities or rights to the Company or another Subsidiary of the Company acquire Debt securities) or (B) enter into or modify any dividend or distribution reasonably necessary for Contract with respect to the Company or any of foregoing (other than consents to the Company Subreits to maintain its status as a REIT or avoid or reduce the imposition of any entity-level income or excise Tax under the Code or other applicable Law, or (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securitiestransactions contemplated by this Agreement), other than in connection with (A) any redemption or repurchase of the Class A Preferred Stock, (B) the exercise of Company Options, (C) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (D) the acquisition by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (E) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, (F) the issuance of Company Securities to newly hired or promoted employees or newly appointed directors each such case in the ordinary course of business consistent with past practice, practices;
(iv) incur or in connection with annual grants commit to employees and directors made in any material capital expenditures outside of the ordinary course of business consistent with past practicepractices (excluding, or as required to comply for the avoidance of doubt, any expenditures in connection with any Company Benefit Plan as in effect on the date of this Agreement and (G) any transaction solely between the Company and a Subsidiary of the Company or between Subsidiaries of the Company’s performance of services for any third-party);
(kv) except (i) as required pursuant cancel, compromise, release or assign any material Liability owed to existing Contracts it or any Company Benefit Plan in effect on the date hereofmaterial claims held by it, or (ii) as effected in the ordinary course of business and consistent with past practice, (A) adopt, amend or terminate any material Company Benefit Plan, (B) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any material Company Benefit Plan or (C) increase the annualized value of compensation and benefits to be provided to Company Employees or any other services providers of the Company or any of its Subsidiaries (other than increases in annualized value of cash compensation in the ordinary course of business consistent with past practice in an amount that does not exceed 5.0% of such annualized value, in the aggregate, immediately prior to the date hereof); provided that the Company may make payments to Company Employees who are not “named executive officers” (as defined under Regulation S-K of the Securities Act) in an amount not to exceed $1 million in the aggregate with the individual allocation and terms of such payments subject to the prior consultation with Parent;
(l) make any loans or advances to any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries;
(m) (i) hire or engage any individual who would be a Company Employee or individual independent contractor whose annual base compensation exceeds $200,000 or (ii) terminate the employment of any Company Employee whose annual base compensation exceeds $200,000, other than for cause;
(n) other than in the ordinary course of business consistent with past practice;
(vi) enter into or accelerate, settle terminate, modify, renew or compromise cancel any litigation Company Material Contract other than (in the case of a Material Contract of the kind described in clause (i), (ii), (iii), (v), (vii) or release(xi) of the definition thereof set forth in Section 10.1) in the ordinary course of business consistent with past practice;
(vii) sell, dismiss lease, transfer, license, mortgage, pledge or otherwise dispose of or encumber, except for any claim Permitted Liens, or arbitration grant any option to do any of the foregoing, any of its material properties or assets (other than the sale of assets or grant of such options in the ordinary course of business consistent with past practice); provided, however, that the Company may transfer the Distributable Property prior to the Closing Date provided that it does not covered incur any material liabilities in connection therewith;
(viii) acquire or agree to acquire by insurancemerging or consolidating with, or acquire or agree to acquire by purchasing a substantial portion of the Equity Securities or assets of, or in any other manner, any business or Person (other than acquisitions of assets with a value not greater than $5,000,000 in the aggregate);
(ix) implement any layoffs that could implicate the WARN Act;
(x) wind-up, liquidate or dissolve, adopt a plan of complete or partial wind-up, liquidation or dissolution or resolutions providing for or authorizing such wind-up, liquidation or dissolution;
(xi) enter into, consummate, or adopt resolutions providing for or authorizing, any merger, consolidation, restructuring, recapitalization or other reorganization, other than settlements the transactions contemplated herein;
(xii) amend its certificate of incorporation or compromises bylaws or other comparable organizational documents;
(xiii) modify or amend any right of litigation, claims or arbitration that do not, individually or in the aggregate, involve the payment any holder of more than $15 million in excess of the amount reserved on the latest consolidated balance sheets outstanding Equity Interests of the Company in respect of litigation and claims, as set forth in the Company SEC Reports, and do not involve (A) any material injunctive or other non-monetary relief on the Company or any of its Subsidiaries or (B) any admission of wrongdoing by the Company or any of its Subsidiaries;
(oxiv) change its auditor or materially change its methods of accounting in effect as of the date hereof except as required by changes in GAAP or Applicable Law or by a Governmental Entity;
(ixv) cancel make, change, or rescind any material indebtedness Tax election, change any accounting period, adopt or change any accounting method for borrowed money owed Tax purposes, file any amended Tax Return, enter into any closing agreement, settle or compromise any Tax claim or assessment relating to any of the Company or its Subsidiaries, surrender any right to claim a refund of Taxes, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to any of the Company or its Subsidiaries, or take any other similar action relating to the filing of any Tax Return or the payment of any Tax, if, in all cases, such election, adoption, change, amendment, agreement, settlement, surrender, consent or other action would have the effect of increasing the Tax liability of any of the Company other than as or its Subsidiaries for any period ending after the Closing Date or decreasing any Tax attribute of any of the Company or its Subsidiaries existing on the Closing Date by a material amount;
(xvi) take any action or make or revoke any election that would result of a repayment of such indebtedness, or (ii) waive or release any claims or right of material value except in the exercise termination of the Company’s commercially reasonable business judgmentstatus as a validly electing S corporation within the meaning of Section 1361 and 1362 of the Code;
(pxvii) enter into, materially modify (A) settle or amend, or terminate compromise any Real Property Lease (Legal Proceeding on terms which require it being understood that, without limiting other modifications or amendments that may be material, any modification or amendment reducing the term or fees or other amounts that are payable to the Company or any of its Subsidiaries under to pay, incur or assume any Real Property Lease will be considered a material modification Liability in excess of $5,000,000;
(xviii) (A) enter into, amend, modify or amendment renew any Contract regarding employment, consulting, severance or similar arrangements with any of such Real Property Leaseits directors, officers, employees or consultants, or grant any salary, wage or other increase in compensation or increase any employee benefit (including incentive, profit sharing or bonus payments), other than, in the case of employees or consultants, in the ordinary course of business consistent with past practice; (B) grant any severance or termination pay or benefit to any directors, officers, officers, employees or consultants except for pursuant to written agreements or severance policies in effect of the renewaldate hereof and disclosed in the applicable Company Schedules, extension other than, in the case of employees or replacement of any Real Property Lease expiring in accordance with its term (such renewal, extension or replacement to be on terms substantially similar to the existing Real Property Lease) orconsultants, other than in the ordinary course of business, enter into, business consistent with past practice not related to the transactions contemplated hereby; or (C) adopt or amend any Company Employee Plan except to the extent required by Applicable Law or to the extent the adoption or amendment of such Company Employment Plan does not materially modify or amend, or terminate any other Specified Contract other than as permitted by this Section 6.1increase the aggregate cost of the Company’s Employee Plans;
(qxix) make any material change except as disclosed in financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or Law;
(r) adopt a plan of complete or partial liquidation or dissolution of the Company Schedule, enter into or modify any transaction or arrangement with, or for the benefit of any of its Affiliates or any of its Subsidiaries;
(s) makeor their directors, change former directors, officers or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return, or settle or compromise any material Tax liability, audit, claim or assessment, change any material method of accounting for Tax purposes, enter into any Tax allocation, sharing or indemnity agreement (other than customary provisions in agreements or arrangements the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes or file any material Tax Return inconsistent with past practice other than as required by applicable Law;
(t) take any action, or fail to take any action, which action or failure to act would reasonably be expected to cause (i) the Company or any Company Subreit to fail to qualify as a REIT or (ii) any other Affiliate of the Company to fail to preserve its status as set forth on Section 4.16(c) of the Company Disclosure Letter, in each case, which failure would have a Material Adverse Effect on the Companyshareholders; or
(uxx) authorize, agree in writing or commit otherwise to do any of the foregoing. Notwithstanding take any of the foregoing or in any other provisions of this Agreement, nothing contained in this Agreement shall prohibit the Company or any of its Subsidiaries from taking or causing to be taken any action, at any time or from time to time, that in the good faith judgment of the Company is reasonably necessary or appropriate for the Company or any of the Company Subreits to maintain its qualification as a REIT; provided that, prior to taking any such action the Company and its Subsidiaries shall inform Parent in writing of such action and shall consult with and cooperate with Parent in good faith to minimize the adverse effect of such action to the Company and Parentactions.
Appears in 1 contract
Samples: Merger Agreement (Perini Corp)
Conduct of the Company and its Subsidiaries. Except as (x) set forth in Section 6.1 of the Company Disclosure Letter or as otherwise expressly permitted or required by this Agreement or required or contemplated by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary or reasonably desirable to consummate the Plan Transactions, or (y) consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from the date hereof until the earlier of the Effective Time and termination of this Agreement in accordance with its terms, the Company shall, and shall cause its Subsidiaries to, and shall use its reasonable best efforts to cause its Significant Joint Ventures to, conduct their respective businesses and operate the Company Facilities in the ordinary course and in compliance with Law, and use all commercially reasonable efforts to maintain and preserve intact its business organization, including the goodwill of any Governmental Authorities, lenders, suppliers, landlords landlords, Joint Venture partners and other Persons with which it has material business relationships, and to maintain the status of the Company as a REIT for U.S. federal income tax purposes; provided, however, that no action by the Company or its Subsidiaries or its Significant Joint Ventures of the type specifically addressed in Sections 6.1(a) through 6.1(r) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Except (i) as required by Law, (ii) as set forth in Section 6.1 of the Company Disclosure Letter, (iii) as may be expressly permitted or required by this Agreement or and, in the case of the Significant Joint Ventures, required by the Alternative Plan Sponsor terms of the applicable Joint Venture Agreement, (iv) pursuant to the Bankruptcy Case Company Reorganization, the Management Business Sale, the Management Business Distribution or otherwise as necessary to consummate the Plan Transactions, Distribution or (ivv) as may be consented to by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit its Subsidiaries or Significant Joint Ventures to:
(a) adopt any change in the Company Articles Certificate of Incorporation or the Company Bylaws;
(b) merge or consolidate the Company or any of its Subsidiaries or Significant Joint Ventures with any Person, other than the Mergers and other than any mergers or consolidations among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(c) redeem, repurchase or defease any Indebtedness of the Company or any Subsidiary of the Company or any Significant Joint Venture in excess of $75 25 million (provided that no prepayment penalty would be payable in connection therewith), other than (i) at stated maturity and any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as in effect on the date hereof or as modified with the consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) repayments or prepayments of Indebtedness under the Company Credit Facilities (or any other revolving credit facility permitted to be incurred pursuant to the terms of this Agreement), (iii) in connection with any replacement, renewal, extension, refinancing, refunding or repayment permitted by Section 6.1(d)(iv) or (ivii) any of the foregoing relating to intercompany Indebtedness;
(d) incur, create, assume or otherwise become liable for any Indebtedness, except (i) for any Indebtedness incurred in the ordinary course of business, including mortgages on real property acquired by the Company or any of its SubsidiariesSubsidiaries or Significant Joint Ventures, (ii) for Indebtedness among the Company and its Subsidiaries and Significant Joint Ventures or among the Company’s SubsidiariesSubsidiaries or Significant Joint Ventures, (iii) for Indebtedness under the Company Credit Facilities Company’s existing revolving credit facility (and any other credit facility of the Company hereafter created with term or revolving Indebtedness on terms substantially the same as those governing the Company’s existing revolving credit facility as it may have been amended consistent with this clause (d)), (iv) for Indebtedness incurred to replace, renew, extend, refinance, refund or repay any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness, (v) for any guarantees by the Company of Indebtedness of the Company’s Subsidiaries or Significant Joint Ventures or guarantees by the Company’s Subsidiaries or Significant Joint Ventures of Indebtedness of the Company or any of its SubsidiariesSubsidiaries or Significant Joint Ventures, and (vi) with respect to any Indebtedness not in accordance with clauses (i) through (v), for any Indebtedness not to exceed $50 25 million in aggregate principal amount outstanding at the time incurred by the Company or any of its SubsidiariesSubsidiaries or Significant Joint Ventures;
(e) (i) make any acquisition (including by merger, consolidation or acquisition of stock or assets) of any other Person (or any division or material amount of assets thereof) or businessbusiness or (ii) purchase any interest in any Joint Venture other than to the extent required by the terms of the applicable Joint Venture Agreement as in effect on the date hereof;
(f) make any capital expenditures, except for (i) capital expenditures up to $25 million not exceeding 110% of the amount budgeted therefor in the aggregate Company’s 2012 budget, in the form made available to Parent prior to the date hereof, (without counting any ii) capital expenditures permitted in 2013 not exceeding 110% of the aggregate amount of capital expenditures contemplated by the Company’s 2012 budget, (iii) capital expenditures required to honor obligations to the Company’s Joint Ventures or pursuant to the following clauses (ii) and (iii))budgets of the Joint Ventures, (iiiv) capital expenditures made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise, or (iiiv) capital expenditures required to comply with any applicable Law;
(g) make any loans, advances or capital contributions to, or investments in, any other Person in excess of $25 million (or, with respect to seller-financing of divestitures by the Company or any of its Subsidiaries, $15 5 million) (without counting any amounts pursuant to the following clauses (i) through (iv)), except for those (i) required or contemplated by existing Contracts, (ii) required to honor obligations to the Company’s Joint Ventures existing as of the date hereof or pursuant to the budgets of the Joint Ventures, and any obligations to the Joint Ventures in 2013 as reasonably agreed with Company’s Joint Venture partners, (iii) permitted by Section 6.1(e) or 6.1(f), (iiiiv) solely between the Company and a Subsidiary of the Company or among Subsidiaries of the Company or (ivv) made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise;
(h) pledge or otherwise encumber shares of capital stock or other voting securities of the Company or any of its SubsidiariesSubsidiaries or Significant Joint Ventures, other than Permitted Liens, except in accordance with the incurrence of Indebtedness not prohibited by Section 6.1(d);
(i) (A) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any of the Company Real Property, except for dispositions of the properties set forth in Section 6.1(i) of the Company Disclosure Letter (subject to Letter, except on the limits terms set forth therein)in Section 6.1(i) of the Company Disclosure Letter; or (Bii) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any other properties or non-cash assets with a value in excess of $45 20 million in the aggregate, except in the case of this clause (Bii) (x) sales or dispositions made in connection with any transaction among the Company and its Subsidiaries and Significant Joint Ventures or among the Company’s Subsidiaries or (y) sales or dispositions made in the ordinary course of business;
(j) (i) split, combine or reclassify any Company Securities or amend the terms of any Company Securities, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities other than (A) a dividend or distribution by a Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) any dividend or distribution reasonably necessary for the Company or any of the Company Subreits to maintain its status as a REIT or avoid or reduce the imposition of any entity-level income or excise Tax under the Code or other applicable Law, Joint Venture or (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securities, other than in connection with (A) any the exercise, conversion, redemption or repurchase of the Class A Preferred StockCompany Convertible Notes, (B) the exercise of Company Options, (C) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (D) the acquisition by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (E) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, (F) the issuance of Company Securities to newly hired or promoted employees or newly appointed directors in the ordinary course of business consistent with past practice, or in connection with annual grants to employees and directors made in the ordinary course of business consistent with past practice, or as required to comply with any Company Benefit Plan as in effect on the date of this Agreement and (G) any transaction solely between the Company and a Subsidiary of the Company or between Subsidiaries of the Company;
(k) except (i) as required pursuant to existing Contracts or any Company Benefit Plan in effect on the date hereof, or (ii) as effected in the ordinary course of business and consistent with past practicepractice or (iii) as required by Law (including to avoid the imposition of penalty or other taxes under Section 409A of the Code), (A) adopt, amend or terminate any material Company Benefit Plan, (B) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any material Company Benefit Plan or (C) increase the annualized value of compensation and benefits to be provided to Company Employees or any other services providers of the Company or any of its Subsidiaries (other than increases in annualized value of cash compensation in the ordinary course of business consistent with past practice in an amount that does not exceed 5.05.0 % of such annualized value, in the aggregate, immediately prior to the date hereof); provided that the Company may make payments to Company Employees who are not “named executive officers” (as defined under Regulation S-K of the Securities Act) in an amount not to exceed $1 million in the aggregate with the individual allocation and terms of such payments subject to the prior consultation with Parent;
(l) make any loans or advances to any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries;
(m) (i) hire or engage any individual who would be a Company Employee or individual independent contractor whose annual base compensation exceeds $200,000 or (ii) terminate the employment of any Company Employee whose annual base compensation exceeds $200,000, other than for cause;
(n) other than in the ordinary course of business consistent with past practice, settle or compromise any litigation or release, dismiss or otherwise dispose of any claim or arbitration not covered by insurance, other than settlements or compromises of litigation, claims or arbitration that do not, individually or in the aggregate, involve the payment of more than $15 5 million in excess of the amount reserved on the latest consolidated balance sheets of the Company in respect of litigation and claims, as set forth in the Company SEC Reports, and do not involve (A) any material injunctive or other non-monetary relief on the Company or Company, any of its Subsidiaries or (B) any admission of wrongdoing by the Company or any of its SubsidiariesManagement Business;
(om) (i) cancel any material indebtedness for borrowed money owed to the Company other than as a result of a repayment of such indebtedness, or (ii) waive or release any claims or right of material value except in the exercise of the Company’s commercially reasonable business judgment;
(pn) enter into, materially modify or amend, or terminate any Joint Venture Agreement or any Management Agreement or Real Property Lease (it being understood that, without limiting other modifications or amendments that may be material, any modification or amendment reducing the term or fees or other amounts that are payable to the Company or any of its Subsidiaries under any Management Agreement or Real Property Lease will be considered a material modification or amendment of such Management Agreement or Real Property Lease), except for the renewal, extension or replacement of any Management Agreement or Real Property Lease expiring in accordance with its term (such renewal, extension or replacement to be on terms substantially similar to the existing Management Agreement or Real Property Lease) or, other than in the ordinary course of business, enter into, materially modify or amend, or terminate any other Specified Contract other than as permitted by this Section 6.1;
(qo) make any material change in financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or Law;
(rp) adopt a plan of complete or partial liquidation or dissolution of the Company or any of its Subsidiaries;
(sq) make, change or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return, or settle or compromise any material Tax liability, audit, claim or assessment, change any material method of accounting for Tax purposes, enter into any Tax allocation, sharing or indemnity agreement (other than customary provisions in agreements or arrangements the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes or prepare and file any material Tax Return in a manner that is inconsistent with past practice other than as required by applicable Law;
(t) or, on any such Tax Return, take any actionposition, make any election or fail to take adopt any actionmethod that is inconsistent with positions taken, which action elections made or failure to act would reasonably be expected to cause (i) the Company methods used in preparing or any Company Subreit to fail to qualify as a REIT or (ii) any other Affiliate of the Company to fail to preserve its status as set forth on Section 4.16(c) of the Company Disclosure Letterfiling similar Tax Returns in prior periods, in each case, which failure if such action would have increase by a Material Adverse Effect on material amount the CompanyTax liability of the Company and its Subsidiaries; or
or (ur) authorize, agree or commit to do any of the foregoing. Notwithstanding any of the foregoing or in any other provisions of this Agreement, nothing contained in this Agreement shall prohibit the Company or any of its Subsidiaries from taking or causing to be taken any action, at any time or from time to time, that in the good faith judgment of the Company is reasonably necessary or appropriate for the Company or any of the Company Subreits to maintain its qualification as a REIT; provided that, prior to taking any such action the Company and its Subsidiaries shall inform Parent in writing of such action and shall consult with and cooperate with Parent in good faith to minimize the adverse effect of such action to the Company and Parent.
Appears in 1 contract
Conduct of the Company and its Subsidiaries. Except as (x) set forth in Section 6.1 of the Company Disclosure Letter or as otherwise expressly permitted or required by this Agreement or required or contemplated by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary or reasonably desirable to consummate the Plan Transactions, or (y) consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from From the date hereof until the earlier of the Effective Time and termination of this Agreement in accordance with its termsthrough the Closing, the Company shall, and shall cause its Subsidiaries to, conduct its and their respective businesses in the ordinary course and in compliance with Law, and use all commercially reasonable efforts to maintain and preserve intact its business organization, including the goodwill of any Governmental Authorities, lenders, suppliers, landlords and other Persons with which it has material business relationships, and to maintain the status of the Company as a REIT for U.S. federal income tax purposes; provided, however, that no action by the Company or its Subsidiaries of the type specifically addressed in Sections 6.1(a) through 6.1(r) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Except (i) as required by Law, (ii) as set forth in Section 6.1 of the Company Disclosure Letter, (iii) as may be expressly permitted or required by this Agreement or required by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary to consummate the Plan Transactions, or (iv) as may be consented to by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit its Subsidiaries to:
(a) adopt any change in the Company Articles or the Company Bylaws;
(b) merge or consolidate the Company or any of its Subsidiaries with any Person, other than the Mergers and other than any mergers or consolidations among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(c) redeem, repurchase or defease any Indebtedness of the Company or any Subsidiary of the Company in excess of $75 million (provided that no prepayment penalty would be payable in connection therewith), other than (i) at stated maturity and any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as in effect on the date hereof or as modified with the consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) repayments or prepayments of Indebtedness under the Company Credit Facilities (or any other revolving credit facility permitted to be incurred pursuant to the terms of this Agreement), (iii) in connection with any replacement, renewal, extension, refinancing, refunding or repayment permitted by Section 6.1(d)(iv) or (iv) any of the foregoing relating to intercompany Indebtedness;
(d) incur, create, assume or otherwise become liable for any Indebtedness, except (i) for any Indebtedness incurred in the ordinary course of business, including mortgages on real property acquired by the Company or any of its Subsidiaries, (ii) for Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries, (iii) for Indebtedness under the Company Credit Facilities (and any other credit facility of the Company hereafter created with term or revolving Indebtedness on terms substantially the same as those governing the existing revolving credit facility as it may have been amended consistent with this clause (d)), (iv) for Indebtedness incurred to replace, renew, extend, refinance, refund or repay any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness, (v) for any guarantees by the Company of Indebtedness of the Company’s Subsidiaries or guarantees by the Company’s Subsidiaries of Indebtedness of the Company or any of its Subsidiaries, and (vi) with respect to any Indebtedness not in accordance with clauses (i) through (v), for any Indebtedness not to exceed $50 million in aggregate principal amount outstanding at the time incurred by the Company or any of its Subsidiaries;
(e) make any acquisition (including by merger, consolidation or acquisition of stock or assets) of any other Person (or any division or material amount of assets thereof) or business;
(f) make any capital expenditures, except for (i) capital expenditures up to $25 million in the aggregate (without counting any capital expenditures permitted pursuant to the following clauses (ii) and (iii)), (ii) capital expenditures made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise, or (iii) capital expenditures required to comply with any applicable Law;
(g) make any loans, advances or capital contributions to, or investments in, any other Person in excess of $25 million (or, with respect to seller-financing of divestitures by the Company or any of its Subsidiaries, $15 million) (without counting any amounts pursuant to the following clauses (i) through (iv)), except for those (i) required or contemplated by existing Contracts, (ii) permitted by Section 6.1(f), (iii) solely between the Company and a Subsidiary of the Company or among Subsidiaries of the Company or (iv) made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise;
(h) pledge or otherwise encumber shares of capital stock or other voting securities of the Company or any of its Subsidiaries, other than Permitted Liens, except in accordance with the incurrence of Indebtedness not prohibited by Section 6.1(d);
(i) (A) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any of the Company Real Property, except for dispositions of the properties set forth in Section 6.1(i) of the Company Disclosure Letter (subject to the limits set forth therein); or (B) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any other properties or non-cash assets with a value in excess of $45 million in the aggregate, except in the case of this clause (B) (x) sales or dispositions made in connection with any transaction among the Company and its Subsidiaries or among the Company’s Subsidiaries or (y) sales or dispositions made in the ordinary course of business;
(j) (i) split, combine or reclassify any Company Securities or amend the terms of any Company Securities, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities other than (A) a dividend or distribution by a Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) any dividend or distribution reasonably necessary for the Company or any of the Company Subreits to maintain its status as a REIT or avoid or reduce the imposition of any entity-level income or excise Tax under the Code or other applicable Law, or (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securities, other than in connection with (A) any redemption or repurchase of the Class A Preferred Stock, (B) the exercise of Company Options, (C) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (D) the acquisition by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (E) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, (F) the issuance of Company Securities to newly hired or promoted employees or newly appointed directors only in the ordinary course of business consistent with past practice, and, except as expressly provided in this Agreement or consented to in connection with annual grants writing in advance by the Investors, acting by a majority in interest (such consent not to employees be unreasonably withheld or delayed), the Company shall not:
(i) other than the Amended Articles, amend or modify its Organizational Documents, or amend or modify its corporate structure in a manner that would be materially adverse to the Investors;
(ii) other than as contemplated in the Senior Facilities, Yahoo! Preference Shares, the Preference Shares, the Equity Placing, and directors made Equity Incentive Pool, issue, sell, transfer, grant, pledge or dispose of any securities of the Company or any Subsidiary of the Company, except for grants, pledges or dispositions of securities that are immaterial to the interest of a financial investor in the Company, and for agreements or arrangements of non-wholly-owned Subsidiaries that are immaterial to the interest of a financial investor in the Company;
(iii) other than the Yahoo! Initial Repurchase, purchase, redeem or otherwise acquire any securities of the Company other than pursuant to employee equity incentive plans or otherwise in the ordinary course of business consistent with past practicebusiness;
(iv) split, combine or reclassify the Ordinary Shares;
(v) declare, set aside or pay any dividends or distributions on, or as required to comply with make any Company Benefit Plan as other distributions in effect on the date of this Agreement and (G) respect of, any transaction solely between the Company and a Subsidiary securities of the Company or between Subsidiaries of the Company;
(k) except (i) as required pursuant to existing Contracts or any Company Benefit Plan in effect on the date hereof, or (ii) as effected in the ordinary course of business and consistent with past practice, (A) adopt, amend or terminate any material Company Benefit Plan, (B) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any material Company Benefit Plan or (C) increase the annualized value of compensation and benefits to be provided to Company Employees or any other services providers of the Company or any of its Subsidiaries (other than increases in annualized value of cash compensation in the ordinary course of business consistent with past practice in an amount that does not exceed 5.0% of such annualized value, in the aggregate, immediately prior to the date hereof); provided that the Company may make payments to Company Employees who are not “named executive officers” (as defined under Regulation S-K of the Securities Act) in an amount not to exceed $1 million in the aggregate with the individual allocation and terms of such payments subject to the prior consultation with Parent;
(l) make any loans or advances to any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries;
(m) (i) hire or engage any individual who would be a Company Employee or individual independent contractor whose annual base compensation exceeds $200,000 or (ii) terminate the employment of any Company Employee whose annual base compensation exceeds $200,000, other than for cause;
(n) other than in the ordinary course of business consistent with past practice, settle or compromise any litigation or release, dismiss or otherwise dispose of any claim or arbitration not covered by insurance, other than settlements or compromises of litigation, claims or arbitration that do not, individually or in the aggregate, involve the payment of more than $15 million in excess of the amount reserved on the latest consolidated balance sheets of the Company in respect of litigation and claims, as set forth in the Company SEC Reports, and do not involve (A) any material injunctive or other non-monetary relief on the Company or any of its Subsidiaries or (B) any admission of wrongdoing by the Company or any of its Subsidiaries;
(o) (i) cancel any material indebtedness for borrowed money owed to the Company other than as a result of a repayment of such indebtedness, or (ii) waive or release any claims or right of material value except in the exercise of the Company’s commercially reasonable business judgment;
(p) enter into, materially modify or amend, or terminate any Real Property Lease (it being understood that, without limiting other modifications or amendments that may be material, any modification or amendment reducing the term or fees or other amounts that are payable to the Company or any of its Subsidiaries under any Real Property Lease will be considered a material modification or amendment of such Real Property Lease), except for the renewal, extension or replacement of any Real Property Lease expiring in accordance with its term (such renewal, extension or replacement to be on terms substantially similar to the existing Real Property Lease) or, other than in the ordinary course of business, enter into, materially modify or amend, or terminate any other Specified Contract other than as permitted by this Section 6.1securities of any of its non-wholly owned Subsidiaries;
(qvi) make dispose of any assets, including equity securities of any Subsidiary, that are material change to the Company and its Subsidiaries (taken as a whole), in financial accounting methods, principles or practiceseach case other than sales to third parties in the ordinary course of business consistent with past practice and for fair value, except insofar as may have been required any such disposals that are approved by a change in GAAP or Lawthe non-executive directors of the Company pursuant to Section 2.10 of the Alipay Framework Agreement;
(rvii) adopt a plan of complete or partial liquidation liquidation, dissolution, merger, consolidation, restructuring, recapitalization or dissolution other reorganization of the Company or any material Subsidiary of its Subsidiariesthe Company;
(sviii) make, change or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return, or settle or compromise any material Tax liability, audit, claim or assessment, change any material method of accounting for Tax purposes, enter into any Tax allocation, sharing or indemnity agreement (other than customary provisions in agreements or arrangements except to the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes or file any material Tax Return inconsistent with past practice other than as extent required by applicable Law, take any action or permit any action to be taken that could reasonably be expected to result in any condition to the Closing set forth in Article IX not being satisfied;
(tix) take any actionaction that, or fail to take any actionaction the failure of which to be taken, which action or failure to act would could reasonably be expected to cause (i) prevent or materially delay the Company or any Company Subreit to fail to qualify as a REIT or (ii) any other Affiliate consummation of the Company to fail to preserve its status as set forth on Section 4.16(c) of the Company Disclosure Letter, in each case, which failure would have a Material Adverse Effect on the CompanyTransactions; or
(ux) authorizetake, agree offer, propose or authorize any of, or commit or agree to do take any of of, the foregoing. Notwithstanding any of the foregoing or in any other provisions of this Agreement, nothing contained in this Agreement shall prohibit the Company or any of its Subsidiaries from taking or causing to be taken any action, at any time or from time to time, that in the good faith judgment of the Company is reasonably necessary or appropriate for the Company or any of the Company Subreits to maintain its qualification as a REIT; provided that, prior to taking any such action the Company and its Subsidiaries shall inform Parent in writing of such action and shall consult with and cooperate with Parent in good faith to minimize the adverse effect of such action to the Company and Parent.
Appears in 1 contract
Samples: Convertible Preference Share Purchase Agreement (Alibaba Group Holding LTD)
Conduct of the Company and its Subsidiaries. Except as (x) set forth in Section 6.1 During the period from the date of this Agreement through the Effective Time, the Company Disclosure Letter agrees as to itself and its Subsidiaries that, except (i) as expressly contemplated or as otherwise expressly permitted or required by this Agreement or the Disclosure Schedule, (ii) as required or contemplated by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary or reasonably desirable to consummate the Plan Transactionsapplicable Law, or (yiii) consented to the extent that Parent shall otherwise consent in writing by Parent (writing, which consent shall not be unreasonably withheld, conditioned or delayed), from the date hereof until the earlier of the Effective Time and termination of this Agreement in accordance with its terms, :
(a) the Company shall, and shall cause its Subsidiaries to, conduct shall (A) carry on their respective businesses in the usual, regular and ordinary course and in compliance with Lawall material respects, in substantially the same manner as heretofore conducted, and shall use all commercially reasonable efforts to maintain preserve intact their present lines of business and preserve intact its business organization, including the goodwill of any Governmental Authorities, lenderstheir relationships (contractual or otherwise) with customers, suppliers, landlords and other Persons others having business dealings with which it has them (including, without limitation, through ordinary course renewals, negotiations with and amendments to such relationships) to the end that their ongoing businesses shall not be impaired in any material respect at the Closing; and (B) pay expenses and payables, continue to make capital expenditures in accordance with the Capex Budget (but not enter into obligations in excess thereof), xxxx customers, collect receivables, pay payables, purchase inventory and replace inoperable, worn out or obsolete assets with assets of comparable quality, in each case in the ordinary course of business relationships, consistent with past custom and to maintain the status of the Company as a REIT for U.S. federal income tax purposespractice; provided, however, that no action by the Company or any of its Subsidiaries of the type with respect to matters specifically addressed in Sections 6.1(a) through 6.1(r) by any other provision of this Section 5.01 shall be deemed a breach of this sentence Section 5.01(a), unless such action would constitute a breach of one or more of such other provision. Except provisions;
(ib) as the Company shall not, and shall not permit any of its Subsidiaries to, (A) declare or pay any dividends on or make other distributions in respect of any of its or their capital stock (except for dividends in Cash), (B) split, combine or reclassify any of its or their capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for, shares of its or their capital stock (except for any such transaction by a direct or indirect wholly-owned Subsidiary of the Company which remains a direct or indirect wholly-owned Subsidiary of the Company after consummation of such transaction), or (C) repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exercisable for any shares of its capital stock (except for repurchases and redemptions paid in Cash);
(c) the Company shall not, and shall not permit any of its Subsidiaries to, issue, deliver or sell, or authorize or propose the issuance, delivery or sale of, any shares of its capital stock of any class, or any securities convertible into or exercisable for, or any rights, warrants or options to acquire, any such shares of its capital stock, or enter into any agreement with respect to any of the foregoing, other than issuances of capital stock by a direct or indirect Subsidiary of the Company to such Subsidiary’s parent or another direct or indirect Subsidiary of the Company and issuances of Company Common Stock by the Company upon the exercise of Company Options issued and outstanding on the date hereof;
(d) other than to the extent required to comply with its obligations hereunder or required by Law, (ii) as set forth in Section 6.1 of the Company Disclosure Letter, (iii) as may be expressly permitted or required by this Agreement or required by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary to consummate the Plan Transactions, or (iv) as may be consented to by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall not permit its Subsidiaries to:
(a) adopt any change in the Company Articles or the Company Bylaws;
(b) merge or consolidate the Company or any of its Subsidiaries with to, amend its or their certificate or articles of incorporation, bylaws or other equivalent governing documents;
(e) the Company shall not, and shall not permit any Personof its Subsidiaries to, acquire or agree to acquire by merging or consolidating with, or by purchasing an equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire or in-license any assets or rights (other than the Mergers and other than any mergers acquisition or consolidations among in-license of assets used in the operations of the business of the Company and its Subsidiaries in the ordinary course consistent with past practice); provided, however, that the foregoing shall not prohibit (A) internal reorganizations or among consolidations involving existing direct or indirect Subsidiaries of the Company’s SubsidiariesCompany that remain direct or indirect Subsidiaries of the Company and/or (B) the creation of new direct or indirect Subsidiaries of the Company organized to conduct or continue activities otherwise permitted by this Agreement;
(cf) redeem, repurchase other than (A) internal reorganizations or defease any Indebtedness consolidations involving existing direct or indirect Subsidiaries of the Company that remain direct or indirect Subsidiaries of the Company or any Subsidiary (B) as may be required by or in conformance with applicable Law in order to permit or facilitate the consummation of the Company in excess of $75 million (provided that no prepayment penalty would be payable in connection therewith), other than (i) at stated maturity and any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as in effect on the date hereof Transactions or as modified with the consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) repayments or prepayments of Indebtedness under the Company Credit Facilities (or any other revolving credit facility permitted to be incurred pursuant to the terms of this Agreement), (iii) in connection with any replacement, renewal, extension, refinancing, refunding or repayment permitted by Section 6.1(d)(iv) or (iv) any of the foregoing relating to intercompany Indebtedness;
(d) incur, create, assume or otherwise become liable for any Indebtedness, except (i) for any Indebtedness incurred in the ordinary course of business, including mortgages on real property acquired by the Company or shall not, and shall not permit any of its SubsidiariesSubsidiaries to transfer, (ii) for Indebtedness among the Company and its Subsidiaries assign, lease, sell, impose any Lien on, encumber or among the Company’s Subsidiariesotherwise dispose of, (iii) for Indebtedness under the Company Credit Facilities (and any other credit facility of the Company hereafter created with term or revolving Indebtedness on terms substantially the same as those governing the existing revolving credit facility as it may have been amended consistent with this clause (d))agree to sell, (iv) for Indebtedness incurred to replaceencumber or otherwise dispose of, renew, extend, refinance, refund or repay any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness, (v) for any guarantees by the Company of Indebtedness of the Company’s Subsidiaries or guarantees by the Company’s Subsidiaries of Indebtedness of the Company or any of its Subsidiariesmaterial assets, and (vi) with respect to any Indebtedness not in accordance with clauses (i) through (v)tangible or intangible, for any Indebtedness not to exceed $50 million in aggregate principal amount outstanding at the time incurred by the Company or any of its Subsidiaries;
(e) make any acquisition (including by merger, consolidation or acquisition of stock or assets) of any other Person (or any division or material amount of assets thereof) or business;
(f) make any capital expenditures, except for (i) capital expenditures up to $25 million than in the aggregate (without counting any capital expenditures permitted pursuant to the following clauses (ii) and (iii)), (ii) capital expenditures made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act ordinary course of God or event of force majeure or otherwise, or (iii) capital expenditures required to comply business consistent with any applicable Lawpast practice;
(g) the Company shall not, and shall not permit any of its Subsidiaries to (x) make any loans, advances or capital contributions to, or investments in, any other Person in excess of $25 million Person, other than (or, with respect to seller-financing of divestitures A) by the Company or any of its Subsidiaries, $15 million) (without counting any amounts pursuant to the following clauses (i) through (iv)), except for those (i) required a direct or contemplated by existing Contracts, (ii) permitted by Section 6.1(f), (iii) solely between the Company and a indirect Subsidiary of the Company to or among Subsidiaries of in the Company or any other direct or indirect Subsidiary of the Company, (ivB) made in response pursuant to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise;
(h) pledge or otherwise encumber shares of capital stock contract or other voting securities legal obligation of the Company or any of its Subsidiaries, other than Permitted Liens, except in accordance with the incurrence of Indebtedness not prohibited by Section 6.1(d);
(i) (A) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any Subsidiary of the Company Real Property, except for dispositions as in effect as of the properties set forth date hereof and described in Section 6.1(i5.01(g) of the Company Disclosure Letter (subject to the limits set forth therein); Schedule or (BC) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any other properties or non-cash assets with a value in excess of $45 million in the aggregate, except in the case of this clause (B) (x) sales or dispositions made in connection with any transaction among the Company and its Subsidiaries or among the Company’s Subsidiaries or (y) sales or dispositions made in the ordinary course of business;
business consistent with past practice or (jy) create, incur, assume or suffer to exist any Indebtedness to the Company or any Subsidiary of the Company not in existence as of the date of this Agreement, except (i1) splitpursuant to the credit facilities, combine or reclassify any Company Securities or amend indentures (but not in excess of amounts authorized for issuance thereunder as of the terms date of any Company Securitiesthis Agreement) and other arrangements in existence on the date of this Agreement, (ii2) declare, set aside by the Company or pay any dividend a direct or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities other than (A) a dividend or distribution by a indirect Subsidiary of the Company to the Company or another any other direct or indirect Subsidiary of the Company Company, (3) arising from the sale, factoring or discounting of receivables in the ordinary course of business consistent with past practice or (B4) any dividend or distribution reasonably necessary for the Company or any of the Company Subreits to maintain its status as a REIT or avoid or reduce the imposition of any entity-level income or excise Tax under the Code or other applicable Law, or (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securities, other than in connection with (A) any redemption or repurchase of the Class A Preferred Stock, (B) the exercise of Company Options, (C) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (D) the acquisition by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (E) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, (F) the issuance of Company Securities to newly hired or promoted employees or newly appointed directors trade debt and commercial finance in the ordinary course of business consistent with past practice, in each case as such credit facilities, indentures and other arrangements and other existing Indebtedness may be amended, extended, modified, refunded, renewed or in connection with annual grants to employees and directors made in refinanced after the ordinary course date of business consistent with past practice, or this Agreement;
(h) other than as required to comply with any Company Benefit Plan by an existing contract or agreement as in effect on the date of this Agreement hereof and (Gset forth on Section 5.01(h) any transaction solely between the Company and a Subsidiary of the Company or between Subsidiaries of the Company;
(k) except (i) as required pursuant to existing Contracts or any Company Benefit Plan in effect on the date hereof, or (ii) as effected in the ordinary course of business Disclosure Schedule and consistent with past practice, (A) adopt, amend or terminate any material Company Benefit Plan, (B) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any material Company Benefit Plan or (C) increase the annualized value of compensation and benefits to be provided to Company Employees or any other services providers of the Company or any of its Subsidiaries (other than increases in annualized value of cash compensation in the ordinary course of business consistent with past practice in an amount that does not exceed 5.0% of such annualized value, in the aggregate, immediately prior to the date hereof); provided that the Company may make payments to Company Employees who are not “named executive officers” (as defined under Regulation S-K of the Securities Act) in an amount not to exceed $1 million in the aggregate with the individual allocation and terms of such payments subject to the prior consultation with Parent;
(l) make any loans or advances to any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries;
(m) (i) hire or engage any individual who would be a Company Employee or individual independent contractor whose annual base compensation exceeds $200,000 or (ii) terminate the employment of any Company Employee whose annual base compensation exceeds $200,000, other than for cause;
(n) other than in the ordinary course of business consistent with past practice, settle or compromise neither the Company nor any litigation or release, dismiss or otherwise dispose of any claim or arbitration not covered by insurance, other than settlements or compromises of litigation, claims or arbitration that do not, individually or in the aggregate, involve the payment of more than $15 million in excess of the amount reserved on the latest consolidated balance sheets Subsidiary of the Company in respect of litigation and claims, as set forth in the Company SEC Reports, and do not involve shall (A) increase the amount of cash compensation or severance pay of any material injunctive director or executive officer or grant or announce any stock option, equity or incentive awards or the increase in salaries, bonuses or other non-monetary relief on the Company or any of its Subsidiaries or (B) any admission of wrongdoing compensation and benefits payable by the Company or any Subsidiary of its Subsidiaries;
(o) (i) cancel any material indebtedness for borrowed money owed to the Company other than as a result of a repayment of such indebtedness, or (ii) waive or release to any claims or right of material value except in the exercise of the Company’s commercially reasonable business judgment;
(p) enter intoemployees, materially modify or amendofficers, or terminate any Real Property Lease (it being understood thatdirectors, without limiting other modifications or amendments that may be material, any modification or amendment reducing the term or fees stockholders or other amounts that are payable to service providers of the Company or any Subsidiary of its Subsidiaries under the Company, (B) make any Real Property Lease will be considered a material modification increase in, or amendment commitment to increase materially, any employee benefits or adopt or make any commitment, to adopt any new benefit or compensation plan, program, agreement or arrangement or to make any material contribution, other than regularly scheduled contributions or other than as required by Law, to any Employee Benefit Plan, (C) payor agree to pay any pension, retirement allowance, termination or severance pay, bonus or other employee benefit not required by any existing Employee Benefit Plan to any employee, officer, director, stockholder or other service provider of such Real Property Lease)the Company or any Subsidiary of the Company, whether past or present, or (D) enter into or amend any contracts of employment or any consulting, bonus, severance, retention, retirement or similar agreement, except for the renewal, extension or replacement of any Real Property Lease expiring in accordance with its term (such renewal, extension or replacement to be on terms substantially similar to the existing Real Property Lease) or, other than agreements for newly hired employees in the ordinary course of business, enter into, materially modify or amend, or terminate any other Specified Contract other than as permitted by this Section 6.1business consistent with past practice with an annual base salary and incentive compensation opportunity not to exceed $100,000;
(qi) the Company shall not (A) change its fiscal year, (B) make any material Tax election, change any annual accounting period, adopt or change any material method of accounting, file any material amended Tax Return, enter into any material closing agreement, settle any material claim or assessment, surrender any right to claim a material refund, offset or other reduction in financial accounting methodsliability, principles consent to any extension or practiceswaiver of the limitations period applicable to any material claim or assessment, in each case with respect to Taxes, (C) except insofar as may have been required by a change changes in GAAP or as required by applicable Law;
, change its methods, practices or principles of accounting in effect as of the date hereof or (rD) adopt a plan take any other action, or omit to take any action, in either case inconsistent with past practice, relating to the filing of complete any Tax Return or partial liquidation the payment of any Tax, if such election, adoption, change, amendment, agreement, settlement, surrender, consent or dissolution other action or omission could have the effect of materially increasing the present or future Tax liability or materially decreasing any present or future Tax asset of the Company or any of its Subsidiaries;
(sj) makeother than in connection with any action expressly permitted by any other subsection of this Section 5.01 and except for any new contract awards, change and any contract renewals, negotiations and amendments entered into in the ordinary course of business and consistent with past practice, neither the Company nor any Subsidiary of the Company shall (i) enter into or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Returnbecome bound by, or settle permit any of the assets owned or compromise used by it to become bound by, any material Tax liabilitycontract of the type required to be disclosed pursuant to Section 3.16 of this Agreement, auditlease, claim or assessment, change any material method of accounting for Tax purposes, enter into any Tax allocation, sharing or indemnity agreement license (other than customary provisions in agreements or arrangements the primary subject ordinary course of which is not Taxesbusiness), enter into any closing agreement or (ii) accelerate, modify, cancel or terminate (other than in respect the ordinary course of material Taxes business), or file waive any material Tax Return inconsistent with past practice other than as required by applicable Law;
(t) take right or remedy under, any actionContract, lease or fail license to take any action, which action or failure to act would reasonably be expected to cause (i) the Company or any Company Subreit to fail to qualify as a REIT or (ii) any other Affiliate Subsidiary of the Company to fail to preserve its status as set forth on Section 4.16(cis a party or by which any of them is bound;
(k) of the Company Disclosure Lettershall not, and shall not permit any of its Subsidiaries to enter in each case, which failure would have a Material Adverse Effect on the Company; orto any Affiliate Transaction;
(u1) authorizethe Company shall not, and shall not permit any of its Subsidiaries to enter into any collective bargaining agreement or implement any plant closing or layoff of employees that could implicate the WARN Act;
(m) neither the Company nor its Subsidiaries shall amend, modify, extend, renew or terminate any Real Property Lease; assign, transfer or sublet its interest in any Leased Real Property; or enter into any new lease, sublease, license or other agreement for the use or occupancy of any real property; and
(n) commit or agree or commit to do any of the foregoing. Notwithstanding any of the foregoing or in any other provisions of this Agreement, nothing contained in this Agreement shall prohibit the Company or any of its Subsidiaries from taking or causing to be taken any action, at any time or from time to time, that in the good faith judgment of the Company is reasonably necessary or appropriate for the Company or any of the Company Subreits to maintain its qualification as a REIT; provided that, prior to taking any such action the Company and its Subsidiaries shall inform Parent in writing of such action and shall consult with and cooperate with Parent in good faith to minimize the adverse effect of such action to the Company and Parentforgoing.
Appears in 1 contract
Samples: Merger Agreement (Bankrate, Inc.)
Conduct of the Company and its Subsidiaries. Except as (x) set forth in Section 6.1 of the The Company Disclosure Letter or as otherwise expressly permitted or required by this Agreement or required or contemplated by the Alternative Plan Sponsor Agreementcovenants and agrees that, the Bankruptcy Case or otherwise as necessary or reasonably desirable to consummate the Plan Transactions, or (y) consented to in writing by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), from between the date hereof until the earlier of the Effective Time and termination of this Agreement in accordance with its termsand the Settlement Date or the date, the Company shallif any, and shall cause its Subsidiaries toon which this Agreement is terminated pursuant to Section 10.01, conduct their respective businesses in the ordinary course and in compliance with Law, and use all commercially reasonable efforts to maintain and preserve intact its business organization, including the goodwill of any Governmental Authorities, lenders, suppliers, landlords and other Persons with which it has material business relationships, and to maintain the status of the Company as a REIT for U.S. federal income tax purposes; provided, however, that no action by the Company or its Subsidiaries of the type specifically addressed in Sections 6.1(a) through 6.1(r) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. Except except (i) as may be required by Law, (ii) as set forth may be agreed to in Section 6.1 writing by ABI, (iii) as consented to or directed by ABI’s designees on the board of directors of the Company Disclosure Letteror any committee thereof with competent authority, (iiiiv) as may be expressly permitted or required contemplated by this Agreement or required by the Alternative Plan Sponsor Agreement, the Bankruptcy Case or otherwise as necessary to consummate the Plan Transactions, or (ivv) as may be consented to by Parent (which consent shall not be unreasonably withheld, conditioned or delayed), set forth in Section 5.01 of the Company shall not, and shall not permit its Subsidiaries toDisclosure Schedule:
(a) adopt any change in the Company Articles or the Company Bylaws;
(b) merge or consolidate the Company or any business of its Subsidiaries with any Person, other than the Mergers and other than any mergers or consolidations among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(c) redeem, repurchase or defease any Indebtedness of the Company or any Subsidiary of the Company in excess of $75 million (provided that no prepayment penalty would shall be payable in connection therewith), other than (i) at stated maturity and any required amortization payments and mandatory prepayments, in each case in accordance with the terms of the instrument governing such Indebtedness as in effect on the date hereof or as modified with the consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (ii) repayments or prepayments of Indebtedness under the Company Credit Facilities (or any other revolving credit facility permitted to be incurred pursuant to the terms of this Agreement), (iii) in connection with any replacement, renewal, extension, refinancing, refunding or repayment permitted by Section 6.1(d)(iv) or (iv) any of the foregoing relating to intercompany Indebtedness;
(d) incur, create, assume or otherwise become liable for any Indebtedness, except (i) for any Indebtedness incurred in the ordinary course of business, including mortgages on real property acquired by the Company or any of its Subsidiaries, (ii) for Indebtedness among the Company and its Subsidiaries or among the Company’s Subsidiaries, (iii) for Indebtedness under the Company Credit Facilities (and any other credit facility of the Company hereafter created with term or revolving Indebtedness on terms substantially the same as those governing the existing revolving credit facility as it may have been amended consistent with this clause (d)), (iv) for Indebtedness incurred to replace, renew, extend, refinance, refund or repay any existing Indebtedness on substantially the same or more favorable terms to the Company than such existing Indebtedness, (v) for any guarantees by the Company of Indebtedness of the Company’s Subsidiaries or guarantees by the Company’s Subsidiaries of Indebtedness of the Company or any of its Subsidiaries, and (vi) with respect to any Indebtedness not in accordance with clauses (i) through (v), for any Indebtedness not to exceed $50 million in aggregate principal amount outstanding at the time incurred by the Company or any of its Subsidiaries;
(e) make any acquisition (including by merger, consolidation or acquisition of stock or assets) of any other Person (or any division or material amount of assets thereof) or business;
(f) make any capital expenditures, except for (i) capital expenditures up to $25 million in the aggregate (without counting any capital expenditures permitted pursuant to the following clauses (ii) and (iii)), (ii) capital expenditures made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise, or (iii) capital expenditures required to comply with any applicable Law;
(g) make any loans, advances or capital contributions to, or investments in, any other Person in excess of $25 million (or, with respect to seller-financing of divestitures by the Company or any of its Subsidiaries, $15 million) (without counting any amounts pursuant to the following clauses (i) through (iv)), except for those (i) required or contemplated by existing Contracts, (ii) permitted by Section 6.1(f), (iii) solely between the Company and a Subsidiary of the Company or among Subsidiaries of the Company or (iv) made in response to any emergency, whether caused by war, terrorism, weather events, natural disasters, public health events, outages, casualty, Act of God or event of force majeure or otherwise;
(h) pledge or otherwise encumber shares of capital stock or other voting securities of the Company or any of its Subsidiaries, other than Permitted Liens, except in accordance with the incurrence of Indebtedness not prohibited by Section 6.1(d);
(i) (A) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any of the Company Real Property, except for dispositions of the properties set forth in Section 6.1(i) of the Company Disclosure Letter (subject to the limits set forth therein); or (B) sell, lease (except for the exercise of any extension or renewal option), license, mortgage, sell and leaseback or otherwise dispose of any other properties or non-cash assets with a value in excess of $45 million in the aggregate, except in the case of this clause (B) (x) sales or dispositions made in connection with any transaction among the Company and its Subsidiaries or among the Company’s Subsidiaries or (y) sales or dispositions made in the ordinary course of business;
(j) (i) split, combine or reclassify any Company Securities or amend the terms of any Company Securities, (ii) declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of Company Securities other than (A) a dividend or distribution by a Subsidiary of the Company to the Company or another Subsidiary of the Company or (B) any dividend or distribution reasonably necessary for the Company or any of the Company Subreits to maintain its status as a REIT or avoid or reduce the imposition of any entity-level income or excise Tax under the Code or other applicable Law, or (iii) issue or offer to issue any Company Securities, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire, any Company Securities, other than in connection with (A) any redemption or repurchase of the Class A Preferred Stock, (B) the exercise of Company Options, (C) the withholding of Company Securities to satisfy Tax obligations with respect to Company Equity Awards, (D) the acquisition by the Company of Company Securities in connection with the forfeiture of Company Equity Awards, (E) the acquisition by the Company of Company Securities in connection with the net exercise of Company Options in accordance with the terms thereof, (F) the issuance of Company Securities to newly hired or promoted employees or newly appointed directors in the ordinary course of business consistent with past practice, or in connection with annual grants to employees and directors made in the ordinary course of business consistent with past practice, or as required to comply with any Company Benefit Plan as in effect on the date of this Agreement and (G) any transaction solely between the Company and a Subsidiary of the Company or between Subsidiaries of the Company;
(k) except (i) as required pursuant to existing Contracts or any Company Benefit Plan in effect on the date hereof, or (ii) as effected in the ordinary course of business and consistent with past practice, (A) adopt, amend or terminate any material Company Benefit Plan, (B) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any material Company Benefit Plan or (C) increase the annualized value of compensation and benefits to be provided to Company Employees or any other services providers of the Company or any of its Subsidiaries (other than increases in annualized value of cash compensation conducted only in the ordinary course of business consistent with past practice in an amount all material respects and in compliance with all applicable Laws in all material respects and the Company shall comply with the Covenant Agreements and the Charter Documents of the Company, including with respect to the rights of ABI to consent to certain actions of the Company and its Subsidiaries under the Charter Documents of the Company;
(b) the Company shall not (and, as applicable, shall cause its Subsidiaries not to) issue, sell, pledge, dispose, encumber or grant any shares of its or its Subsidiaries’ capital stock, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of its or its Subsidiaries’ capital stock, other than (i) in connection with the Merger, the DIFA Merger and the Share Restructuring, (ii) pursuant to the ABI Subscription and (iii) in connection with any capital increase or other similar action with respect to any direct or indirect wholly owned Subsidiary of (x) the Company or (y) Diblo, provided that does such Subsidiary remains directly or indirectly wholly owned by the Company or Diblo;
(c) the Company shall not exceed 5.0% (and, as applicable, shall cause its Subsidiaries not to), except (i) as required pursuant to existing written agreements (including any collective bargaining agreements existing on the date hereof or entered into after the date hereof not in contravention of such annualized value, Section 5.01(f)) or benefit plans (including Company Benefit Plans) in the aggregate, immediately prior to effect as of the date hereof); provided that the Company may make payments to Company Employees who are not “named executive officers” , or (as defined under Regulation S-K of the Securities Actii) in connection with any new hire (including the hiring of an amount not officer to exceed $1 million replace a retiring, resigning, reassigned or terminated officer in the aggregate ordinary course of business ) or promotion based on job performance or workplace requirements (in the ordinary course of business): (A) except in the ordinary course consistent with past practice, increase the individual allocation and terms of such payments subject compensation or other benefits payable or to the prior consultation with Parent;
(l) make any loans become payable to directors, officers or advances to any current or former director, officer, employee or independent contractor employees of the Company or any of its Subsidiaries;
, (mB) grant any severance or termination pay to, or enter into any severance agreement with, any director, officer or employee of the Company or any of its Subsidiaries, (iC) hire enter into any employment agreement with any director, officer or engage employee of the Company or any individual who would be a Company Employee or individual independent contractor whose annual base compensation exceeds $200,000 or (ii) terminate the employment of any Company Employee whose annual base compensation exceeds $200,000its Subsidiaries, other than except for cause;
(n) other than agreements in the ordinary course of business consistent with past practicepractice with non-officers, or (D) enter into, terminate or modify any Company Benefit Plan (or any arrangement that would be a Company Benefit Plan if in effect on the date of this Agreement), except in the ordinary course consistent with past practice (1) with respect to Company Benefit Plans that generally apply to substantially all employees of the Company and its Subsidiaries or (2) with respect to Company Benefit Plans that generally only apply to similarly situated employees of the Company and its Subsidiaries, where such entry into, termination or modification does not materially increase the value of the benefits provided pursuant thereto (provided, that in no event shall the Company or its Subsidiaries (x) adopt any new severance plans without the prior written agreement of ABI or, (y) except as expressly permitted in the first paragraph of Section 5.01(c) of the Company Disclosure Schedule, award any compensation to replace any Company Performance Shares that would have been granted to directors, officers or employees of the Company and its Subsidiaries following the date hereof but for the restrictions set forth in Sections 5.01(b) and 5.01(c) of this Agreement;
(d) the Company shall not institute, declare or pay any dividend or distribution in respect of the capital stock of the Company; provided, however, that, in the event that the Settlement Date shall be reasonably expected to occur on or after January 1, 2013, the Company shall be permitted to declare and pay a dividend as set forth on Section 5.01(d) of the Company Disclosure Schedule;
(e) the Company shall not (and, as applicable, shall cause its Subsidiaries not to) take any actions outside the ordinary course of business, including acceleration of collection of receivables or deferral of payment of payables (including those owed by or to DIFA, as the case may be) and other expenses or capital expenditures, for the purpose of manipulating the dividend paid by the Company to its shareholders;
(f) the Company shall not (and, as applicable, shall cause its Subsidiaries not to) enter into any multi-year agreements involving the payment or receipt of amounts in excess of $15 million or its equivalent in Pesos;
(g) the Company shall not (and, as applicable, shall cause its Subsidiaries not to) exercise its call option held in relation to Crown JV set forth in Section 12.8 of the Amended and Restated Limited Liability Company Agreement of Crown JV, dated January 2, 2007 (as it may be amended from time to time, the “Crown JV Agreement”);
(h) prior to December 15, 2013, the Company shall not (and, as applicable, shall cause its Subsidiaries not to) exercise its call option held in relation to Crown JV set forth in Section 12.9 of the Crown JV Agreement;
(i) the Company shall perform all of its obligations under the DIFA Merger Agreement and shall, upon ABI’s reasonable request, use commercially reasonable efforts to enforce all of its rights under the DIFA Merger Agreement;
(j) the Company shall not (and, as applicable, shall cause its Subsidiaries not to) settle, compromise, discharge or agree to settle any action, suit, claim, investigation or compromise any litigation or release, dismiss or otherwise dispose of any claim or arbitration not covered by insurance, proceeding other than settlements that (i) do not involve the payment by the Company or compromises any of litigation, claims or arbitration that do not, individually or its Subsidiaries of monetary damages in excess of $15 million in the aggregate, involve the payment of more than $15 million in excess of the amount reserved on the latest consolidated balance sheets of the Company in respect of litigation and claims, as set forth in the Company SEC Reportsafter applying applicable reserves made specifically for such specific matter being settled, and do not involve (A) any material injunctive or other non-monetary relief or that would impose material restrictions on the business or operations of the Company or its Subsidiaries, and (ii) provide for or otherwise result in a customary release of the Company and its Subsidiaries from all claims and do not provide for any admission of violation of Law by the Company or any of its Subsidiaries or (Bprovided, that, in the case of this clause (j), ABI shall not unreasonably withhold its agreement pursuant to clause (ii) any admission of wrongdoing the first paragraph of this Section 5.01 following a written request for such agreement by the Company);
(k) the Company shall not (and, as applicable, shall cause its Subsidiaries not to) make or authorize any capital expenditure or lease commitment in excess of $15 million or its equivalent in Pesos that has not been included in a budget approved by the board of directors of the Company;
(l) the Company shall not (and, as applicable, shall cause its Subsidiaries not to) extend or renew its agreements with any of its Subsidiariesimport partners, including in respect of export markets, existing as of the date hereof, or enter into any new agreements with any new import partners; provided, that, in the case of any such existing agreements that shall expire prior to the Settlement Date (other than in respect of the agreements set forth on Section 5.01(l) of the Company Disclosure Schedule), the Company may renew such agreements by no more than two years;
(m) the Company shall not (and, as applicable, shall cause its Subsidiaries not to) invest its cash in financial investments other than in (i) cash equivalents or (ii) the ordinary course of business consistent with past practice;
(n) the Company shall not amend or terminate the Gondi Supply Agreement;
(o) (i) cancel any material indebtedness for borrowed money owed to the Company other than shall not (and, as a result of a repayment of such indebtednessapplicable, or (ii) waive or release any claims or right of material value except in the exercise of the Company’s commercially reasonable business judgment;
(pshall cause its Subsidiaries not to) enter into, terminate, extend, renew or materially modify or amendany collective bargaining agreements (provided, or terminate any Real Property Lease (it being understood that, without limiting other modifications or amendments that may be material, any modification or amendment reducing in the term or fees or other amounts that are payable to the Company or any case of its Subsidiaries under any Real Property Lease will be considered a material modification or amendment of such Real Property Leasethis clause (o), except for the renewal, extension or replacement of any Real Property Lease expiring in accordance with ABI shall not unreasonably withhold its term (such renewal, extension or replacement agreement pursuant to be on terms substantially similar to the existing Real Property Lease) or, other than in the ordinary course of business, enter into, materially modify or amend, or terminate any other Specified Contract other than as permitted by this Section 6.1;
(q) make any material change in financial accounting methods, principles or practices, except insofar as may have been required by a change in GAAP or Law;
(r) adopt a plan of complete or partial liquidation or dissolution of the Company or any of its Subsidiaries;
(s) make, change or revoke any material Tax election or change a material method of Tax accounting, amend any material Tax Return, or settle or compromise any material Tax liability, audit, claim or assessment, change any material method of accounting for Tax purposes, enter into any Tax allocation, sharing or indemnity agreement (other than customary provisions in agreements or arrangements the primary subject of which is not Taxes), enter into any closing agreement in respect of material Taxes or file any material Tax Return inconsistent with past practice other than as required by applicable Law;
(t) take any action, or fail to take any action, which action or failure to act would reasonably be expected to cause (i) the Company or any Company Subreit to fail to qualify as a REIT or clause (ii) any other Affiliate of the Company to fail to preserve its status as set forth on first paragraph of this Section 4.16(c) of the Company Disclosure Letter, in each case, which failure would have 5.01 following a Material Adverse Effect on written request for such agreement by the Company; or
(u) authorize, agree or commit to do any of the foregoing. Notwithstanding any of the foregoing or in any other provisions of this Agreement, nothing contained in this Agreement shall prohibit the Company or any of its Subsidiaries from taking or causing to be taken any action, at any time or from time to time, that in the good faith judgment of the Company is reasonably necessary or appropriate for the Company or any of the Company Subreits to maintain its qualification as a REIT; provided that, prior to taking any such action the Company and its Subsidiaries shall inform Parent in writing of such action and shall consult with and cooperate with Parent in good faith to minimize the adverse effect of such action to the Company and Parent).
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