Conduct of the Company’s Business. During the period from the date of this Agreement and continuing until the earlier of the Effective Time and the date nominees of Parent or Subsidiary constitute a majority of the members of the board of trustees of the Company (such earlier time, the “Control Time”), except either as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed), the Company shall, and shall cause its subsidiaries to, conduct its and their business in the ordinary course and use commercially reasonable efforts to conduct its and their business relationships with third parties and to keep available the services of their present officers and employees, provided that it does not require additional compensation, and preserve its and their relationships with customers, suppliers and others having business dealings with the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreement. In addition, without limiting the generality of the foregoing, except as expressly permitted in this Agreement, from the date hereof until the Control Time, the Company shall not, and shall cause its subsidiaries not to: (a) (i) authorize, declare or pay any dividends on or make other distributions in respect of any of its stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities; (b) except in accordance with the Share Option Agreement, issue, deliver, sell, pledge or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other security; (c) amend or propose to amend its declaration of trust, certificate of incorporation or bylaws (or similar organizational documents); (d) (i) acquire or agree to acquire any material assets (including securities) outside the ordinary course or merge or consolidate with any person or engage in any similar transaction or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company and other than loans to auto dealers in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse Line; (e) sell, lease, license, encumber or otherwise dispose of any of its assets or any interest therein, other than in the ordinary course (including the disposition of any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization; (f) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse Line; (g) make or rescind any Tax election or settle or compromise any Tax liability of the Company or any of its subsidiaries; (h) make or agree to make any capital expenditures other than in amounts of less than $75,000 in the aggregate; (i) pay, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate. (j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions; (i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule; (l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom; (m) take any action to delist the Shares from Nasdaq; (n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year; (o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent; (p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, other than in the ordinary course of business; (q) securitize, or create any financing arrangements in the nature of a collateralized debt obligation with respect to, any accounts receivable, loans or other assets; (r) amend or modify the existing agreement between Company and Company Financial Advisor; or (s) authorize any of, or commit or agree to take any of, the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditions.
Appears in 4 contracts
Samples: Merger Agreement (Falcon Financial Investment Trust), Merger Agreement (Istar Financial Inc), Merger Agreement (Istar Financial Inc)
Conduct of the Company’s Business. (a) During the period from the date of this Agreement and continuing hereof until the earlier of the Effective Time termination of this Agreement in accordance with its terms and the date nominees Effective Time, except (i) as may be required by applicable Law, (ii) with the prior written consent of Parent or Subsidiary constitute a majority of the members of the board of trustees of the Company (such earlier time, the “Control Time”), except either as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably withheld, conditioned or delayed), (iii) as contemplated or required by this Agreement or (iv) as set forth in Section 5.1(a) of the Company Disclosure Schedule, subject to compliance with the restrictions in Section 5.1(b), the Company shall, shall and shall cause each of its subsidiaries to, Subsidiaries to (A) conduct its and their business in the ordinary course and materially consistent with past practice and (B) use commercially reasonable efforts to conduct its and their business relationships with third parties and to keep available the services of their present officers and employees, provided that it does not require additional compensation, maintain and preserve intact its and their relationships with customers, suppliers and others having business dealings with organization.
(b) During the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreement. In addition, without limiting the generality of the foregoing, except as expressly permitted in this Agreement, period from the date hereof until the Control earlier of the termination of this Agreement in accordance with its terms and the Effective Time, except (i) as may be required by applicable Law, (ii) with the prior written consent of Parent (which shall not be unreasonably withheld, conditioned or delayed), (iii) as contemplated or required by this Agreement or (iv) as set forth in Section 5.1(b) of the Company Disclosure Schedule, the Company shall not, and shall cause not permit any of its subsidiaries not Subsidiaries to:
(aA) (i) authorize, declare amend the Company Organizational Documents or pay otherwise take any dividends on or make other distributions in respect of action to exempt any of its stock (except for dividends by a wholly owned subsidiary Person from any provision of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), Organizational Documents;
(iiB) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other capital stock, voting securities or (iii) repurchase, redeem or otherwise acquire any shares of stock other equity interests of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securitiesCompany;
(bC) except in accordance with the Share Option Agreementmake, issue, deliver, sell, pledge declare or encumberpay any dividend, or authorize make any other distribution on, or propose the issuancedirectly or indirectly redeem, delivery, sale, pledge purchase or encumbrance ofotherwise acquire, any shares of its beneficial capital stock, or any other securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock, except for (1) any such transactions solely among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, (2) the acceptance of Company Common Shares as payment for the exercise price of Company Options or (3) the acceptance of Company Common Shares, or withholding of Company Common Shares otherwise deliverable, to satisfy withholding Taxes incurred in connection with the exercise, vesting and/or settlement of Company Equity Awards; provided, that the Company may make, declare and pay quarterly cash dividends (and, with respect to the Company Equity Awards, as and if applicable, dividends or dividend equivalents) in an amount per share not in excess of $0.11 per quarter and with record dates consistent with the record dates customarily used by the Company for the payment of quarterly cash dividends, including with respect to the quarter in which the Effective Time occurs unless the Effective Time precedes the record date for such quarter;
(D) grant any Company Equity Awards or other equity-based awards or interests, or grant any individual, corporation or other entity any right to acquire any shares of its capital stock;
(1) issue, sell or otherwise permit to become outstanding any additional shares of its capital stock or securities convertible or exchangeable into, or exercisable for, any shares of its capital stock or any options, warrants, or other securityrights of any kind to acquire any shares of its capital stock, except pursuant to the exercise, vesting and/or settlement of Company Equity Awards outstanding as of the date hereof, or granted after the date hereof consistent with the terms of this Agreement, in each case in accordance with their terms, or (2) enter into any agreement, understanding or arrangement with respect to the sale or voting of its capital stock or equity interests;
(cF) amend or propose to amend its declaration of trust, certificate of incorporation or bylaws (or similar organizational documents);
(d) (i) acquire or agree to acquire any material assets (including securities) outside the ordinary course or merge or consolidate with any person or engage in any similar transaction or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company and other than loans to auto dealers in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse Line;
(e) sell, lease, license, encumber or otherwise dispose of any of its assets or any interest therein, other than in the ordinary course (including the disposition of any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring consolidation or other reorganization, other than the Mergers and other than any mergers, consolidations or reorganizations solely among the Company and its Subsidiaries or among the Company’s Subsidiaries;
(fG) incur incur, assume, endorse, guarantee or suffer otherwise become liable for or modify in any material respect the terms of any Indebtedness for borrowed money or issue or sell any debt securities or any rights to exist acquire any debt securities, except for (1) any indebtedness for borrowed money among the Company and its Subsidiaries or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any among Subsidiaries of the foregoingCompany, except (2) guarantees by the Company of Indebtedness for borrowings under borrowed money of Subsidiaries of the Warehouse Line;
(g) make Company or rescind any Tax election or settle or compromise any Tax liability guarantees by Subsidiaries of the Company of Indebtedness for borrowed money of the Company or any of its subsidiaries;
Subsidiaries, which Indebtedness is incurred in compliance with this clause (hG) make or agree is outstanding on the date hereof, (3) Indebtedness for commercial paper or Indebtedness incurred pursuant to make agreements entered into by the Company or any capital expenditures other than Subsidiary of the Company in amounts effect prior to the execution of less than this Agreement, and (4) additional Indebtedness for borrowed money incurred by the Company or any of its Subsidiaries not to exceed $75,000 10,000,000 in aggregate principal amount outstanding, in the aggregate;
case of each of clauses (i2) pay, discharge, settle or satisfy any Claim and (whether absolute, accrued, asserted or unasserted, contingent or otherwise3), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or and consistent with past practice;
(H) other than in accordance with their termscontracts or agreements in effect on the date hereof, sell, transfer, mortgage, encumber or otherwise dispose of Claims whether recognized any of its properties or disclosed assets having a value in excess of $2,000,000 individually or $5,000,000 in the most recent financial statements aggregate to any Person (other than to the Company or the notes thereto) a wholly owned Subsidiary of the Company included and other than (1) sales of inventory, (2) sales of rental equipment in the Company Filed SEC Documents ordinary course or incurred since obsolete or worthless equipment, or (3) commodity, purchase, sale or hedging agreements that can be terminated upon 90 days or less notice without penalty (which term shall not be construed to include customary settlement costs), and power contracts, in each case in the date ordinary course of such financial statements business);
(I) acquire any assets (other than acquisitions of assets in the ordinary course of business except for cash payments or transactions of a type described in any other subsection of this Section 5.1(b) that are not prohibited by such subsection) or any other Person or business of any other Person (xwhether by merger or consolidation, acquisition of stock or assets or by formation of a joint venture or otherwise) paid by or make any insurer or person investment in any Person, in each case other than a wholly owned Subsidiary of the Company and (or any subsidiary assets thereof), either by purchase of stock or securities, contributions to capital, property transfers or purchase of property or assets of any Person other than a wholly owned Subsidiary of the Company, plus (y) an amount paid by the Company if such acquisition or any subsidiary investment is in excess of the Company not exceeding $100,000 per Claim, liability or obligation 2,000,000 individually or $500,000 for all Claims 5,000,000 in the aggregate.;
(jJ) except as required by any Collective Bargaining Agreement or Company Benefit Plan, (i1) modifyestablish, adopt, materially amend or terminate any material contractCompany Benefit Plan or create or enter into any plan, agreement, program, policy, trust, fund or other arrangement that would be a material Company Benefit Plan if it were in existence as of the date of this Agreement, except for adoptions, amendments or terminations in the ordinary course of business that do not materially increase costs, (ii2) increase in any manner the compensation (including severance, change-in-control and retention compensation) or benefits of any current or former employees of the Company or its Subsidiaries, except for increases in the ordinary course of business consistent with past practice, (3) pay or award, or commit to pay or award, any bonuses or incentive compensation, other than in the ordinary course of business consistent with past practice, (4) accelerate any rights or benefits under any Company Benefit Plan, or (5) accelerate the time of vesting or payment of any award under any Company Benefit Plan;
(K) accelerate, terminate or cancel, or waive, release or assign any material rights or claims, (iii) waive the benefits term of, or agree to modify in any mannerright, obligation or claim under, any confidentiality, standstill or similar agreement, or fail to enforce Company Material Contract (other than expiration of any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance Company Material Contract in accordance with its term) or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits Company Material Contract in a manner that is materially adverse to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trustits Subsidiaries, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to in the restrictive provisions thereof and not exempt therefromordinary course;
(mL) take enter into (1) any action Company Lease requiring an annual payment in excess of $2,000,000 or (2) any procurement Contract with continuing obligations for the Company or any of its Subsidiaries which extend more than 12 months from the date of such Contract that is expected to delist involve amounts to be paid by or obligations of, the Shares from NasdaqCompany or any of its Subsidiaries in excess of $2,000,000 in any 12 month period (except, in the case of this clause (2), for agreements of a type described in any other subsection of this Section 5.1(b) that are not prohibited by such subsection);
(nM) make any material change to its methods of accounting in effect on the date hereofloans or advances, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any for operating leases and extensions of its affiliates other than pursuant credit terms to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, other than customers in the ordinary course of business;
(qN) securitize, or create any financing arrangements other than in the nature ordinary course of business, (1) amend any material Tax Return, (2) make, change or revoke any material Tax election, (3) settle or compromise any material Tax claim or assessment by any Governmental Entity for an amount that exceeds (other than by a collateralized debt obligation de minimis amount) the amount reserved, in accordance with respect toGAAP, on the consolidated balance sheet of the Company and its Subsidiaries included in its Annual Report on Form 10-K for the annual period ended December 31, 2017 (4) surrender or waive any accounts receivable, loans right to claim a material Tax refund or other assets(5) consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment;
(rO) amend other than in the ordinary course of business, settle, compromise or modify otherwise resolve any Proceedings (excluding any audit, claim or other proceeding in respect of Taxes) in a manner resulting in liability for, or restrictions on the existing agreement between conduct of business by, the Company or any of its Subsidiaries, other than settlements of, compromises for or resolutions of any Proceedings (1) funded, subject to payment of a deductible, by insurance coverage maintained by the Company or any of its Subsidiaries or (2) for payment of less than $2,500,000 (after taking into account insurance coverage maintained by the Company or any of its Subsidiaries) in the aggregate beyond the amounts reserved on the consolidated financial statements of the Company;
(P) make or commit to make capital expenditures exceeding $2,000,000 individually, other than capital expenditures contemplated in the Company’s capital expenditure budget for the fiscal year ending December 31, 2018, as disclosed to Parent prior to the date hereof; provided, that, in the event the Effective Time has not occurred prior to January 1, 2019, the Company may establish a capital expenditure budget for the fiscal year ending December 31, 2019 in an amount no greater than 110% in the aggregate of the capital expenditure budget for the fiscal year ending December 31, 2018, and Company Financial Advisoralso make or commit to make capital expenditures in accordance with such budget;
(Q) implement or adopt any material change in its tax or financial accounting principles or methods, other than as may be required by GAAP or applicable Law; or
(sR) authorize any ofagree to take, or commit or agree make any commitment to take take, any of, of the foregoing actions that are prohibited pursuant to this Section 5.1(b).
(c) If, during the period from the date hereof until the earlier of the termination of this Agreement in accordance with its terms and the Effective Time, the Company or any action that would result in of its Subsidiaries enters into a breach of any representationSpecified Contract, warranty or agreement of the Company contained in this Agreement as of shall notify Parent reasonably promptly after the date when made or as of any future date or would result thereof, but in any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditionsevent no later than three (3) Business Days thereafter.
Appears in 3 contracts
Samples: Merger Agreement (Synnex Corp), Merger Agreement (Synnex Corp), Merger Agreement (Convergys Corp)
Conduct of the Company’s Business. During (a) Seller agrees that, during the period from the date of this Agreement and continuing until the earlier of the Effective Time and Closing or the date nominees termination of Parent or Subsidiary constitute a majority of the members of the board of trustees this Agreement in accordance with its terms, except as (i) otherwise contemplated hereby, (ii) required by applicable Law, (iii) set forth in Section 4.1 of the Company Disclosure Letter or (such earlier time, the “Control Time”), except either as iv) consented to by Buyer in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company advance (which response consent shall not be unreasonably withheld or delayed), Seller shall cause the Company shall, and shall cause its subsidiaries to, Subsidiaries to conduct its their respective businesses and their business operations in the ordinary course and use commercially reasonable efforts of business and, subject to conduct its and their business relationships with third parties and to keep available the services of their present officers and employeesforegoing, provided shall procure that it does not require additional compensation, and preserve its and their relationships with customers, suppliers and others having business dealings with the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreement. In addition, without limiting the generality of the foregoing, except as expressly permitted in this Agreement, from the date hereof until the Control Time, the Company Subsidiaries shall not, and shall cause its subsidiaries not to:
(a) (i) authorizeauthorize or effect any amendment to or change its certificate of incorporation, declare bylaws or pay equivalent organizational documents;
(ii) issue or authorize the issuance of any dividends on equity interests or make equity securities, or grant any options, warrants, or other distributions in respect rights to purchase or obtain any of its equity securities or issue, sell or otherwise dispose of any of its stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other equity securities;
(b) except in accordance with the Share Option Agreement, issue, deliver, sell, pledge or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other security;
(c) amend or propose to amend its declaration of trust, certificate of incorporation or bylaws (or similar organizational documents);
(d) (i) acquire or agree to acquire any material assets (including securities) outside the ordinary course or merge or consolidate with any person or engage in any similar transaction or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or its Subsidiaries;
(iii) issue any wholly owned subsidiary note, bond, or other debt security, or create, incur, assume or guarantee any Indebtedness or any capitalized lease obligation;
(iv) enter into any Contract or materially amend, renew or modify any existing Contract, in each case, with any Affiliate of the Company and (other than loans to auto dealers in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse Lineits Subsidiaries) or any Significant Customer;
(ev) sell, lease, license, encumber or otherwise dispose of any of its assets or any interest therein, other than in the ordinary course except (including the disposition of any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization;
(fA) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse Line;
(g) make or rescind any Tax election or settle or compromise any Tax liability of the Company or any of its subsidiaries;
(h) make or agree to make any capital expenditures other than in amounts of less than $75,000 in the aggregate;
(i) pay, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(iB) increase pursuant to the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 existing Contracts and retroactive salary adjustments in each case as commitments set forth in Section 6.1(k3.1(n) of the Company Disclosure ScheduleLetter or (C) for distributions of cash to any Affiliate of the Company, sold, leased, transferred or otherwise disposed of any property or assets of the Company or its Subsidiaries;
(lvi) take make any action to exempt capital expenditure, or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trustcommitments therefor, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to excess of $150,000 in the restrictive provisions thereof and not exempt therefromaggregate;
(mvii) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, other than in the ordinary course of business, cancel, compromise or settle any claim, or intentionally waive or release any rights of the Company or its Subsidiaries;
(qviii) securitizeadopt, enter into, amend, alter or create terminate any financing Company Plan or any employment agreement with any Protected Employee or, except for any bonus arrangements made by and which are the obligation of Seller, grant or agree to grant any increase in the nature wages, salary, bonus or other compensation, remuneration or benefits of a collateralized debt obligation with respect toany Protected Employee, except as required under applicable Law, any accounts receivable, loans existing Company Plan or other assetsany existing employment agreement;
(rix) amend make any changes to their accounting principles or modify the existing agreement between Company and Company Financial Advisor; orpractices, other than as may be required by applicable Law or GAAP;
(sx) authorize acquire (by merger, consolidation or acquisition of stock or assets) any ofcorporation, partnership or other business organization or division thereof or collection of assets constituting all or substantially all of a business or business unit; and
(xi) agree or otherwise commit or agree to take any ofof the actions prohibited by the foregoing clauses (i) through (x).
(b) Other than the right to consent or withhold consent with respect to the foregoing matters, nothing contained herein shall give Buyer any right to manage, control, direct or be involved in the management of Seller, the foregoing actions Company, or any action that would result in a breach of any representation, warranty their respective Subsidiaries or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions businesses prior to the Merger not being satisfied or in a material delay in the satisfaction of such conditionsClosing.
Appears in 2 contracts
Samples: Purchase Agreement (Spherion Corp), Purchase Agreement (Cdi Corp)
Conduct of the Company’s Business. During the period from From the date of this Agreement and continuing until the earlier of the Effective Time and Closing or the date nominees termination of Parent or Subsidiary constitute a majority of the members of the board of trustees of the Company (such earlier time, the “Control Time”), except either as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed)this Agreement, the Company shall, and shall cause its subsidiaries to, conduct its business (and their business cause each other Acquired Company to conduct its business) in the ordinary course Ordinary Course, except as otherwise specifically permitted by this Agreement or as reasonably required in order to complete the transactions contemplated by this Agreement or for the Company to perform its obligations under this Agreement or any related agreement, and use commercially reasonable efforts to conduct preserve intact its business organizations and their business relationships with third parties and to keep available the services of their present officers and employees, provided that it does not require additional compensation, and preserve its and their relationships with customers, suppliers and others having business dealings with the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreementparties. In addition, without Without limiting the generality of the foregoing, except as expressly permitted in from the date of this Agreement until the earlier of the Closing or the termination of this Agreement, from except as otherwise specifically permitted by this Agreement or as reasonably required in order to complete the date hereof until transactions contemplated by this Agreement or for the Control TimeCompany to perform its obligations under this Agreement or any related Agreement, the Company shall not, refrain from doing (and shall cause its subsidiaries each other Acquired Company not toto do) any of the following (in the case of each Acquired Company other than the Company, substituting “Acquired Company” for “Company” in the following clauses) without the prior written consent of the Purchaser:
(a) (i) authorize, declare adopting or pay proposing any dividends on or make other distributions change in respect of any of its stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance Organizational Documents of any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securitiesAcquired Company;
(b) except in accordance with the Share Option Agreementadopting a plan or agreement of complete or partial liquidation, issuedissolution, delivermerger, sellconsolidation, pledge restructuring, recapitalization or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other securityreorganization;
(c) amend issuing or propose selling any shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to amend its declaration acquire, any shares of trust, certificate capital stock of incorporation any class or bylaws (or similar organizational documents)series of the Company;
(d) (i) acquire splitting, combining, subdividing or agree to acquire any material assets (including securities) outside reclassifying the ordinary course or merge or consolidate with any person or engage in any similar transaction Company’s outstanding shares of capital stock, or (ii) declaring, setting aside or paying any dividend or other distribution payable in stock or property with respect to the Company’s capital stock (although nothing herein shall be deemed to preclude the Company from declaring cash dividends through the day immediately prior to the Closing Date);
(e) redeeming, purchasing or otherwise acquiring directly or indirectly any shares of capital stock of the Company;
(f) amending the terms (including the terms relating to accelerating the vesting or lapse of repurchase rights or obligations) of any employee or director stock options or other stock-based awards;
(g) (i) granting any severance or termination pay to (or amend any such existing arrangement with) any director, officer or employee of the Company, (ii) entering into any employment, deferred compensation or other similar agreement (or any amendment to any such existing agreement) with any director, officer or employee of the Company, (iii) increasing any benefits payable under any existing severance or termination pay policies or employment agreements, (iv) increasing (or amending the terms of) any compensation, bonus or other benefits payable to directors, officers or employees of the Company outside of the Ordinary Course, or (v) permitting any director, officer or employee who is not already a party to an agreement or a participant in a plan providing benefits upon or following a “change in control” to become a party to any such agreement or a participant in any such plan (although nothing herein shall be deemed to preclude the Company from paying any bonuses or other compensation due and owing to the employees of the Company prior to the Closing in the Ordinary Course);
(h) acquiring any material assets or property of any other Person except in the Ordinary Course;
(i) selling, leasing, licensing or otherwise disposing of any material assets or property except pursuant to existing contracts or commitments or except in the Ordinary Course;
(j) except for any such change which is required by reason of a concurrent change in GAAP, changing any method of accounting or accounting practice used by the Company;
(k) entering into any joint venture, partnership or other similar arrangement;
(l) taking any action that would make any representation or warranty of the Company herein inaccurate in any material respect at, or as of any time prior to, the Closing Date;
(m) making or changing any Tax election, settle any audit or file any amended Tax Returns unless required by applicable Law or unless (x) the Company has given Purchaser prior written notice of such settlement or amended Tax Return, which notice shall include a reasonably complete description of all material terms of such settlement or the reasons for filing such amended Tax Return, as the case may be, and (y) doing so will not affect the Tax liability of any of the Parties for any period commencing after the date of the Merger;
(n) incurring, issuing or assuming any indebtedness, other than ordinary trade payables incurred in the Ordinary Course (it being understood and agreed that the accrual of interest with respect to indebtedness in existence on the date of this Agreement shall not be deemed to be incurrence of indebtedness);
(o) terminating or materially amending any of the Company’s Material Contracts, except in the Ordinary Course;
(p) entering into any new Material Contract other than in the Ordinary Course;
(q) incurring any obligation, the terms of which would be violated by the consummation of the transactions contemplated herein;
(r) making, authorizing or entering into any agreement with respect to any capital expenditures other than capital expenditures not exceeding $50,000 individually or in the aggregate;
(s) making any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company and other than loans to auto dealers in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse Line;
(e) sell, lease, license, encumber or otherwise dispose of any of its assets or any interest therein, Person other than in the ordinary course (including the disposition of any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganizationOrdinary Course;
(ft) incur mortgaging or suffer pledging any of the Company’s assets or properties, tangible or intangible, or creating any Lien with respect to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter asset or property;
(u) entering into any agreement or arrangement that could limit or otherwise restrict the Company from engaging or competing in any line of business or in any geographic area;
(v) terminating any employee or independent contractor of any Acquired Company without cause;
(w) hiring any Person as an employee, or engaging any Person as an independent contractor, of any Acquired Company, except in the Ordinary Course (for purposes of this clause (w), “keep-wellOrdinary Course” includes by way of example, but not in limitation, hiring an employee or other agreement engaging an independent contractor for the purpose of replacing an Employee or independent contractor who has voluntarily resigned);
(x) distributing any cash after the close of business on the day immediately preceding the Closing Date; and
(y) agreeing or committing to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of do any of the foregoing, except for borrowings under the Warehouse Line;
(g) make or rescind any Tax election or settle or compromise any Tax liability of the Company or any of its subsidiaries;
(h) make or agree to make any capital expenditures other than in amounts of less than $75,000 in the aggregate;
(i) pay, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, other than in the ordinary course of business;
(q) securitize, or create any financing arrangements in the nature of a collateralized debt obligation with respect to, any accounts receivable, loans or other assets;
(r) amend or modify the existing agreement between Company and Company Financial Advisor; or
(s) authorize any of, or commit or agree to take any of, the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditions.
Appears in 2 contracts
Samples: Merger Agreement (Metastorm Inc), Stock Purchase Agreement (Metastorm Inc)
Conduct of the Company’s Business. During the period from The Company covenants and agrees that, between the date of this Agreement and continuing until the earlier of the Effective Time and Time, unless Parent shall otherwise consent in writing, the date nominees of Parent or Subsidiary constitute a majority of the members of the board of trustees business of the Company (and the Subsidiaries shall be conducted only in, and such earlier time, the “Control Time”), except either as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response entities shall not be unreasonably delayed)take any action except in, the Company shall, and shall cause its subsidiaries to, conduct its and their business in the ordinary course of business and in a manner consistent with past practice; and the Company and its Subsidiaries will use their commercially reasonable efforts to conduct preserve substantially intact the business organization of the Company and its and their business relationships with third parties and Subsidiaries, to keep available the services of their those of its present officers officers, employees and employees, provided consultants that it does not require additional compensation, are integral to the operation of its business as presently conducted and to preserve the present relationships of the Company and its and their relationships Subsidiaries with customers, suppliers and others having other persons with which the Company and the Subsidiaries have significant business dealings with relations. By way of amplification and not limitation, except as otherwise expressly contemplated by this Agreement, the Company agrees on behalf of itself and its Subsidiaries that, without the prior written consent of Parent, which consent in the case of clauses (b)(iii)-(vii), (c), (d) and (e) below shall not be unreasonably withheld or delayed, each of the Company and its subsidiariesSubsidiaries will, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreement. In addition, without limiting the generality of the foregoing, except as expressly permitted in this Agreement, from between the date hereof until of this Agreement and the Control Effective Time, the Company shall not, and shall cause its subsidiaries not to:
(a) not, directly or indirectly, do any of the following: (i) authorize, declare amend or pay any dividends on propose to amend its charter documents or make other distributions in respect of any of its stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), by-laws; (ii) split, combine or reclassify any outstanding shares of its stock capital stock, or issue declare, set aside or authorize pay any dividend payable in cash, stock, property or propose the issuance of any other securities or otherwise with respect to such shares; (iii) repurchaseredeem, redeem purchase, acquire or otherwise offer to acquire any shares of its capital stock; (iv) issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or securities convertible or exchangeable for, or any options, warrants or rights of any kind to acquire any shares of, its capital stock of any class or other property or assets whether pursuant to any rights agreement, stock option plans described in the Company Schedule or otherwise, provided that the Company may issue shares of Company Common Stock pursuant to currently outstanding options or employee stock purchases referred to in the Company Schedule in response to Section 2.3 above and the Company may issue options pursuant to the Company Option Plan in amounts and on terms consistent with past practice, provided that such option grants do not exceed 50,000 shares in the aggregate; (v) accelerate, amend or change the period of exerciseability of options or restricted stock granted under any of the Company Stock Plans or authorize cash payments in exchange for any options granted under any of such plans except as required by the terms of such plans or any related agreements in effect as of its subsidiaries the date of this Agreement; (vi) except as set forth in Section 2.26(b) in connection with the transactions contemplated by this Agreement, amend the Rights Agreement or redeem the rights issued pursuant thereto; or (vii) enter into any other securities thereof contract, agreement, commitment or arrangement with respect to any rights, warrants or options to acquire any such shares or other securitiesof the matters set forth in this paragraph (a);
(b) except in accordance with the Share Option Agreementnot, issuedirectly or indirectly, deliver, sell, pledge or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other security;
(c) amend or propose to amend its declaration of trust, certificate of incorporation or bylaws (or similar organizational documents);
(d) (i) acquire (by merger, consolidation or agree to acquire acquisition of stock or assets) any material assets (including securities) outside the ordinary course corporation, partnership, limited liability company or merge other business organization or consolidate with division thereof or make any person or engage in any similar transaction or equity investments therein; (ii) make issue, sell, pledge, dispose of or encumber any loansassets (including, advances without limitation, licenses, Authorizations or capital contributions to, or investments in, any other person, other than to rights) of the Company or any wholly owned subsidiary the Subsidiaries (except for (A) purchases or sales of the Company and other than loans to auto dealers inventory in the ordinary course of business which wouldand in a manner consistent with past practice, when originated(B) dispositions of obsolete or worthless inventory, qualify as Eligible Receivables under the Warehouse Line;
(eC) sell, lease, license, encumber purchases or otherwise dispose sales of any immaterial assets not in excess of its assets or any interest therein, other than $50,000 in the ordinary course aggregate and (including D) as set forth in the disposition of Company Schedule) or enter into any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization;
securitization transactions; (fiii) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee issue any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having securities exceeding $50,000 in the economic effect of any of the foregoing, aggregate except for borrowings and reborrowings under the Warehouse Line;
Company's existing credit facility in the ordinary course of business and consistent with past practice and except as set forth in the Company Schedule, (giv) make any commitments or rescind any Tax election agreements for capital expenditures or settle capital additions or compromise any Tax liability betterments exceeding in the aggregate $50,000 except such as may be involved in ordinary repair, maintenance or replacement of its assets or except as set forth in the Company Schedule; (v) enter into or modify any of its subsidiaries;
(h) make material contract, lease or agree to make any capital expenditures other than in amounts of less than $75,000 agreement except in the aggregate;
ordinary course of business and consistent with past practice or except as set forth in the Company Schedule; (ivi) payterminate, dischargemodify, settle assign, waive, release or satisfy relinquish any Claim (whether absolute, accrued, asserted material contract rights or unasserted, contingent amend any material rights or otherwise), other than the payment, discharge, settlement or satisfaction, claims not in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance as expressly provided herein; or (ivvii) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts contract, agreement, commitment or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations arrangement with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing matters set forth in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Scheduleb);
(lc) take not, directly or indirectly, (i) initiate any action to exempt litigation or make not subject to or to otherwise waive or cause to be inapplicable arbitration proceeding; (xii) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with revalue any of its affiliates other than pursuant to arrangements in effect on assets, including writing down the date hereof which have been disclosed to Parent;
(p) accelerate the collection value of receivables inventory or defer the payment of payables, writing off notes or modify the payment terms of any receivables or payables, in each caseaccounts receivable, other than in the ordinary course of businessbusiness pursuant to arm's length transactions on commercially reasonable terms; (iii) make any material change to its accounting methods, principles or practices except as required by a change in GAAP occurring after the date hereof; or (iv) settle or compromise any Tax liability for an amount in excess of $25,000 or, on any Tax Return, take any position, make any election or adopt any method that is inconsistent with positions taken, elections made or methods used in similar Tax Returns in prior periods;
(qd) securitizenot, directly or indirectly, (i) grant any increase in the salary or other compensation of its employees except in the ordinary course of business and consistent with past practice or grant any bonus to any employee or enter into any employment agreement or make any loan to or enter into any material transaction of any other nature with any officer or employee of the Company; (ii) take any action to institute any new severance or termination pay practices with respect to any directors, officers or employees of the Company or to increase the benefits payable under its severance or termination pay practices; or (iii) adopt or amend, in any respect, except as may be required by applicable law or regulation, any bonus, profit sharing, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund, plan or arrangement for the benefit or welfare of any directors, officers or employees except as set forth in the Company Schedule; and
(e) not, directly or indirectly, take (and will use reasonable efforts to prevent any affiliate of the Company from taking) or agree in writing or otherwise to take, (i) any of the actions described in this Section 4.1; (ii) any action which would make any of the Company's representations or warranties in this Agreement, if made on and as of the date of such action or agreement, untrue or incorrect in any material respect; (iii) any action which could prevent it from performing, or create any financing arrangements in the nature of a collateralized debt obligation with respect tocause it not to perform, any accounts receivable, loans or other assets;
its obligations under this Agreement; (riv) amend or modify the existing agreement between Company and Company Financial Advisor; or
(s) authorize any of, or commit or agree to take any of, the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions to cause the Merger not being satisfied to be treated as a reorganization within the meaning of Section 368(a) of the Code; or in (v) any action that would prevent or impede the Merger from qualifying as a material delay in the satisfaction "pooling of such conditionsinterests" for accounting purposes.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Zany Brainy Inc), Merger Agreement (Zany Brainy Inc)
Conduct of the Company’s Business. During the period from From the date of this Agreement and continuing until through the earlier of the Effective Time Closing and the date nominees termination of Parent or Subsidiary constitute a majority of the members of the board of trustees of the Company this Agreement in accordance with Article X (such earlier time, the “Control TimeInterim Period”), except either (i) for matters set forth in Section 8.01 of the Company Disclosure Schedule, (ii) for matters otherwise permitted or required by the terms of this Agreement, (iii) in response to or related to any Contagion Event or any change in Law or policy (including guidelines and directives of industry groups) relating to any Contagion Event, (iv) as required by applicable Law or (v) as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company Purchaser (which response consent shall not be unreasonably delayedwithheld, delayed or conditioned), (1) the Company shall, and shall cause its subsidiaries to, conduct its and their business in the ordinary course and use commercially reasonable efforts to conduct the Business in the ordinary course of business consistent with past practice in all material respects (including, for the avoidance of doubt, recent past practice in light of COVID-19; provided that, any action taken, or omitted to be taken, in good faith that relates to, or arises out of, COVID-19 shall be deemed to be in the ordinary course of business, and notwithstanding anything to the contrary contained herein, nothing herein shall prevent the Company or any of its and their business relationships with third parties Subsidiaries from taking or failing to take any action in good faith, including the establishment of any policy, procedure or protocol, in response to COVID-19 or any COVID-19 Measures), to keep intact the Business in all material respects and to keep available the services of their present officers and employees, provided that it does not require additional compensation, and preserve its and their relationships with customers, material customers and suppliers and others having business dealings with the Company and its subsidiarieswhom they currently deal in all material respects, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreement. In addition, without limiting the generality of the foregoing, except as expressly permitted in this Agreement, from the date hereof until the Control Time, (2) the Company shall not, and shall cause not permit any of its subsidiaries not operating Subsidiaries to, do any of the following:
(a) (i) authorize, declare or pay any dividends on or make other distributions in respect of any of amend its stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securitiesOrganizational Documents;
(b) except incur any Indebtedness for borrowed money or issue any debt securities, other than (i) Indebtedness between the Company and any of its Subsidiaries or between one Subsidiary of the Company and another Subsidiary of the Company, (ii) Indebtedness incurred in accordance the ordinary course of business, (iii) Indebtedness incurred under instruments of Indebtedness existing as of the date hereof, (iv) Indebtedness that will be repaid on or before the Closing Date, (v) Indebtedness incurred in connection with the Share Option Agreement, issue, deliver, sell, pledge Company’s lending business (including any such Indebtedness that gives rise to an Encumbrance contemplated by clause (iv) of the definition of “Permitted Encumbrances”) or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any (vi) other securityIndebtedness in an aggregate amount not to exceed $150,000,000;
(c) amend create any Encumbrances on any of the assets material to the Company and its Subsidiaries (other than Permitted Encumbrances), other than as required by instruments of Indebtedness existing as of the date hereof or propose to amend its declaration of trust, certificate of incorporation or bylaws (or similar organizational documentsany Indebtedness incurred after the date hereof permitted in accordance with Section 8.01(b);
(d) (i) acquire or agree to acquire make any material assets (including securities) outside the ordinary course or merge or consolidate with any person or engage change in any similar transaction or (ii) make any loans, advances or capital contributions to, or investments in, any other personaccounting methods, other than to the Company as required by GAAP (or any wholly owned subsidiary interpretation thereof), including pursuant to standards, guidelines and interpretations of the Company and Financial Accounting Standards Board or any similar organization;
(e) other than loans to auto dealers in the ordinary course of business which wouldbusiness, when originated(i) make or change any material Tax election, qualify (ii) adopt or change any accounting method with respect to Taxes other than as Eligible Receivables under required by GAAP (or any interpretation thereof), including pursuant to standards, guidelines and interpretations of the Warehouse LineFinancial Accounting Standards Board or any similar organization, (iii) surrender any right to claim a refund of material Taxes or (iv) consent to any extension or waiver of the limitations period applicable to any material Tax claim or assessment;
(ef) sell, leaseassign, transfer, exclusively license, encumber allow to expire or lapse or otherwise dispose of any of the properties, rights or assets that are material, individually or in the aggregate, to the Company and its assets or any interest thereinSubsidiaries taken together as a whole, other than (A) properties, rights or assets having a value not in excess of $50,000,000 in the aggregate, and (B) properties, rights or assets (including loans, Mortgage Servicing Rights or interests therein) in the ordinary course of business;
(including g) with respect to the disposition of any assets acquired as a result of a foreclosure)Company only, reclassify, combine, split, subdivide or redeem, or purchase or otherwise acquire, directly or indirectly, any of the Company’s capital stock;
(h) except with respect to wholly owned Subsidiaries of the Company, adopt a plan of complete or partial liquidation, dissolution, merger, consolidationdivision transaction, restructuring consolidation or other reorganization;
(f) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse Line;
(g) make or rescind any Tax election or settle or compromise any Tax liability of the Company or any of its subsidiaries;
(h) make or agree to make any capital expenditures other than in amounts of less than $75,000 in the aggregaterecapitalization;
(i) pay, discharge, settle grant any equity or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course equity based compensation awards outside of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, other than in the ordinary course of business;
(q) securitize, or create any financing arrangements in the nature of a collateralized debt obligation with respect to, any accounts receivable, loans or other assets;
(r) amend or modify the existing agreement between Company and Company Financial Advisor; or
(sj) authorize any of, or commit or agree to take take, whether in writing or otherwise, any of, the foregoing actions actions. Notwithstanding anything to the contrary in this Section 8.01, during the Interim Period, the Company may, and may permit its Subsidiaries to, declare and pay any dividends or any action that would result in a breach of any representation, warranty other distributions to the direct or agreement indirect equityholders of the Company contained or its Subsidiaries, or redeem or repurchase any equity securities in this Agreement the Company or its Subsidiaries, in each case, so long as, after giving effect to such dividends, distributions, redemptions and repurchases but before giving effect to the payment of any Outstanding Company Expenses or Outstanding Purchaser Expenses (or amounts that would have been Outstanding Company Expenses or Outstanding Purchaser Expenses except they were paid prior to the Closing), the cash held by the Company and its Subsidiaries as of the date when made or as of any future date or would result in any last day of the conditions month in which the Closing is expected to the Merger not being satisfied or in a material delay in the satisfaction of such conditionsoccur would reasonably be expected to be equal to at least $250,000,000.
Appears in 2 contracts
Samples: Transaction Agreement (Replay Acquisition LLC), Transaction Agreement (Replay Acquisition Corp.)
Conduct of the Company’s Business. During The Company agrees that, during the period from the date of this Agreement and continuing until the earlier of the Effective Time Closing and the date nominees termination of Parent or Subsidiary constitute a majority of the members of the board of trustees of the Company (such earlier time, the “Control Time”)this Agreement pursuant to its terms, except either as (a) otherwise expressly permitted or required under or by this Agreement, (b) consented to by ILDE in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response consent shall not be unreasonably withheld, conditioned or delayed)) or (c) required by any Law, the Company shall, and shall cause its subsidiaries toto the extent reasonably practicable, conduct its and their business in the ordinary course in substantially the same manner as conducted as of the date of this Agreement, preserve its business organization intact in all material respects, maintain its capital structure (including as to its issued and outstanding share capital) in all material respects and use commercially reasonable efforts to conduct its and their business relationships with third parties and to keep available the services of their present officers its Chief Executive Officer, Chief Financial Officer and employees, provided that it does not require additional compensation, and preserve its and their relationships with customers, suppliers and others having business dealings with the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreementauditors. In addition, without limiting the generality of Notwithstanding the foregoing, except as expressly permitted in this Agreement, from the date hereof of this Agreement until the Control Timeearlier of the Closing and the termination of this Agreement pursuant to its terms, the Company shall not, and without the prior written consent of ILDE (which consent shall cause its subsidiaries not to:be unreasonably withheld, conditioned or delayed):
(a) (i) authorize, declare or pay any dividends on or make other distributions in respect of any of its stock (except for dividends by a wholly owned subsidiary increase the number of the Company Company’s directors to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), than five (ii5) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securitiesdirectors;
(b) except in accordance with declare or pay any dividend or other distribution of cash, shares or other assets, other than the Share Option Agreementdistribution of bonus shares to all stockholders of the Company, issue, deliver, sell, pledge or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other securityon a pro-rata basis;
(c) amend or propose to amend its declaration of trust, certificate of incorporation or bylaws (or similar organizational documents);
(d) (i) acquire or agree to acquire any material assets (including securities) outside the ordinary course or merge or consolidate with any person or engage in any similar transaction or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company and other than loans to auto dealers in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse Line;
(e) sell, lease, license, encumber or otherwise dispose of any of its assets or any interest therein, other than in the ordinary course (including the disposition of any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization;
(f) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse Line;
(g) make or rescind any Tax election or settle or compromise any Tax liability of the Company or any of its subsidiaries;
(h) make or agree to make any capital expenditures other than in amounts of less than $75,000 in the aggregate;
(i) pay, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on Affiliates (including a transaction with any significant stockholder of the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payablesCompany, or modify the payment terms of any receivables or payables, in each case, which such stockholder is an interested party) other than in the ordinary course of business;
(qd) securitize, or create make any financing arrangements in the nature of a collateralized debt obligation with respect to, any accounts receivable, loans or advances to employees of the Company, other assetsthan travel advances not in excess of $10,000;
(re) amend create any mortgage, pledge or modify other security interest on any of the existing Company’s assets other than in the ordinary course of business;
(f) sell any of the Company’s assets located in Israel or Colombia or any other material asset (provided that the foregoing shall not apply to sales of the Company’s assets located in India or interests therein pursuant to an agreement between or letter of intent in effect as of the date hereof);
(g) acquire any entity or business;
(h) incur or assume any Indebtedness in excess of $1,000,000 (whether in a single transaction or a series of related transactions);
(i) grant any material increase in the compensation payable or to become payable by the Company and Company Financial Advisorto any of its officers or directors; or
(sj) authorize issue any of, or commit or agree securities to take any of, the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions Company’s officers or directors (other than any stock-based compensation required to the Merger not being satisfied or in a material delay be issued pursuant to preexisting arrangements previously disclosed in the satisfaction of such conditionsCompany SEC Reports).
Appears in 2 contracts
Samples: Securities Purchase and Exchange Agreement (Geoglobal Resources Inc.), Securities Purchase and Exchange Agreement (Israel Land Development Company- Energy Ltd.)
Conduct of the Company’s Business. During (a) Each of the period Shareholders and the Company agree that from the date of this Agreement and continuing until the earlier of the Effective Time and the date nominees of Parent or Subsidiary constitute a majority of the members of the board of trustees of the Company (such earlier time, the “Control Time”), except either as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed)Closing Date, the Company shall, and shall cause its subsidiaries to, :
(i) continue to conduct its business and their business operations in the ordinary course and usual course;
(ii) continue to exercise the same degree of care that it has previously exercised with respect to its business;
(iii) use its commercially reasonable efforts to conduct its and their business maintain existing relationships with third parties and to keep available the services of their present officers and employees, provided that it does not require additional compensation, and preserve its and their relationships with customers, suppliers processors, employees and others having other parties with whom it has business dealings relationships;
(iv) deliver unaudited updates to the Interim Financial Statements to the Purchaser promptly after the end of each calendar month and audited statements at fiscal year end;
(v) promptly notify the Purchaser of any development which could have a Material Adverse Effect; and
(vi) cooperate with Purchaser to facilitate a smooth transition of ownership of the Company.
(b) Each of the Shareholders and the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreement. In addition, without limiting the generality of the foregoing, except as expressly permitted in this Agreementagree that, from the date hereof of this Agreement until the Control TimeClosing Date, the Company shall not, and shall cause its subsidiaries not towithout the prior written consent of the Purchaser:
(a) (i) authorizeauthorize or effect any change in its charter, declare articles of incorporation or pay bylaws;
(ii) grant any dividends on options, warrants, or make other distributions in respect of rights to purchase or obtain any of its stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(b) except in accordance with the Share Option Agreement, issue, deliver, sell, pledge or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other security;
(c) amend or propose to amend its declaration of trust, certificate of incorporation or bylaws (or similar organizational documents);
(d) (i) acquire or agree to acquire any material assets (including securities) outside the ordinary course or merge or consolidate with any person or engage in any similar transaction or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company and other than loans to auto dealers in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse Line;
(e) sell, lease, license, encumber sell or otherwise dispose of any of its assets or any interest therein, other than in the ordinary course (including the disposition of any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganizationcapital stock;
(fiii) incur declare, set aside, or suffer pay any dividend or distribution with respect to exist its capital stock, in cash or in kind, or redeem, repurchase, or otherwise acquire any of its capital stock;
(iv) issue any note, bond, or other debt security or create, incur, assume, or guarantee any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse Linecapitalized lease obligations;
(gv) make or rescind impose any Tax election or settle or compromise any Tax liability of the Company or security interest upon any of its subsidiariesassets;
(hvi) make or agree to make any capital expenditures other than in amounts of less than $75,000 in the aggregate;
(i) payinvestment in, discharge, settle or satisfy make any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits ofloan to, or agree to modify in any manner, any confidentiality, standstill acquire the securities or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits assets of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, other than in person outside the ordinary course of business;
(qvii) securitizemake any change in employment terms for any of its directors, or create any financing arrangements in the nature of a collateralized debt obligation with respect to, any accounts receivable, loans or other assetsofficers and employees;
(rviii) amend cancel, compromise or modify settle any material claim, or waive or release any rights of the existing agreement between Company;
(ix) contribute any amounts, other than employee elective contributions, to the Company Plan;
(x) engage in any practice, take any action, or enter into any transaction outside the ordinary course of business;
(xi) except in the ordinary course of business, make application for the opening, relocation or closing of any, or open, relocate or close any, office or loan production or servicing facility;
(xii) make or acquire any loan or issue a commitment for any loan except for loans and Company Financial Advisorcommitments that are made in the ordinary course of business consistent with past practice, or agree to guarantee the obligations of any other persons; or
(sxiii) authorize enter into any of, or commit or agree to take any of, the foregoing actions or any action that would result in a breach securitizations of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditionsloans.
Appears in 1 contract
Samples: Stock Purchase Agreement (Lahaina Acquisitions Inc)
Conduct of the Company’s Business. During Except as expressly provided for by this Agreement, during the period from the date of this Agreement and continuing until Effective Date to the earlier Closing Date, Seller will cause each of the Effective Time Companies and the date nominees of Parent or Subsidiary constitute a majority Subsidiaries to, and each of the members of Companies and the board of trustees of the Company (such earlier time, the “Control Time”), except either as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed), the Company shall, and shall cause its subsidiaries to, Subsidiaries will conduct its and their business and operations solely in the ordinary course and use commercially reasonable efforts to conduct its and their of business relationships consistent with third parties and to keep available the services of their present officers and employees, provided that it does not require additional compensation, and preserve its and their relationships with customers, suppliers and others having business dealings with the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreementpast practice. In addition, without Without limiting the generality of the foregoing, except as expressly permitted in provided by this Agreement, during the period from the date hereof until of this Agreement to the Control TimeClosing Date, without the prior written consent of Buyer, Seller will cause each Company shall notand Subsidiary not to, and shall cause its subsidiaries not toeach of the Companies and Subsidiaries will not:
(a) (i) authorize, declare or pay make any dividends on or make other distributions capital expenditure exceeding $50,000 in respect of any of its stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securitiesaggregate;
(b) enter into or assume any Material Contract except in accordance the ordinary course of business consistent with past practice, and amend or terminate any Material Contract to which any of the Share Option Agreement, issue, deliver, sell, pledge Companies or encumber, Subsidiaries is a party or authorize by which any of the Companies or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock Subsidiaries or any other securityof the property of any of the Companies or Subsidiaries is or may be bound;
(c) amend change any of its accounting methods or propose to amend its declaration of trust, certificate of incorporation practices (including any change in depreciation or bylaws (amortization policies or similar organizational documentsrates);
(d) make any election or change any election concerning Taxes, adopt or change any Tax accounting method or practice, or change any Tax accounting period;
(ie) acquire make any revaluation any of its assets for book or Tax purposes or for any fluctuations in exchange rates with respect to foreign currencies;
(f) increase the salary or other compensation or benefits of, or pay or agree to acquire pay any material assets bonus or other additional salary or other compensation or benefit to (including securities) outside the ordinary course severance or merge termination pay), present or consolidate with any person former directors, officers, employees, consultants or engage contractors (including photographers), except increases in any similar transaction or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary compensation granted as part of the Company and other than loans to auto dealers annual staff reviews consistent with past practices;
(g) except for any sale or disposal of used Equipment, the net book value of which is $50,000 or less in the aggregate, sell, lease or otherwise dispose or transfer any property, except for nonexclusive licenses of Images in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse Lineconsistent with past practice for fair consideration;
(eh) sellcreate, leaseincur, licensesatisfy, encumber extinguish, assume or otherwise dispose guarantee any Debt, or make or take out any loans to or from any Person, or guaranty any Debt or other obligations of any of its assets or any interest thereinPerson, other than in the ordinary course (including the disposition of any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganizationbusiness and consistent with past practice;
(fi) incur waive or suffer to exist release any indebtedness for borrowed money right, claim or guarantee defense except in the ordinary course of business consistent with past practice and in an aggregate amount not exceeding $50,000;
(j) make any such indebtednessdividend, guarantee any debt of others, enter into any “keep-well” distribution or other agreement payment in respect of its Equity Securities to maintain Seller or any financial statement condition directors, officers, employees, Affiliates or shareholders of another person Seller, in each case in any form, or any accrual in respect of the same,
(k) make any other fee, payment or reimbursement to Seller or any director, officer, employee, Affiliate or shareholder of Seller by any of the Companies or Subsidiaries, in each case in any form, or any accrual in respect of the same, except for fees, payments or reimbursements on an arm’s length basis that are consistent with past practice and in the ordinary course of business;
(l) issue, sell or deliver, redeem or purchase, any of its Equity Securities, or grant, issue or enter into any arrangement having options, warrants, rights, agreements or commitments with respect to the economic effect issuance of its Equity Securities, or amend any terms of any such Equity Securities or agreements;
(m) allow the imposition of any Lien (other than a Permitted Lien and any non-exclusive licenses or sublicenses relating to the Images entered into in the ordinary course of business consistent with past practice) on any property of any of the foregoing, except for borrowings under the Warehouse LineCompanies or Subsidiaries;
(gn) make change the timing for payment, practices or rescind procedures with respect to the payment of trade payables or other obligations of any Tax election or settle or compromise any Tax liability of the Company Companies or any Subsidiaries or the collection of its subsidiariesaccounts receivable and revenues (whether by way of acceleration of collections or otherwise);
(ho) make transact business other than in the ordinary course consistent with past practice;
(p) fail to pay its creditors within the times agreed with such creditors or allow any Debt to become overdue for payment;
(q) prepay, or allow any event to occur that would give rise to a liability to repay, any indebtedness with a value of $50,000 or more in the aggregate in advance of its stated maturity;
(r) acquire or agree to make acquire by merging or consolidating with, or by purchasing the Equity Securities or a substantial portion of the assets of, or by any capital expenditures other than manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets with a value in amounts excess of less than $75,000 50,000 in the aggregate;
(is) pay, discharge, settle enter into any exclusive license or satisfy any Claim (whether absolute, accrued, asserted other license or unasserted, contingent arrangement with respect to Images or otherwise), other than the payment, discharge, settlement or satisfaction, in Intellectual Property rights outside the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(lt) take dispose or allow to lapse any action rights to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions use of any Takeover Statute Intellectual Property, or (y) Section 7.2 of the Declaration of Trust, in each case dispose or disclose to any individual or entity (other than Parent or its subsidiaries), or Person any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and Intellectual Property not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods theretofore a matter of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each casepublic knowledge, other than in the ordinary course of business;
(q) securitize, or create any financing arrangements in the nature of a collateralized debt obligation with respect to, any accounts receivable, loans or other assets;
(r) amend or modify the existing agreement between Company and Company Financial Advisor; or
(su) authorize any ofagree, whether in writing or commit or agree otherwise, to take any of, the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in do any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditionsforegoing.
Appears in 1 contract
Conduct of the Company’s Business. During Except as set forth in Section 5.1 of the Company Disclosure Letter, as otherwise expressly contemplated by this Agreement or as consented to in writing by the Parent, during the period from the date of this Agreement and continuing until the earlier of to the Effective Time and the date nominees of Parent or Subsidiary constitute a majority of the members of the board of trustees of the Company (such earlier time, the “Control Time”), except either as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed), the Company shall, and shall cause each of its subsidiaries Subsidiaries to, conduct its and (i) carry on their business respective businesses in the ordinary course and consistent with past practice, (ii) use commercially reasonable efforts to conduct its preserve intact their business, (iii) use commercially reasonable efforts to maintain their Company Material Contracts, (iv) maintain their Company Permits and Company Intellectual Property and other material rights, (v) maintain and keep their assets in good repair and condition, ordinary wear and tear excepted, (vi) maintain supplies and inventories in quantities consistent with their customary business relationships with third parties and practice, (vii) use commercially reasonably efforts to keep available retain the services of their present respective officers and employees, provided that it does not require additional compensation, key employees and preserve its and (viii) use commercially reasonable efforts to maintain their relationships with customers, their customers and suppliers and others having business dealings with the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject them to the terms of or contemplated by this Agreementend that their goodwill and ongoing businesses shall not be impaired in any material respect at the Effective Time. In addition, without Without limiting the generality of the foregoingforegoing (but subject to the above exceptions), except as expressly permitted in this Agreement, during the period from the date hereof until of this Agreement to the Control Effective Time, the Company shall not, and shall cause not permit any of its subsidiaries not Subsidiaries, without the written consent of the Parent to:
(a) other than dividends and distributions (iincluding liquidating distributions) authorize, declare or pay any dividends on or make other distributions in respect of any of its stock (except for dividends by a wholly direct or indirect wholly-owned subsidiary Subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualificationparent, avoid the incurrence of (i) declare, set aside or pay any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Codedividends on, or avoid the need to make one any other distributions (whether in cash, stock, property or more extraordinary or disproportionately larger distributions to meet otherwise) in respect of, any of the three preceding objectives)its capital stock, (ii) split, combine or reclassify any of its 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 capital stock, (iii) repurchaseadopt a plan with respect to or effect any liquidation, dissolution, restructuring, reorganization or recapitalization of the Company or (iv) purchase, redeem or otherwise acquire acquire, or agree to purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Company or any of its subsidiaries Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities, (other than pursuant to the exercise of existing stock repurchase rights listed in SECTION 3.3 of the Company Disclosure Letter);
(b) except in accordance with the Share Option Agreement, issue, deliver, sell, pledge or encumber, otherwise encumber or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, subject to any Lien any shares of its beneficial interestscapital stock, stock any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities, other securitythan (i) the issuance of Company Stock Options granted consistent with past practice to new employees (other than officers) of the Company; provided that each such Company Stock Option shall have an exercise price per share equal to the closing price per share of Company Common Stock on the grant date, shall have standard vesting provisions in conformity with customary practice and shall not have any provisions which accelerate in whole or in part the vesting or exercisability of such option in connection with the Closing of this Agreement or the performance of any duties or transactions required hereunder or any termination of service at or at any time following the Merger, (ii) the issuance of Company Common Stock upon the exercise of the Company Stock Options, outstanding as of the date hereof in accordance with their present terms, or upon the exercise of the Company Stock Options referred to in clause (i) in accordance with their terms, or (ii) the issuance of shares of Company Common Stock pursuant to the Company Stock Plans in accordance with its present terms and not in violation of this Agreement;
(c) amend or propose to amend its declaration of trust, certificate of incorporation incorporation, bylaws or bylaws (or similar other comparable organizational documents);
(d) (i) acquire or agree to acquire by merging or consolidating with, by purchasing all or substantially all of the assets of, by purchasing equity interests in or a portion of the assets of, by forming a partnership or joint venture, or by any material other manner, any business or any Person or any division thereof;
(e) sell, lease, exchange, license, pledge, transfer, sell and leaseback, mortgage or otherwise encumber or subject to any Lien (other than Permitted Liens) or otherwise dispose of, or agree to sell, lease, exchange, license, pledge, transfer, sell and leaseback, mortgage or otherwise encumber or subject to any Lien (other than Permitted Liens) or otherwise dispose of, any of its properties or assets (including securities) outside securitizations), other than in the ordinary course of business consistent with past practice, and provided further that the Company shall not sell its raw land located in California, milk production operations located in Maryland or merge milk production operations and related land located in Idaho (all of which land and operations are referred to herein as the "Company Sale Properties") without the prior written consent of the Parent;
(f) (i) purchase, prepay or consolidate with incur any person indebtedness for borrowed money or engage in guarantee any similar transaction such indebtedness of another Person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its Subsidiaries, guarantee any debt securities of another Person, enter into any "keep well" or other Contract to maintain any financial statement condition of another Person or enter into any Contract having the economic effect of any of the foregoing, except for intercompany indebtedness between the Company and any of its wholly-owned Subsidiaries or between such Subsidiaries or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company and other than loans to auto dealers in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse Line;
(e) sell, lease, license, encumber or otherwise dispose of any of its assets or any interest therein, other than in the ordinary course (including the disposition of any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization;
(f) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse LinePerson;
(g) make or rescind agree to make any new capital expenditures which, individually, are in excess of $100,000 or, in the aggregate, are in excess of $500,000 or enter into any commitment for the purchase, lease or use of any real property;
(h) make any Tax election that, individually or settle or compromise in the aggregate, would reasonably be expected to adversely affect in any material respect the Tax liability or Tax attributes of the Company or any of its subsidiaries;
(h) make Subsidiaries or agree to make settle or compromise any capital expenditures other than in amounts of less than $75,000 in the aggregatematerial income Tax liability;
(i) (A) pay, discharge, settle or satisfy any Claim material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), or Litigation (whether or not commenced prior to the date of this Agreement) other than (1) the payment of an aggregate of $100,000 in connection with Litigation, or (2) the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of Claims whether liabilities recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred in the ordinary course of business consistent with past practices since the date of such financial statements in the ordinary course of business except for cash payments statements, or (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iiiB) waive the benefits of, or agree to modify in any manner, terminate, release any Person from or fail to enforce any confidentiality, standstill or similar agreement, Contract to which the Company or fail to enforce any such agreement to of its Subsidiaries is a party or of which the fullest extent practicable, including by seeking injunctive relief and specific performance Company or (iv) except, with respect to this clause (iv), any of its Subsidiaries is a beneficiary in the ordinary course of business, enter into any material contracts or transactionsrespect;
(ij) increase the compensation except as required by law or benefits of any directorcontemplated hereby, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, establish, adopt or amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under terminate any Benefit Plan or compensation agreement any other Contract, plan or arrangement; policy involving the Company or change any actuarial of its Subsidiaries, and one or other assumption used to calculate funding obligations with respect to any pension plan more of its directors, officers or employees, or change the timing or manner in which contributions to any pension plan Benefit Plan are made or the basis on which such contributions are determined determined;
(k) except for normal increases relating to non-officer employees in the ordinary course of business consistent with past practice or as required by the terms of any employment agreement (viwhich does not constitute a violation of this Agreement), (i) take any action that could give rise increase the compensation, deferred compensation or termination pay payable to severance benefits or to become payable to any director, officer, trusteeother employee, agent or consultant or pay any benefit or amount not required by a Benefit Plan as in effect on the date of this Agreement to any such Person other than increases resulting from the operation of compensation arrangements in effect prior to the date hereof or (ii) grant any severance (other than in the ordinary course and consistent with past practice pursuant to the normal severance policy as in effect on the date of this Agreement) to, or enter into or amend any employment or severance agreement with, any director, officer, employee, agent or employee consultant of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Scheduleits Subsidiaries;
(l) take enter into any action to exempt material operating lease or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity incur (other than Parent in the ordinary course of business consistent with past practice) any material liability or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject material obligation not required by GAAP to be recorded on the restrictive provisions thereof and not exempt therefromCompany's consolidated balance sheet at the time of incurrence;
(m) take any action manage its cash, cash equivalents and working capital except in accordance with past practices (which practices include applying commercially reasonable efforts to delist the Shares from Nasdaqcollect receivables and not paying liabilities or other obligations until they become due and payable);
(n) make transfer or license to any material change Person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property of the Company or its methods Subsidiaries, and in no event shall the Company or any of accounting in effect its Subsidiaries license on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, an exclusive basis or change its fiscal yearsell any Company Intellectual Property;
(o) enter into or amend any transaction with any of its affiliates other than Contract pursuant to arrangements in effect on which any Person is granted a material exclusive marketing, manufacturing or other rights with respect to any product, service, process or technology of the date hereof which have been disclosed to ParentCompany or its Subsidiaries;
(p) accelerate enter into any arrangement, agreement or contract (i) that could, after the collection Effective Time, restrict the Parent or any of receivables its Affiliates or defer any successor thereto, from engaging or competing in any line of business or in any geographic area; (ii) that has a term exceeding one year or (iii) that would be a Company Material Contract had such contract been in existence on the payment of payables, or modify the payment terms of any receivables or payables, in each case, other than in the ordinary course of businessdate hereof;
(q) securitizeenter into any Contract which, or create any financing arrangements if it were in existence on the nature date of a collateralized debt obligation with respect tothis Agreement, any accounts receivable, loans or other assets;would be required to be disclosed pursuant to Section 3.9; or
(r) amend or modify the existing agreement between Company and Company Financial Advisor; or
(s) authorize any ofauthorize, or commit or agree to take any of, of the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditionsactions.
Appears in 1 contract
Samples: Merger Agreement (Dean Foods Co/)
Conduct of the Company’s Business. During (a) From the period from Execution Date through the date of this Agreement and continuing until the earlier of the Effective Time and the date nominees of Parent or Subsidiary constitute a majority of the members of the board of trustees Closing, except (i) as set forth on Section 7.1(a) of the Company Disclosure Schedule, (such earlier time, ii) as required by applicable Law or (iii) as otherwise approved with the “Control Time”), except either as consented to in writing (including by email or other electronic transmission) by Parent in response to a prior written or oral request therefore from the Company consent of Acquiror (which response consent shall not be unreasonably withheld, conditioned or delayed), the Company shall, and Contributor Parties shall cause its subsidiaries to, the Company to conduct its and their business the Company Business in the ordinary course Ordinary Course of Business and use in compliance in all material respects with all applicable Laws, including by using commercially reasonable efforts to conduct its to: (A) preserve intact the business organization of the Company; (B) maintain existing relations with key suppliers, customers, employees and their other Persons having business relationships with third parties the Company; (C) maintain material insurance policies of the Company or obtain reasonable substitutes; (D) maintain all Scheduled Permits; and to keep available (E) perform routine maintenance on the services Material Tangible Personal Property in the Ordinary Course of their present officers and employeesBusiness.
(b) Except (x) as set forth on Section 7.1(b) of the Company Disclosure Schedule, provided that it does not require additional compensation, and preserve its and their relationships with customers, suppliers and others having business dealings or (y) as otherwise approved with the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject to the terms prior written consent of or contemplated by this Agreement. In addition, without limiting the generality of the foregoing, except as expressly permitted in this AgreementAcquiror, from the date hereof until Execution Date through the Control TimeClosing, the Company shall not, and Contributor Parties shall cause its subsidiaries the Company not to:
(ai) (iA) authorizedeclare, declare set aside, or pay any dividends on on, or make any other distributions (whether in cash, stock, or property) in respect of of, any of its stock (Equity Interests, except for dividends by a transactions solely among the Company and its wholly owned subsidiary of Subsidiaries or among the Company Company’s wholly owned Subsidiaries or distributions in accordance with the Company’s Organizational Documents to its parent and except for distributions necessary for permit the Company Contributor Owners to maintain its REIT qualification, avoid pay their respective Taxes with respect to income allocated to them by the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives)Company, (iiB) split, combine or reclassify any of its stock Equity Interests, or issue or authorize or propose the issuance of any other securities in respect of, in lieu of, or in substitution for shares of its Equity Interests, except for transactions by a wholly owned Subsidiary of the Company, or (iiiC) repurchasepurchase, redeem or otherwise acquire any shares of stock Company Interests or any Equity Interests of the Company or any of its subsidiaries securities convertible into or exchangeable for such securities or any other securities thereof options, warrants, calls, or any rights, warrants or options rights to acquire any such shares or other securitiesEquity Interests;
(bii) except in accordance with the Share Option Agreementoffer, issue, deliver, grant, sell, pledge or encumberotherwise encumber any Equity Interests or any securities convertible into, or authorize exchangeable for, or propose the issuanceany options, deliverywarrants, salecalls, pledge or encumbrance ofrights to acquire or receive, any shares of its beneficial interestssuch Equity Interests, or securities or any stock appreciation rights, phantom stock awards, or any other securitysimilar rights that are linked in any way to the Company Interests or the Equity Interests of the Company;
(ciii) acquire by merger or consolidation, or by purchasing all or a substantial portion of the assets of, or by purchasing all or a substantial Equity Interest in, or by any other manner, all or a substantial portion of any business or any entity or division thereof of any Person;
(iv) acquire any Equity Interest in any Person or any assets or a license therefor, other than acquisitions of assets that are used or held for use in the Ordinary Course of Business or in order to maintain the Company’s Material Tangible Personal Property in good working order; or pursuant to existing Contracts as of the Execution Date that have been made available to Acquiror prior to the Execution Date;
(v) amend the Organizational Documents of the Company;
(vi) make or propose commit to amend its declaration make any capital expenditure or series of trust, certificate related capital expenditures in the aggregate in excess of incorporation or bylaws $3,000,000 (or similar organizational documentswhich amount shall exclude any capital expenditures set forth on Section 7.1 of the Company Disclosure Schedule);
(dvii) sell or otherwise dispose of any of the Company Assets, other than the sales and dispositions of inventory and products in the Ordinary Course of Business;
(viii) (iA) acquire make (other than in the Ordinary Course of Business), change or agree revoke any material election with respect to Taxes, (B) prepare and file any material Tax Return in a manner materially inconsistent with past practice or amend any material Tax Return, (C) change an annual Tax accounting period or change any material Tax accounting method, (D) settle or compromise any material Proceeding with respect to Taxes, (E) enter into any material closing agreement with respect to Taxes, (F) surrender any right to claim a material refund of Taxes, or (G) consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment;
(ix) make any change to the Company’s financial or accounting methods, policies, principles, elections or procedures, except as required by applicable Law or changes in GAAP;
(A) accelerate or offer any discounts with respect to the collection of its accounts receivable or (B) delay the payment of its accounts payable or capital expenditures;
(xi) (A) amend, waive or modify in any material respect or consent to the termination of any Material Contract, or amend, waive, modify or consent to the termination of any material rights of the Company thereunder, excluding (1) any termination upon expiration of a term in accordance with the terms of such Material Contract or (2) renewal of any Material Contract consistent with renewals in the Ordinary Course of Business consistent with past practice, or (B) enter into any Contract that would be a Material Contract if entered into prior to the Execution Date;
(xii) except as required by applicable Laws, (A) increase the compensation of any independent contractor; (B) pay, grant, or award or promise to pay, grant, or award, any bonus or incentive compensation to any independent contractor; (C) enter into any consulting or similar agreement (or materially amend any such agreement) involving any independent contractor; (D) grant any severance or termination pay to any current or former independent contractor; or (E) hire any individual who would become an Employee;
(xiii) (A) incur any Indebtedness or sell any debt securities or options, warrants, calls, or other rights to acquire any material assets (including securities) outside debt securities of the ordinary course or merge or consolidate with any person or engage in any similar transaction Company or (iiB) mortgage, pledge or subject to any Lien any of the Company, other than Liens for Taxes not yet due and payable or that are being contested in good faith, or incur any Liability as a guarantor or otherwise in respect of any Indebtedness;
(xiv) make any (A) loans, advances or extension of credit other than to customers or suppliers, travel and similar advances to employees, in each case in the Ordinary Course of Business or (B) capital contributions to, or investments in, any other personPerson, in each case other than to the Company or any direct or indirect wholly owned subsidiary Subsidiary of the Company and other than loans to auto dealers in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse LineCompany;
(exv) sell(A) initiate, leasesettle or compromise any Claim, license, encumber Liability or otherwise dispose of any of its assets or any interest therein, Proceeding other than Claims involving less than $5,000,000 in the ordinary course aggregate; provided, however, that the Company shall settle or compromise any Claim, Liability or Proceeding if such settlement or compromise
(including 1) involves a conduct remedy or injunctive or similar relief, (2) involves an admission of criminal wrongdoing by the disposition of any assets acquired as Company or (3) has a result of a foreclosure)restrictive impact on the Company Business, or (B) waive or release any material Claim or Proceeding brought by the Company against another Person;
(xvi) adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization, merger, consolidation, restructuring consolidation or other reorganizationreorganization other than in connection with the Transactions;
(fxvii) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” Affiliate Transaction;
(xviii) terminate or amend the coverage of any policies of title, liability, fire, workers’ compensation, property or any other agreement form of insurance covering the Company Assets or the Company Business, except where such terminated coverage is replaced by comparable coverage (provided that such termination does not result in a material gap in coverage of the Company Assets or the Company Business); or
(xix) authorize, agree or commit to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of take any of the foregoing, except for borrowings under the Warehouse Line;actions described above.
(gc) make The Parties acknowledge and agree that the restrictions set forth in this Agreement do not give Acquiror Parent, Acquiror or rescind any Tax election of their respective Affiliates, directly or settle indirectly, the right to control or compromise any Tax liability direct the business or operations of the Company or the Company Business at any of its subsidiaries;
(h) make or agree time prior to make any capital expenditures other than in amounts of less than $75,000 in the aggregate;
(i) payClosing Date. Until the Closing Date, dischargethe Company will exercise, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than consistent with the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, conditions and restrictions of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of this Agreement, complete control and supervision over the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company Business and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregateoperations related thereto.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, other than in the ordinary course of business;
(q) securitize, or create any financing arrangements in the nature of a collateralized debt obligation with respect to, any accounts receivable, loans or other assets;
(r) amend or modify the existing agreement between Company and Company Financial Advisor; or
(s) authorize any of, or commit or agree to take any of, the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditions.
Appears in 1 contract
Samples: Contribution Agreement (Solaris Oilfield Infrastructure, Inc.)
Conduct of the Company’s Business. During the period from the date of this Agreement and continuing until the earlier of the Effective Time and the date nominees of Parent or Subsidiary constitute a majority of the members of the board of trustees of the Company (such earlier time, the “Control Time”), except either a) Except as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed), the Company shall, and shall cause its subsidiaries to, conduct its and their business in the ordinary course and use commercially reasonable efforts to conduct its and their business relationships with third parties and to keep available the services of their present officers and employees, provided that it does not require additional compensation, and preserve its and their relationships with customers, suppliers and others having business dealings with the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreement. In addition, without limiting the generality of the foregoing, except as expressly permitted in this Agreement, from the date hereof until the Control TimeClosing Date, the Company shall not, and Seller shall cause its subsidiaries not the Company to:
(ai) continue to conduct its businesses and operations in the ordinary and usual course;
(ii) continue to exercise the same degree of care that the Company has previously exercised with respect to its business;
(iii) use its commercially reasonable efforts to maintain its existing relationships with its reinsurers, agents, policyholders, providers of specialty insurance products to its agents and other parties with whom it has business relationships; and
(iv) cooperate with Guarantee to facilitate a smooth transition of ownership of the Company, including consulting with Guarantee as to the advisability of retaining the employees of the Seller who perform marketing and underwriting functions and related support staff employees with respect to the business of the Company.
(b) From the date hereof until the Closing Date, the Seller shall not and the Seller shall cause the Company to not (except as is contemplated or permitted by this Agreement or with the written approval of Guarantee, which approval shall not be unreasonably withheld):
(i) authorizesell, declare pledge, dispose of, lease or pay encumber any dividends on or make other distributions in respect of material Assets (including, without limitation, any of its stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Codeindebtedness owed to, or avoid any claims held by, it) except in the need to make one or more extraordinary or disproportionately larger distributions to meet any ordinary course of the three preceding objectives), business;
(ii) splitterminate the insurance Licenses, combine insurance permits and insurance authorities, or reclassify any fail to timely file all reports required by government agencies which administer such Licenses, permits and authorities, except in the ordinary course of its stock or issue or authorize or propose the issuance of any other securities or business;
(iii) repurchaseredeem, redeem purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire any shares of its capital stock of the Company or any of its subsidiaries or any (other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(b) except in accordance with the Share Option Agreement, issue, deliver, sell, pledge or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other security;
(c) amend or propose to amend its declaration of trust, certificate of incorporation or bylaws (or similar organizational documentsthan directors' qualifying shares);
(div) transfer any material Assets or liabilities of the Company to any new Subsidiary or new Affiliate;
(iv) acquire (by merger, consolidation or agree acquisition of stock or Assets) any corporation, partnership or other business organization or division thereof or make any investment either by purchase of stock or securities, contribution to acquire any material assets (including securities) outside capital or property transfer other than in the ordinary course or merge or consolidate with of business;
(vi) incur any person or engage in any similar transaction or indebtedness for borrowed money (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company and other than loans to auto dealers in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse Line;
(e) sell, lease, license, encumber or otherwise dispose of any of its assets or any interest therein, other than in the ordinary course (including the disposition of any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization;
(f) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse Line;
(g) make or rescind any Tax election or settle or compromise any Tax liability of the Company or any of its subsidiaries;
(h) make or agree to make any capital expenditures other than in amounts of less than $75,000 in the aggregate;
(i) pay, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice), (ii) adopt issue any material amendment to a Benefit Plandebt securities, (iii) enter intoassume, amend guarantee, endorse or modify otherwise as an accommodation become responsible for the obligations of any employmentPerson other than the Company, consultingmake any loans or advances, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in incur any other way secure the payment of compensation liabilities, obligations or benefits under commitments or forgive or discharge any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each caseindebtedness, other than in the ordinary course of business;
(qvii) securitize, or create any financing arrangements except in the nature ordinary course of a collateralized debt obligation with respect tobusiness, adopt or amend any accounts receivablebonus, loans profit-sharing, thrift, savings, compensation, stock option, pension retirement, deferred compensation, employment or other assetsemployee benefit plan, agreement, trust, plan, fund or other arrangement for the benefit or welfare of any of its employees, except where required by any state or federal law or regulation;
(rviii) amend increase or modify authorize an increase in the compensation or fringe benefits of any employee of the Seller providing services to the Company or pay or authorize any payment or any benefit not required by an existing agreement between Company plan and Company Financial Advisor; orarrangement of the Seller not in the ordinary course of business, other than severance payments at the sole expense of the Seller;
(six) promote or demote any key employee of the Seller or take any action to reduce the staff of the Seller, providing services to the Company (except for terminations for documented cause) in accordance with past practice;
(x) terminate the services of the Company's present brokers, agents and general agents and other sales personnel;
(xi) issue, authorize or propose the issuance of additional shares of the Company's capital stock of any ofclass;
(xii) split, combine or reclassify any shares of the Company's capital stock or declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise with respect to any of its capital stock, except for dividends of excess surplus as provided in Section 5.11;
(xiii) enter into any material transaction not in the ordinary course of business;
(xiv) cancel, compromise or settle any material claim, or commit waive or agree to take release any of, right other than in the foregoing actions or any action that would result in a breach ordinary course of business;
(xv) dispose of any representation, warranty or agreement investment securities of the Company contained without Guarantee's prior consent (which will not be unreasonably withheld) other than in the ordinary course of business;
(xvi) amend the Articles of Incorporation or Code of Regulations of the Company, except in connection with the elimination, redemption and cancellation of directors' qualifying shares or the redomestication of the Company as an insurance company from Ohio to Nebraska pursuant to this Agreement as of the date when made or as of any future date is otherwise contemplated or would result in any of permitted by this Agreement);or
(xvii) amend the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditionsManagement Agreement.
Appears in 1 contract
Samples: Stock Purchase Agreement (Guarantee Life Companies Inc)
Conduct of the Company’s Business. During the period from The Company covenants and agrees that, after the date of this Agreement and continuing until the earlier of but prior to the Effective Time and the date nominees of Time, unless Parent or Subsidiary constitute a majority of the members of the board of trustees of the Company (such earlier time, the “Control Time”), except either as consented to shall otherwise consent in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed), the Company shall, and shall cause its subsidiaries to, conduct its and their business in the ordinary course and use commercially reasonable efforts to conduct its and their business relationships with third parties and to keep available the services of their present officers and employees, provided that it does not require additional compensation, and preserve its and their relationships with customers, suppliers and others having business dealings with the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or otherwise expressly contemplated by this Agreement. In addition, without limiting the generality of the foregoing, except as expressly permitted in this Agreement, from the date hereof until the Control Time, the Company shall not, and shall cause its subsidiaries not to:
(a) neither the Company nor any Subsidiary shall take (or agree in writing to take) any of the actions listed in clauses (i) authorize, declare through (xiv) of Section 3.09 or pay cause or allow any dividends on Managed Facility to take (or make other distributions agree in respect of writing to take) any of its stock the actions listed in clauses (except for dividends by a wholly owned subsidiary i) through (xiv) of Section 3.09;
(b) neither the Company nor any Subsidiary shall take any action that would make any representation or warranty of the Company hereunder inaccurate in any material respect at, or as of any time prior to, the Effective Time, or omit to its parent and except for distributions take any action necessary for to prevent any such representation or warranty from being inaccurate in any material respect at any such time;
(c) each of the Company and the Subsidiaries shall use its best efforts, to the extent not prohibited by the foregoing provisions of this Section 6.01, to maintain its REIT qualificationrelationships with its suppliers, avoid customers and third party payors, and if and as requested by Parent or Acquisition Sub, (i) the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need Company shall use its reasonable efforts to make one reasonable arrangements for representatives of Parent or more extraordinary or disproportionately larger distributions Acquisition Sub to meet any of the three preceding objectives)with suppliers, (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock customers and third party payors of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(b) except in accordance with the Share Option Agreement, issue, deliver, sell, pledge or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other security;
(c) amend or propose to amend its declaration of trust, certificate of incorporation or bylaws (or similar organizational documents);
(d) (i) acquire or agree to acquire any material assets (including securities) outside the ordinary course or merge or consolidate with any person or engage in any similar transaction or Subsidiary and (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary shall schedule, and the management of the Company and other than loans to auto dealers in the ordinary course shall participate in, meetings of business which would, when originated, qualify as Eligible Receivables under the Warehouse Line;
(e) sell, lease, license, encumber representatives of Parent or otherwise dispose of any of its assets or any interest therein, other than in the ordinary course (including the disposition of any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization;
(f) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse Line;
(g) make or rescind any Tax election or settle or compromise any Tax liability Acquisition Sub with employees of the Company or any of its subsidiaries;Subsidiary; and
(hd) the Company and its Subsidiaries shall properly complete and file all reports required to be filed by them with the SEC and all other federal, state or local governmental or regulatory authorities (including self-regulatory authorities) having jurisdiction over the Company and/or the Subsidiaries and shall deliver or make or agree available to make Parent copies of all such reports promptly after the same are filed. If financial state ments are contained in any capital expenditures other than such reports filed with the SEC, such financial statements will fairly present the consolidated financial position of the entity filing such statements as of the dates indicated and the consolidated results of operations, changes in amounts of less than $75,000 in shareholders' equity, and cash flows for the aggregate;
(i) pay, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or periods then ended in accordance with GAAP. As of their termsrespective dates, such reports filed with the SEC will comply in all material respects with the federal securities laws and will not contain any untrue statement of Claims whether recognized a material fact or disclosed omit to state a material fact required to be stated therein or necessary in order to make the most recent statements therein, in light of the circumstances under which they were made, not misleading. Any financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or contained in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used reports to calculate funding obligations another regulatory authority shall be prepared in accordance with respect all laws applicable to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, other than in the ordinary course of business;
(q) securitize, or create any financing arrangements in the nature of a collateralized debt obligation with respect to, any accounts receivable, loans or other assets;
(r) amend or modify the existing agreement between Company and Company Financial Advisor; or
(s) authorize any of, or commit or agree to take any of, the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditionsreports.
Appears in 1 contract
Conduct of the Company’s Business. During the period from the date of this Agreement and continuing until the earlier of the Effective Time and Closing or the date nominees termination of Parent this Agreement in accordance with its terms, except (i) as expressly contemplated, required or Subsidiary constitute a majority of the members of the board of trustees permitted by this Agreement, (ii) as required by applicable Law, (iii) as set forth in Section 8.1 of the Company Disclosure Letter, (such earlier time, iv) in response to or in connection with any COVID-19 Measure in a manner and form similar to any actions taken by the “Control Time”Acquired Companies prior to the date of this Agreement in response to or in connection with COVID-19 Measures), except either or (v) as consented to by Purchaser in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response consent shall not be unreasonably delayedwithheld, conditioned or delayed and shall be deemed to have been given if Purchaser does not object in writing within five (5) Business Days after a written request for such approval is delivered to Purchaser by the Company), Holdings and the Company shall, and each shall cause its subsidiaries Subsidiaries to, (A) conduct its their respective businesses and their business operations in the ordinary course of business, (B) operate in accordance with, and make the capital expenditures contemplated by, the budget set forth on Section 8.1(B) of the Company Disclosure Letter (except to the extent that the Acquired Companies’ ability to comply with such budget is adversely impacted by forces beyond the reasonable control of the Acquired Companies), and (C) use commercially reasonable efforts to conduct its maintain and their preserve intact the current organization and business relationships with third parties and to of the Acquired Companies, keep available the services of their present current officers and management-level employees, provided that it does not require additional compensationand maintain their relations and goodwill with suppliers, and preserve its and their relationships with customers, suppliers landlords, creditors, and others having business dealings relationships with the Company and its subsidiariesAcquired Companies (provided, and that in no event shall Holdings or the Acquired Companies be obligated to maintain pay any transition bonuses, stay bonuses, or other monetary amounts to any Person in excess of any amounts required by any Contract with such Person in existence as of the Company’s qualification as a REIT, in each case subject to the terms date of or contemplated by this Agreement). In addition, without Without limiting the generality of the foregoing, except as expressly permitted in this Agreementsubject to clauses (i) through (v) above, from the date hereof until the Control Time, Holdings and the Company shall not, and each shall cause each of its subsidiaries Subsidiaries not to:
(a) (i) authorize, declare or pay any dividends on or make other distributions in respect of any of its stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of effect any other securities amendment to or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of change its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securitiesOrganizational Documents;
(b) except issue or authorize the issuance of any Equity Interests (other than upon the exercise of Company Options or upon the settlement of Company RSUs, in each case, which are existing as of the date hereof or as set forth on Section 8.1(b) of the Company Disclosure Letter, in accordance with their respective terms), or grant any options, warrants, or other rights to purchase or obtain any of their or any other Acquired Company’s Equity Interests other than as set forth on Section 8.1(b) of the Share Option AgreementCompany Disclosure Letter; or sell or otherwise dispose of any of the Equity Interests of Holdings or an Acquired Company, issueor adjust, deliverreclassify, sellsplit, combine or subdivide, or pledge or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other securitysuch Equity Interests;
(c) (i) enter into any Contract that, had it been entered into prior to the date of this Agreement, would be a Material Contract under Section 3.14(a) or (ii) amend any material terms of, modify, terminate or propose to amend its declaration cancel any existing Material Contract (other than expirations of trust, certificate of incorporation or bylaws (or similar organizational documentssuch Material Contracts in accordance with their terms);
(d) (i) acquire or agree to acquire any material assets (including securities) outside the ordinary course or merge or consolidate with any person or engage in any similar transaction or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company and other than loans to auto dealers except in the ordinary course of business which wouldbusiness, when originated, qualify as Eligible Receivables under the Warehouse Line;
(e) sell, lease, license, encumber transfer or otherwise dispose or permit the cancellation, abandonment or dedication to the public domain of any of its the material property rights (including material Company IPR) or assets or any interest thereinof the Acquired Companies, other than distributions of excess cash to the Holders, and other than as required pursuant to existing Contracts;
(e) cancel, compromise or settle any Actions of any Acquired Company (or series of related Actions) involving a payment by any Acquired Company of more than two hundred fifty thousand dollars ($250,000) in the ordinary course aggregate, or institute any material Action, unless, in all cases, such cancellation, compromise, settlement or material Action is fully paid prior to the Closing with a full release of Liability and no ongoing obligations binding on any Acquired Company;
(including f) make any material changes to its accounting, billing, invoicing, or payment methods, principles or practices, other than as may be required by Law or GAAP (as in effect at the disposition time of such changes), or make any material change to its cash management practices, or write-down the value of its assets;
(g) discontinue any business line material to the Acquired Companies, taken as a whole;
(h) other than as required by Law or GAAP, change in any material respect the policies or practices of any assets acquired as Acquired Company with regard to the extension of discounts or credit to customers or collection of receivables from customers;
(i) enter into or adopt a result plan or agreement of a foreclosure)recapitalization, reorganization, merger or consolidation or adopt a plan of complete or partial liquidation, liquidation or dissolution, merger, consolidation, restructuring or other reorganization;
(fj) incur except in the ordinary course of business, increase the base salary, retirement benefits, change in control benefits or suffer to exist severance benefits (other than as may be permitted by Section 8.1(b)) of any indebtedness employee, officer or director of any Acquired Company;
(k) except in the ordinary course of business, enter into, terminate, adopt or amend any Benefit Plan or any arrangement that would be a material Benefit Plan if it were in effect on the date hereof (other than as may be permitted by Section 8.1(b));
(l) make or change any material Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting, amend any Tax Returns or file any claims for borrowed money or guarantee any such indebtedness, guarantee any debt of othersmaterial Tax refunds, enter into any “keep-well” closing agreement, settle any Tax claim, audit or other agreement assessment, surrender any right to maintain claim a material Tax refund, or fail to pay any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse Linematerial Tax that becomes due (including applicable extensions);
(gm) make create, incur, or rescind permit to arise any Tax election or settle or compromise any Tax liability of the Company or Encumbrance on any of its subsidiariesassets, tangible or intangible, other than (i) Permitted Encumbrances, (ii) Encumbrances under consignment agreements entered into in the ordinary course of business whereby the encumbered assets are limited to those assets that are being consigned pursuant to the applicable Contract or the proceeds thereof, or (iii) Encumbrances arising pursuant to the currently effective terms of a Material Contract in existence as of the date of this Agreement;
(hn) make or agree to make any capital expenditures other than in amounts expenditure (or series of less than $75,000 in the aggregate;
(irelated capital expenditures) pay, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise)commitments therefor, other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k8.1(n) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal yearLetter;
(o) enter into make any transaction with capital investment in, any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payablesloan to, or modify any acquisition of the payment terms securities or assets of, any other Person (or series of any receivables or payablesrelated capital investments, in each caseloans, other than in and acquisitions) outside the ordinary course of business;
(qp) securitize(i) issue, create, incur, assume, or create guarantee any financing arrangements Indebtedness, other than any Indebtedness that shall be repaid (to the extent such Indebtedness is for borrowed money) or otherwise taken into account at the Closing as Estimated Closing Indebtedness, or (ii) make any loans or advances to any Person (except to employees in the nature ordinary course of a collateralized debt obligation with respect to, any accounts receivable, loans or other assets;
(r) amend or modify the existing agreement between Company and Company Financial Advisorbusiness); or
(sq) authorize any of, agree or otherwise commit or agree to take any of, of the actions prohibited by the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditionsclauses (a) through (p) above.
Appears in 1 contract
Conduct of the Company’s Business. During The Company covenants and agrees with Parent and Merger Sub that, between the period from the date of this Agreement Execution Date and continuing until the earlier of the Effective Time and the date nominees of Parent or Subsidiary constitute a majority of the members of the board of trustees of the Company (such earlier time, the “Control Time”), except either as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed), the Company shall, and shall cause its subsidiaries toSubsidiaries (other than Nextwave, conduct its and their business in with respect to which the ordinary course and Company shall use commercially reasonable efforts to conduct cause Nextwave, and shall vote its shares in Nextwave and take such other corporate actions in order to cause Nextwave), (i) to operate their respective businesses only in, and not to take any action except in, the Ordinary Course of Business, and (ii) to use all commercially reasonable efforts to preserve intact their business organizations, their business relationships with third parties customers, suppliers and to other Persons with whom they have business relationships, and keep available the services of their present officers current officers, consultants and employees; provided, provided however, that it does not require additional compensation, and preserve its and their relationships with customers, suppliers and others having business dealings with no actions by the Company and or its subsidiaries, and to maintain the Company’s qualification as Subsidiaries that are specifically permitted by Article V or Article VI shall be deemed a REIT, in each case subject to the terms breach of or contemplated by this Agreementsentence. In addition, without Without limiting the generality of the foregoing, foregoing and except as otherwise expressly permitted by this Agreement or as may be consented to in this Agreementwriting by Parent in Parent’s sole discretion, from prior to the date hereof until the Control Time, Effective Time the Company shall not, and shall cause not permit any of its subsidiaries not Subsidiaries to:
(a) (i) authorizedeclare, declare set aside or pay any dividends on on, or make any other distributions (whether in cash, stock or property) in respect of of, any of its capital stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(b) except in accordance as contemplated by Section 2.3.1, purchase, redeem or otherwise acquire any shares of capital stock or any other securities of the Company or its Subsidiaries or any options, warrants, calls or rights to acquire any such shares or other securities, or take any action to accelerate any vesting provisions or alter the terms of exercisability or payment of any such shares or securities, other than the repurchase of unvested shares of Company Common Stock, at the original price paid per share, from employees, consultants or directors upon the termination of their service relationship with the Share Option AgreementCompany or any Subsidiary;
(c) except as contemplated by Section 2.3.1, 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 any of its other securities;
(d) issue, deliver, sell, pledge or pledge, dispose of, authorize, encumber, or authorize alter or modify the terms of, or propose the issuance, delivery, sale, pledge pledge, disposition, authorization, encumbrance, alteration or encumbrance of, modification of the terms of any shares of its beneficial interests, capital stock or other securities of any class or series, including any equity or voting interests or any securities convertible into, or exchangeable for any other securitysecurities, any options, warrants, calls or rights to acquire any securities, any voting securities or convertible or exchangeable securities or any stock appreciation rights or other rights that are linked in any way to the price of securities of the Company or in any way alter the capitalization structure of the Company or any of its Subsidiaries existing on the Execution Date (other than the issuance of up to 5,187,500 shares of Company Common Stock upon the exercise of Company Options outstanding on the Execution Date pursuant to their terms as in effect on the Execution Date);
(ce) amend its Certificate of Incorporation or Bylaws (or similar organizational documents of any Subsidiary) or adopt, amend or propose to amend its declaration of trust, certificate of incorporation any stockholder rights plan or bylaws (or similar organizational documents)related rights plan;
(df) effect any merger, consolidation, reorganization, share exchange, joint venture, business combination or similar transaction;
(g) adopt a plan of complete or partial liquidation, dissolution, consolidation, restructuring or recapitalization of the Company or any of its Subsidiaries or otherwise permit the corporate existence of the Company or any of its Subsidiaries to be suspended, lapsed or revoked;
(h) directly or indirectly, sell, lease, sell and leaseback, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of any of its properties or assets or any interest therein, other than (i) in the Ordinary Course of Business, (ii) any Liens for Taxes not yet due and payable or being contested in good faith and (iii) such mechanics’ and similar Liens, if any, as do not materially detract from the value of any such properties or assets;
(i) (i) acquire repurchase, prepay or agree incur any Indebtedness or assume, guarantee or endorse any Indebtedness of another Person or issue or sell any debt securities or options, warrants, calls or other rights to acquire any material assets (including securities) outside debt securities of the ordinary course Company or merge or consolidate with any person or engage in any similar transaction of its Subsidiaries, or (ii) make any loans, advances or capital contributions to, or investments in, any other personPerson, other than to the Company or any wholly direct or indirect wholly-owned subsidiary Subsidiary of the Company;
(j) (i) enter into, modify, amend or terminate any Contract which if so entered into, modified, amended or terminated would (A) have a Material Adverse Effect, (B) impair in any material respect the ability of the Company and other than loans to auto dealers perform its obligations under this Agreement or (C) prevent or materially delay the consummation of the transactions contemplated by this Agreement or (ii) modify, amend or terminate any Company Listed Contract, except for immaterial amendments or modifications made in the ordinary course Ordinary Course of business which would, when originated, qualify as Eligible Receivables under the Warehouse LineBusiness that could not reasonably be expect to have a Material Adverse Effect;
(ek) waive, release or assign any material rights or claims of the Company; settle or propose to settle any litigation, investigation, arbitration, proceeding or other claim;
(l) (i) purchase, acquire, lease or license-in any material assets in any single transaction or series of related transactions having a fair market value in excess of $25,000; (ii) sell, leasetransfer or otherwise dispose of any material assets other than sales of its products and other non-exclusive licenses of software in the Ordinary Course of Business; (iii) enter into any commitments to any person to develop Software without charge; (iv) sell, license, encumber transfer or otherwise dispose of any of its assets or any interest therein, Company-owned Intellectual Property other than in connection with sales of its products and non-exclusive licenses in the ordinary course Ordinary Course of Business; (v) terminate any material Software development project that is currently ongoing; (vi) grant “most favored customer” pricing to any Person; (vii) grant to a Person or agree to be bound by any exclusivity arrangements, including the disposition of any assets acquired as a result of a foreclosure)exclusive license, distribution, marketing or sales agreements; (viii) agree to be bound by any non-competition arrangements; (ix) acquire, or adopt agree to acquire, in a plan single transaction or a series of complete related transaction, any business, corporation or partial liquidationpartnership, dissolution, merger, consolidation, restructuring or other reorganization;
(f) incur the assets or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect securities of any of the foregoing, except for borrowings under the Warehouse Line;
; or (g) make or rescind any Tax election or settle or compromise any Tax liability of the Company or any of its subsidiaries;
(hx) make or agree to make any capital expenditures other than capital expenditures in amounts of less than $75,000 in fiscal year 2007 that are set forth under the aggregatecolumn entitled “FY2007 Budget” (subject to the footnotes thereto) on the spreadsheet that is attached as Schedule 5.1;
(im) payexcept as contemplated by Section 2.3.1, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) increase the salary, wages, stipends, bonuses or reimbursable allowances payable to or to become payable to the Company’s directors, officers or employees, (ii) pay any material benefit not required to be paid as of the Execution Date under any Contract or Company Plan; or (ii) enter into, modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Company Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the vesting or payment or alter the terms of compensation exercisability or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan securities issued under the Company Plans; or change (iv) adopt or enter into any collective bargaining agreement or other labor union contract applicable to the timing employees of the Company or any of its Subsidiaries;
(n) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice in which contributions any material respect or purchase any additional insurance;
(o) except as required by GAAP, revalue any of its material assets or make any changes in accounting methods, principles or practices;
(p) make or rescind any material election relating to Taxes or settle or compromise any material Tax liability or enter into any closing, settlement or other agreement with any Tax authority with respect to any pension plan are material Tax liability or audit, or file or cause to be filed any amended Tax return, file or cause to be filed any claim for material refund of Taxes previously paid, or agree to an extension of a statute of limitations with respect to the assessment or determination of Taxes;
(q) fail to file any material Tax returns when due, fail to cause such Tax returns when filed to be materially true, correct and complete, prepare or fail to file any Tax return in a manner inconsistent with past practices in preparing or filing similar Tax returns in prior periods or, on any such Tax return of the Company, take any position, make any election, or adopt any method that is inconsistent with positions taken, elections made or methods used in preparing or filing similar Tax returns in prior periods, in each case, except to the basis on which such contributions extent required by applicable Legal Requirements, or fail to pay any material Taxes when due;
(r) effectuate a “plant closing” or “mass layoff,” as those terms are determined defined in the Worker Adjustment and Retraining Notification Act of 1988, as amended, affecting in whole or (vi) take in part any action that could give rise to severance benefits payable to any officersite of employment, trusteefacility, director, operating unit or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Scheduleits Subsidiaries;
(ls) take any action with respect to exempt the establishment, payment or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions grant of any Takeover Statute severance or (y) Section 7.2 of the Declaration of Trusttermination pay or stay, in each case to any individual bonus, reward or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;incentive arrangement; and
(mt) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, authorize or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables contract, agreement, commitment or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, other than in the ordinary course of business;
(q) securitize, or create any financing arrangements in the nature of a collateralized debt obligation arrangement with respect to, any accounts receivableor commit, loans or other assets;
(r) amend or modify the existing agreement between Company and Company Financial Advisor; or
(s) authorize any of, or commit resolve or agree to take any of, the foregoing actions or any action and matters that would result in a breach of any representation, warranty or agreement of the Company contained in are prohibited by this Agreement as of the date when made or as of any future date or would result in any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditionsSection 5.1.
Appears in 1 contract
Conduct of the Company’s Business. During (a) From the period from Execution Date through the date of this Agreement and continuing until the earlier of the Effective Time and the date nominees of Parent or Subsidiary constitute a majority of the members of the board of trustees Closing, except (i) as set forth on Section 8.1(b) of the Company Disclosure Schedule, (such earlier time, ii) as expressly permitted by this Agreement or (iii) as otherwise approved with the “Control Time”), except either as consented to in writing (including by email or other electronic transmission) by prior written consent of the Parent in response to a written or oral request therefore from the Company (which response consent shall not be unreasonably withheld, conditioned or delayed), the Company shall, and shall cause its subsidiaries Subsidiaries to, conduct its and their business in the ordinary course and use commercially reasonable efforts to conduct its the Business in the ordinary course of business and their in compliance in all material respects with all applicable Laws, including by using commercially reasonable efforts to: (A) preserve intact the business relationships with third parties and to keep available the services organization of their present officers and employees, provided that it does not require additional compensation, and preserve its and their relationships with customers, suppliers and others having business dealings with the Company and its subsidiariesSubsidiaries; (B) maintain existing relations with key suppliers, customers, employees and to other Persons having business relationships with the Company or its Subsidiaries; (C) maintain material insurance policies of the Company’s qualification Company and its Subsidiaries or obtain reasonable substitutes; (D) maintain all Scheduled Permits; and (E) perform routine maintenance on the material Tangible Personal Property in the ordinary course of business.
(b) Except as a REIT, in each case subject to the terms of or contemplated otherwise expressly permitted by this Agreement. In addition, without limiting the generality as set forth on Section 8.1(b) of the foregoingCompany Disclosure Schedule, except as expressly permitted in this Agreementor with the prior written consent of the Parent, from the date hereof until Execution Date through the Control TimeClosing, the Company shall not, and shall cause its subsidiaries Subsidiaries not to:
(ai) (iA) authorizedeclare, declare set aside, or pay any dividends on on, or make any other distributions (whether in cash, stock, or property) in respect of of, any of its stock (equity or voting interests, except for dividends by a wholly owned subsidiary of transactions solely among the Company to and its parent and except for distributions necessary for wholly-owned Subsidiaries or among the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives)Company’s wholly-owned Subsidiaries, (iiB) split, combine combine, or reclassify any of its stock equity or voting interests, 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 capital stock or other equity or voting interests, except for transactions by a wholly-owned Subsidiary of the Company, or (iiiC) repurchasepurchase, redeem redeem, or otherwise acquire any shares of stock securities of the Company or any of its subsidiaries Subsidiaries or any other securities thereof convertible into or exchangeable for such securities or any rightsoptions, warrants warrants, calls, or options rights to acquire any such shares or other securities;
(bii) except in accordance with the Share Option Agreementoffer, issue, deliver, grant, sell, pledge or encumberpledge, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, otherwise encumber any shares of its beneficial equity or voting interests or any securities convertible into, or exchangeable for, or any options, warrants, calls, or rights to acquire or receive, any such interests, or securities or any stock appreciation rights, phantom stock awards, or any other securitysimilar rights that are linked in any way to the price of the Company Common Stock or the value of the Company or any part thereof;
(ciii) amend acquire by merger or propose to amend its declaration consolidation, or by purchasing all or a substantial portion of trustthe assets of, certificate or by purchasing all or a substantial equity or voting interest in, or by any other manner, all or a substantial portion of incorporation any business or bylaws (any entity or similar organizational documents)division thereof of any Person;
(div) acquire any equity interest in any Person or any assets or a license therefor, other than acquisitions of assets that are used or held for use in the ordinary course of business or in order to maintain the Company’s and its Subsidiaries’ material Tangible Personal Property in good working order; or pursuant to existing Contracts as of the date of this Agreement that have been provided to the Parent prior to the date hereof;
(v) amend the Organizational Documents of the Company or any of its Subsidiaries;
(vi) make or commit to make any capital expenditure or series of related capital expenditures in excess of $300,000 individually or in excess of $750,000 in the aggregate, except for capital expenditures to repair damage resulting from insured casualty events where there is a reasonable basis for a claim of insurance or made in response to an emergency;
(vii) sell or otherwise dispose of any of its properties or assets, other than the sales and dispositions of inventory and products in the ordinary course of business;
(viii) (iA) acquire make or agree rescind any material election relating to Taxes (including any election for any joint venture, partnership, limited liability company or other investment where the Company has the authority to make such binding election, but excluding any election that is made periodically and consistent with past practice), (B) settle or compromise any material Proceeding relating to Taxes, or (C) change in any material respect any of its methods of reporting income or deductions for income Tax purposes from those employed in the preparation of its income Tax Returns that have been filed for prior taxable years;
(ix) make any change to the Company’s or its Subsidiaries’ financial or accounting methods, policies, principles, elections or procedures, except as required by applicable Law or changes in GAAP;
(x) enter into or terminate any Contract that would constitute a Material Contract, or amend any Material Contracts in a manner that would be adverse to the Company or any of its Subsidiaries and, in each case, cost the Company or any of its Subsidiaries more than $250,000 in any calendar year (provided, that, prior notice of any proposed amendment to a Material Contract will be provided in writing to the Parent); provided, further, that any Contract entered into in compliance with the foregoing shall not (x) conflict with, or result in any violation or breach of, or default under (with or without notice or lapse of time or both) this Agreement, or give rise to a right of, or result in, termination, cancellation, or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any Lien in or upon any of the properties or assets of the Company or any of its Subsidiaries or the Parent or any of its Subsidiaries under, or give rise to any increased, additional, accelerated, or guaranteed rights or entitlements under, any provision of such Contract; or (y) in any way purport to restrict the business activity of the Company or any of its Subsidiaries or any of their Affiliates or to limit the freedom of the Company or any of its Subsidiaries or any of their Affiliates to engage in any line of business or to compete with any Person or in any geographic area or solicit the employees or customers of any Person;
(xi) except as required by applicable Laws or the existing terms of the Benefit Programs: (A) increase the salary, wages or any other compensation of any officer, employee, director or independent contractor, other than for non-officers in the ordinary course of business consistent with past practice; (B) pay, grant, or award or promise to pay, grant, or award, any bonus or incentive compensation to any officer, employee, director or independent contractor; (C) increase the coverage or benefits available to any current or former employee, officer, director or independent contractor, including any severance pay, vacation pay, deferred compensation, bonus or other incentive compensation plan, other than in the ordinary course of business consistent with past practice; (D) enter into any employment, deferred compensation, severance, retention, change in control, bonus, consulting, non-competition or similar agreement (or materially amend any such agreement) involving any officer, employee, director or independent contractor, other than with non-officers in the ordinary course of business; (E) grant any severance or termination pay to any current or former officer, employee, director or independent contractor, other than to a non-officer in the ordinary course of business; (F) establish, adopt, enter into, materially amend or terminate any Benefit Program, other than amendments required to comply with applicable Laws; (G) grant any equity or equity-based awards; (H) transfer any Employee or terminate the employment of any Employee other than for cause; or (I) hire any individual who would become an Employee, unless necessary to replace an Employee whose employment has terminated as permitted herein (so long as such hiring is on compensation and other terms no more favorable than those of the Employee who has been replaced), other than the hiring of any non-officers in the ordinary course of business;
(xii) other than borrowings under the O-Tex Credit Facility in accordance with the terms thereof in effect as of the Execution Date in the ordinary course of business consistent with past practice, incur any Indebtedness or sell any debt securities or options, warrants, calls, or other rights to acquire any material debt securities of the Company or any of its Subsidiaries;
(xiii) mortgage, pledge or subject to any Lien any of the assets or properties of the Company, other than Liens for Taxes not yet due and payable or that are being contested in good faith, or incur any liability as a guarantor or otherwise in respect of any Indebtedness;
(including securities) outside the ordinary course or merge or consolidate with any person or engage in any similar transaction or (iixiv) make any (A) loans, advances or extension of credit other than to customers or suppliers, travel and similar advances to employees, in each case in the ordinary course of business or (B) capital contributions to, or investments in, any other personPerson, in each case other than to the Company or any wholly direct or indirect wholly-owned subsidiary Subsidiary of the Company;
(xv) (A) settle or compromise any claim, liability or Proceeding other than claims involving less than $250,000 in the aggregate; provided, however, that neither the Company nor any of its Subsidiaries shall settle or compromise any Proceeding if such settlement or compromise
(1) involves a material conduct remedy or material injunctive or similar relief, (2) involves an admission of criminal wrongdoing by the Company or any of its Subsidiaries or (3) has a restrictive impact on the business of the Company and other than loans to auto dealers in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse Line;
(e) sell, lease, license, encumber or otherwise dispose of any of its assets Subsidiaries in any material respect, or (B) waive or release any material claim or Proceeding brought by the Company or any interest thereinof its Subsidiaries against another Person, other than in the ordinary course of business consistent with past practice;
(including the disposition of any assets acquired as a result of a foreclosure), or xvi) adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization, merger, consolidation, restructuring consolidation or other reorganizationreorganization other than in connection with the Transactions;
(fxvii) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse LineAffiliate Transaction;
(gxviii) make terminate or rescind amend the coverage of any Tax election or settle or compromise any Tax liability policies of the Company title, liability, fire, workers’ compensation, property or any other form of its subsidiaries;
(h) make insurance covering the assets or agree to make any capital expenditures other than in amounts of less than $75,000 in the aggregate;
(i) pay, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary operations of the Company, plus except where such terminated coverage is replaced by comparable coverage (y) an amount paid by the Company or any subsidiary provided that such termination does not result in a material gap in coverage of the Company not exceeding $100,000 per Claim, liability assets or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee operations of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiariesCompany), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, other than in the ordinary course of business;
(q) securitize, or create any financing arrangements in the nature of a collateralized debt obligation with respect to, any accounts receivable, loans or other assets;
(r) amend or modify the existing agreement between Company and Company Financial Advisor; or
(sxix) authorize any ofauthorize, agree or commit or agree to take any of, the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditionsactions described above.
Appears in 1 contract
Conduct of the Company’s Business. During the period from the date of this Agreement and continuing until the earlier of the Effective Time and the date nominees of Parent or Subsidiary constitute a majority of the members of the board of trustees of the Company (such earlier time, the “Control Time”), except either a) Except as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed), the Company shall, and shall cause its subsidiaries to, conduct its and their business in the ordinary course and use commercially reasonable efforts to conduct its and their business relationships with third parties and to keep available the services of their present officers and employees, provided that it does not require additional compensation, and preserve its and their relationships with customers, suppliers and others having business dealings with the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreement. In addition, without limiting the generality of the foregoing, except as expressly permitted in this Agreement, from the date hereof until the Control TimeClosing Date, the Company and its Subsidiaries shall:
(i) continue to conduct its businesses and operations in the ordinary and usual course;
(ii) continue to exercise the same degree of care that the Company has previously exercised with respect to its business and, in any case, not less than the degree of care which is standard in the industry with respect to its business;
(iii) use its commercially reasonable efforts to maintain its relationships with its reinsurers, agents, policyholders, providers of specialty insurance products to its agents and other parties with whom it has business relationships; and
(iv) cooperate with Guarantee to facilitate a smooth transition of ownership of the Company, including consulting with Guarantee as to the advisability of retaining certain employees necessary to the continued operations of the Company and using its best commercially reasonable efforts to enter into severance agreements acceptable to the Company and Guarantee with those officers, employees or agents whose services Guarantee determines will not be required either immediately after Closing or shortly thereafter.
(b) From the date hereof until the Closing Date, the Company shall notnot (except as is contemplated or permitted by this Agreement or with the written approval of Guarantee, and which approval shall cause its subsidiaries not to:be unreasonably withheld):
(a) (i) authorizesell, declare pledge, dispose of, lease or encumber any material Assets (including, without limitation, any indebtedness owed to, or any claims held by, it) except in the ordinary course;
(ii) terminate the insurance licenses, insurance permits and insurance authorities, or fail to timely file all reports required by government agencies which administer such Licenses, permits and authorities, except in the ordinary course;
(iii) declare, set aside or pay any dividends on dividend or make other distributions distribution payable in cash, stock, property or otherwise with respect of to any shares of its stock capital stock;
(except for dividends by a wholly owned subsidiary of the Company iv) redeem, purchase or otherwise acquire or offer to its parent and except for distributions necessary for the Company to maintain its REIT qualificationredeem, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem purchase or otherwise acquire any shares of stock its capital stock;
(v) transfer any Assets or liabilities of the Company to any new subsidiary or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securitiesnew Affiliate;
(bvi) except in accordance with the Share Option Agreementacquire (by merger, issue, deliver, sell, pledge consolidation or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares acquisition of its beneficial interests, stock or Assets) any corporation, partnership or other securitybusiness organization or division thereof or make any investment either by purchase of stock or securities, contribution to capital or property transfer other than in the ordinary course;
(cvii) amend or propose to amend its declaration of trust, certificate of incorporation or bylaws incur any indebtedness for borrowed money (or similar organizational documents);
(d) (i) acquire or agree to acquire any material assets (including securities) outside the ordinary course or merge or consolidate with any person or engage in any similar transaction or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company and other than loans to auto dealers in the ordinary course of business which wouldconsistent with past practice), when originatedissue any debt securities, qualify as Eligible Receivables under the Warehouse Line;
(e) sellassume, leaseguarantee, license, encumber endorse or otherwise dispose as an accommodation become responsible for the obligations of any of its assets individual or any interest therein, other than in the ordinary course (including the disposition of any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization;
(f) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse Line;
(g) make or rescind any Tax election or settle or compromise any Tax liability of the Company or any of its subsidiaries;
(h) make or agree to make any capital expenditures other than in amounts of less than $75,000 in the aggregate;
(i) pay, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person entity other than the Company and or its Subsidiaries, make any subsidiary of the Companyloans or advances, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in incur any other way secure the payment of compensation liabilities, obligations or benefits under commitments or forgive or discharge any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each caseindebtedness, other than in the ordinary course of business;
(qviii) securitize, or create any financing arrangements except in the nature ordinary course of a collateralized debt obligation with respect tobusiness, adopt or amend any accounts receivablebonus, loans profit-sharing, thrift, savings, compensation, stock option, pension retirement, deferred compensation, employment or other assetsemployee benefit plan, agreement, trust, plan, fund or other arrangement for the benefit or welfare of any of their employees, except where required by any state or federal law or regulation;
(rix) amend other than the severance arrangements contemplated by Section 6.6(a)(iv), increase or modify authorize an increase in the compensation or fringe benefits of any employee or pay or authorize any payment or any benefit not required by an existing plan and arrangement not in the ordinary course of business;
(x) promote or demote any key employee or take any action to reduce the staff of the Company (except for terminations for documented cause);
(xi) terminate the services of the Company's present brokers, agents and general agents and other sales personnel;
(xii) issue, authorize or propose the issuance of additional shares of their capital stock of any class other than pursuant to the conversion of shares of the Company's Series B Convertible Preferred Shares and Series C Convertible Preferred Shares or stock options or warrants outstanding on the date hereof, or securities convertible into or rights, warrants or options to acquire any such shares;
(xiii) split, combine or reclassify any shares of their capital stock or declare, set aside or pay any dividend or distribution payable in cash, stock, property or otherwise with respect to any of their capital stock, except for dividends in the normal course to satisfy the debt service requirements under the Company's existing credit agreement between with Xxxxxx Guaranty Trust Company and Company Financial Advisorof New York;
(xiv) enter into any transaction not in the ordinary course of business;
(xv) cancel, compromise or settle any material claim, or waive or release any right other than in the ordinary course of business; or
(sxvi) authorize any of, or commit or agree to take any of, the foregoing actions or any action that would result in a breach dispose of any representation, warranty or agreement investment securities of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions to the Merger not being satisfied or in a material delay Company, without Guarantee's prior consent other than in the satisfaction ordinary course of such conditionsbusiness.
Appears in 1 contract
Conduct of the Company’s Business. During the period from the date of (a) Except as may be contemplated by Schedule 6.05(a) or elsewhere expressly and specifically required by this Agreement and continuing until the earlier of the Effective Time and the date nominees of or as required by applicable Law or as Parent or Subsidiary constitute a majority of the members of the board of trustees of the Company (such earlier time, the “Control Time”), except either as consented may otherwise consent to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response consent shall not be unreasonably withheld or delayed), from the date hereof and prior to the Effective Time, the Company shall, will and shall will cause each of its subsidiaries to, conduct Subsidiaries to (i) operate its and their business only in the ordinary course and (ii) use commercially reasonable best efforts to conduct its preserve business organizations and their business relationships with third parties and to keep available the services of their goodwill, present officers and employees, provided that it does not require additional compensation, and preserve its and their relationships with customers, suppliers suppliers, distributors and others having business dealings with the Company it and its subsidiariesmaintaining properties, machinery and to maintain the Company’s qualification as a REIT, equipment in each case good repair and operating condition (subject to normal wear and tear).
(b) Notwithstanding anything contained in this Agreement to the terms of or contemplated by this Agreement. In addition, without limiting the generality of the foregoingcontrary, except as expressly permitted may be otherwise set forth on Schedule 6.05(b) or as Parent may otherwise consent to in this Agreementwriting (which, in the case of clauses (vii) and (viii) below, shall not be unreasonably withheld or delayed), from the date hereof until and prior to the Control Effective Time, the Company shall not, will not and shall cause will not allow any of its subsidiaries not Subsidiaries to:
(ai) (iA) authorizedeclare, declare set aside or pay any dividends on dividend or make other distributions distribution in respect of any of its capital stock (except for intercompany cash dividends paid by a wholly owned subsidiary of the Company to its parent Subsidiaries and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), (iiDisposition) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iiiB) repurchasedirectly or indirectly redeem, redeem purchase or otherwise acquire any shares of stock of the Company or any of its subsidiaries equity securities with property or any other securities thereof or any rights, warrants or options to acquire any such shares or other securitiesstock;
(b) except in accordance with the Share Option Agreement, issue, deliver, sell, pledge or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other security;
(c) amend or propose to amend its declaration of trust, certificate of incorporation or bylaws (or similar organizational documents);
(d) (i) acquire or agree to acquire any material assets (including securities) outside the ordinary course or merge or consolidate with any person or engage in any similar transaction or (ii) make any loanspayments or other distributions (whether in cash or kind) or provide any benefits of any kind to any of the Consideration Recipients or any of their respective Affiliates or any Related Parties whether pursuant to any management, advances service or capital contributions to, or investments in, any other person, advisory agreement other than to the Company under any Plan as solely contractually required, all of which such exceptions are set forth on Schedule 6.05(b)(ii);
(iii) sell, transfer or dispose of any wholly owned subsidiary assets of the Company and its Subsidiaries to any of the Consideration Recipients or any of their respective Affiliates or any Related Parties other than loans to auto dealers in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse LineDisposition;
(e) sell, lease, license, encumber or otherwise dispose of any of its assets or any interest therein, other than in the ordinary course (including the disposition of any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization;
(f) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse Line;
(giv) make any loans or rescind advances to any Tax election officers, directors or settle or compromise any Tax liability employees of the Company or any of its subsidiariesSubsidiaries;
(hv) make pay any Transaction Fees or agree other fees, expenses, charges and other payments to make any capital expenditures third-party advisors (including fees, costs and expenses of legal counsel, accountants, investment bankers, experts, consultants, brokers and other than in amounts of less than $75,000 in the aggregaterepresentatives and consultants, appraisal fees, costs and expenses and travel, lodging, entertainment and associated expenses);
(i) pay, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (iivi) waive, defer, release or assign otherwise cancel or delay any material rights amount, right, value, benefit or claims, (iii) waive other obligation owed or due to it by any of the benefits of, Consideration Recipients or agree to modify in any manner, of their respective Affiliates or any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactionsRelated Parties;
(ivii) increase the compensation conduct its cash management customs and practices or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, incur intercompany charges other than in the ordinary course of business;
(qviii) securitize, or create any financing arrangements conduct its working capital management customs and practices other than in the nature ordinary course of a collateralized debt obligation with respect business, including, but not limited to, any not accelerating the collection of accounts receivable, loans receivable or other assetsdelaying the payment of accounts payable;
(rix) amend assume, indemnify, guarantee or modify otherwise incur any Liability of any of the existing agreement between Consideration Recipients or any of their respective Affiliates or any Related Parties;
(x) except for indebtedness for borrowed money (including letters of credit) made pursuant to the revolving credit facility under the Credit Agreement in the ordinary course of business or pursuant to intercompany arrangements, incur or assume any Indebtedness or guarantee any such Indebtedness or issue or sell any debt securities or warrants or rights to acquire any debt securities of the Company or any of the Subsidiaries or guarantee (or become liable for) any Indebtedness of others or pay any Indebtedness (other than payments or settlements of Indebtedness required by the terms of the instruments governing such Indebtedness);
(xi) engage in any transaction with any Affiliate (excluding the Company and Company Financial Advisorany Subsidiary) other than the Disposition, or the terms of agreements disclosed pursuant to Section 6.05(b) of this Agreement; or
(sxii) authorize any of, or commit or agree to take any of the foregoing actions.
(c) Without limiting the generality of Section 6.05(a), except as may be contemplated by Schedule 6.05(c) or elsewhere expressly and specifically required by this Agreement or as Parent may otherwise consent to in writing (which consent shall not be unreasonably withheld or delayed), from the date hereof and prior to the Effective Time, the Company will not and will not allow any of its Subsidiaries to:
(i) split, combine or reclassify any of its capital stock or issue any other securities in respect of, in lieu of or in substitution for shares of its capital stock or amend the foregoing actions terms of any of its securities, authorize for issuance, issue, sell, deliver (whether through the issuance or granting of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any stock of any class or any action that would result other voting securities (including indebtedness having the right to vote) or equity equivalents (including stock options and stock appreciation rights) other than issuances pursuant to the exercise of Company Stock Options granted to employees and former employees prior to the date of this Agreement, or amend in a breach any respect any of the terms of any representationsuch securities or equity equivalents outstanding on the date hereof;
(ii) amend its certificate of incorporation or by-laws or equivalent organizational documents;
(iii) sell, warranty lease, transfer, mortgage, pledge, encumber or agreement dispose of any assets that are material to the Company and the Subsidiaries, taken as a whole, or make any material capital expenditures, except, in each case, (A) in the ordinary course of business, including pursuant to the 2015 capital expenditure budget, or (B) pursuant to any Material Contract in effect on the date hereof;
(iv) make any loans, advances or capital contributions material to the Company and the Subsidiaries, taken as a whole, outside of the ordinary course of business, except to any of the Subsidiaries;
(v) except as may otherwise be required by applicable Law or regulation, GAAP or the Financial Accounting Standards Board, (A) change any of the accounting principles or methods of tax or accounting or (B) make or rescind any material tax
(vi) except (1) to the extent required under the terms of the applicable Plan as in effect on the date hereof and consistent with past practice or as required by applicable Law, (2) in the case of new employees to the extent consistent with past practice, (3) pursuant to the Collective Bargaining Agreements or (4) as contemplated by Section 1.05: (A) enter into, adopt, amend or terminate any Plan or any agreement, arrangement, plan or policy between itself and one or more of its directors or executive officers, (B) increase in any manner the compensation or fringe benefits of any director, officer or employee or (C) pay or provide for any severance payment;
(vii) except as may be required by applicable Law, dissolve, liquidate, recapitalize or merge or consolidate with or into any other person or engage in any other material reorganization;
(viii) commence any litigation or other legal proceeding other than in the ordinary course of business or settle any litigation or other legal proceeding for money damages in excess of $100,000 or material restrictions upon the operations of the Company contained or the Subsidiaries;
(ix) materially amend or terminate or materially waive compliance with the terms of or breaches under, any Material Contract (including, but not limited to, the Phoenix Color Agreement), or enter into a new contract or agreement or arrangement that would constitute a Material Contract (other than a new customer contract that would constitute a Material Contract), except in this Agreement the ordinary course of business and on arms’ length terms;
(x) enter into any new labor or collective bargaining agreement or materially amend or terminate any of the Collective Bargaining Agreements of the Company or any of its Subsidiaries;
(xi) other than inventory, property, plant and equipment spending, and other assets acquired in the ordinary course of business, acquire properties or assets, including stock or other equity interests of another Person, with a value in excess of $100,000, whether through merger, consolidation, share exchange, business combination or otherwise;
(xii) except as may be required by applicable Law, adopt, terminate or amend any Plan of the Company or its Subsidiaries;
(xiii) hire any new employee (other than hires of employees with annual base salary or wages of less than $100,000 in the ordinary course of business) or increase the compensation (including bonuses and any service, advisory or management fees and other benefits) payable on or after the date hereof to any director, executive officer or employee except for increases in the ordinary course of business to employees earning less than $100,000 in base compensation per year, or provided for in any contracts or Plans in effect on the date hereof or required by any applicable Law;
(xiv) make any commitments for capital expenditures that shall not be satisfied prior to the Closing Date, other than (i) commitments contemplated by the 2015 capital expenditure budget of the Company and its Subsidiaries, (ii) expenditures for routine or emergency maintenance and repair or (iii) other expenditures in an amount that does not exceed, individually or in the aggregate, $250,000;
(xv) fail to maintain in effect the insurance policies in effect as of the date when made hereof, or as insurance policies with comparable coverage;
(xvi) engage in any promotional sales or discount or other activity with customers outside the ordinary course of any future date business that has or would result reasonably be expected to have the effect of accelerating to pre-Closing periods sales that would otherwise be expected to occur in post-Closing periods; or
(xvii) agree to take any of the conditions to foregoing actions.
(d) In the Merger not being satisfied event that the Company or in any of its Subsidiaries pays any Transaction Fee between the date hereof and the Closing, such payment shall reduce on a material delay in dollar-for-dollar basis the satisfaction of such conditionsMaximum Transaction Fees Amount.
Appears in 1 contract
Samples: Merger Agreement (Jarden Corp)
Conduct of the Company’s Business. During the period from the --------------------------------- date of this Agreement and continuing until the earlier of (i) the Effective Time and Time; (ii) the date nominees designees of Parent or Subsidiary constitute a majority of the members of the board Board of trustees Directors of the Company or (such earlier timeiii) termination of this Agreement pursuant to its terms, the “Control Time”), except either as consented to Company covenants and agrees that unless Parent shall otherwise consent in writing (including by email such consent not to be unreasonably withheld or other electronic transmissiondelayed) by Parent or as set forth in response to a written or oral request therefore from Section 7.2 of the Company -------------------------- Disclosure Schedule or as otherwise expressly contemplated or ------------------- permitted by this Agreement and except as required in order to comply with the current terms of any Contract provided or made available to Parent on or prior to the date of this Agreement:
(which response a) the business of the Company and the Company Subsidiaries shall be conducted only in, and the Company and the Company Subsidiaries shall not be unreasonably delayed)take any action except in, the Company shall, and shall cause its subsidiaries to, conduct its and their business in the ordinary course of business consistent with past practice and the Company shall use commercially reasonable best efforts to conduct preserve intact its and their its subsidiaries present business relationships with third parties organizations and to goodwill and keep available the services of their present its and its subsidiaries officers and key employees, provided that it does not require additional compensation, and preserve its and their relationships with customers, suppliers and others having business dealings with the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreement. In addition, without limiting the generality of the foregoing, except as expressly permitted in this Agreement, from the date hereof until the Control Time, the Company shall not, and shall cause its subsidiaries not to:
(a) (i) authorize, declare or pay any dividends on or make other distributions in respect of any of its stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(b) except in accordance with neither the Share Option AgreementCompany nor any Company Subsidiary shall, issuedirectly or indirectly, deliver, do any of the following: (i) sell, pledge pledge, lease, dispose of or encumber (or permit any subsidiary to sell pledge, lease dispose of or encumber) any property or assets, except for sales, leases or authorize or propose other dispositions of inventory and immaterial assets and encumbrances and pledges in the issuanceordinary course of business consistent with past practice; (ii) except as contemplated hereby, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other security;
(c) amend or propose to amend its declaration of trust, certificate or articles of incorporation or bylaws by-laws (or similar comparable organizational documents); (iii) split, combine, or reclassify any shares of its capital stock, or declare, set aside or pay any dividend on or make any other distributions (whether in cash, stock, property or otherwise) with respect to such shares (except for any dividends paid by a wholly- owned direct or indirect Company Subsidiary to such Company Subsidiary's parent); (iv) redeem, purchase, acquire or offer to acquire (or permit any subsidiary to redeem, purchase, acquire, or offer to acquire) any shares of its capital stock except in connection with the termination of the employment of any employee in a manner consistent with past practice; or (v) enter into any contract, agreement, commitment or arrangement with respect to any of the matters set forth in this paragraph (b);
(dc) neither the Company nor any Company Subsidiary shall (i) issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or securities convertible or exchangeable for, or any options, warrants or rights of any kind to acquire any shares of, its capital stock of any class whether pursuant to the Company Stock Plans or otherwise; provided that the Company may issue shares of Company Common Stock upon exercise of Options that are outstanding on the date hereof and are exercised in accordance with their respective terms as in effect on the date hereof; (ii) acquire or agree to acquire (by merger, consolidation or acquisition of stock or assets) any material assets corporation, partnership or other business organization or division thereof (including securitiesexcept an existing wholly-owned subsidiary); (iii) outside except in the ordinary course or merge or consolidate of business, consistent with any person or engage in any similar transaction or (ii) past practice, make any loans, advances or capital contributions to, or investments in, any other person, other than by the Company or a wholly owned subsidiary of the Company to the Company or any wholly owned subsidiary of the Company and other than loans to auto dealers Company; (iv) except in the ordinary course of business which wouldbusiness, when originatedconsistent with past practice, qualify as Eligible Receivables under the Warehouse Line;
(e) sell, lease, license, encumber or otherwise dispose of any of its assets or any interest therein, other than in the ordinary course (including the disposition of any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization;
(f) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse Line;
(g) make or rescind any Tax election or settle or compromise any Tax liability of the Company or any of its subsidiaries;
(h) make or agree to make any capital expenditures other than in amounts of less than $75,000 in the aggregate;
(i) pay, discharge, settle discharge or satisfy any Claim claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise); (v) enter into or modify any material lease, contract, agreement or commitment (including, without limitation, any such contract, lease, agreement or commitment of a nature that would be required to be filed as an exhibit to Form 10-K under the Exchange Act), other than contracts for sale, lease or rent of the payment, discharge, settlement Company's or satisfaction, the Company Subsidiaries' products in the ordinary course of business consistent with past practice or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements supply contracts in the ordinary course of business except for cash payments (x) paid by any insurer or person other than consistent with the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary practice of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in during the aggregate.
12 months preceding the date of this Agreement; (jvi) (i) terminate modify, amend or terminate any material contractassign, (ii) waive, release or assign relinquish any material contract rights or amend any material rights or claims; (vii) settle or compromise any claim, (iii) waive action, suit or proceeding pending or threatened against the benefits ofCompany, or, if the Company may be liable or agree obligated to modify in provide indemnification against the Company's directors or officers, before any mannercourt, any confidentialitygovernmental agency or arbitrator, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), except in the ordinary course of business, enter into ; provided that nothing shall require any material contracts action that might impair or transactions;
(i) increase otherwise affect the compensation or benefits obligation of any directorinsurance carrier under any insurance policy maintained by the Company; (viii) sell, trusteeassign or transfer any patents, officer trademarks, trade names, copyrights, trade secrets or employee, except for, in the cases of non-officer employees, increases other intangible assets (it being understood that a license in the ordinary course that are consistent with past practice, (ii) adopt of business of any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee asset of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing type referred to in this paragraph clause (kix) shall preclude the payment by the Company not be deemed a sale, assignment or transfer of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
such assets); (l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(nix) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, officer or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, executive compensation other than in the ordinary course of business; (x) change, in any material way, its accounting principles, practices or methods except as required by GAAP or the rules and regulations promulgated by the SEC; or (xi) agree, in writing or otherwise, to take any of the actions listed in clauses (i) through (x) above;
(qd) securitize, or create neither the Company nor any financing arrangements in the nature of a collateralized debt obligation with respect to, any accounts receivable, loans or other assets;
(r) amend or modify the existing agreement between Company and Company Financial Advisor; or
(s) authorize any of, or commit or agree to Subsidiary shall take any of, the foregoing actions or any action that would result in a breach of knowingly make any representation, representation or warranty or agreement of the Company contained hereunder, untrue or inaccurate in this Agreement as of the date when made any respect at, or as of any future date time prior to, the Effective Time, or would result omit to take any action necessary to prevent any such representation or warranty from being untrue or inaccurate in any such time;
(e) each of the conditions Company and the Company Subsidiaries shall use its reasonable best efforts, to the Merger extent not being satisfied prohibited by the foregoing provisions of this Section 7.2, to maintain its relationships with its customers, licensors, licensees, distributors and others having business dealings with them, and if requested by Parent, the Company shall schedule, and the management of the Company shall participate in, meetings of representatives of Parent with employees of the Company or any Company Subsidiary; and
(f) the Company shall cause its management to consult with Parent regarding the Company's cash position and borrowing needs and the Company shall reasonably cooperate with Parent in seeking to operate the business in a material delay way that avoids or minimizes the need to incur borrowings under its existing credit facilities; provided, however, that nothing in this sentence shall require the Company or its management to take any action that in the satisfaction reasonable opinion of such conditionsthe Company's management would be contrary to the best interests of the Company.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Siemens Aktiengesellschaft)
Conduct of the Company’s Business. During the period from (a) From the date of this Agreement and continuing hereof until the earlier of the Effective Time and the date nominees of Parent or Subsidiary constitute a majority of the members of the board of trustees of the Company (such earlier time, the “Control Time”), except either as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed)Closing Date, the Company shall, and shall cause each of its subsidiaries to, Subsidiaries to (i) conduct its and their business in the ordinary course consistent with past practices (other than as specified herein) and shall use commercially its reasonable best efforts to conduct preserve intact its business organizations and their business relationships with third parties and to keep available the services of their its present officers and employeesemployees in the ordinary course of business consistent with past practice, provided that it does not require additional compensation(ii) provide notice to Liberty, no later than the fifth Business Day following the end of each calendar month, of the aggregate number of Company Options granted, the aggregate number of Company Options exercised, the aggregate number of Employee Shares issued and preserve its and their relationships with customers, suppliers and others having business dealings with the Company and its subsidiaries, and to maintain aggregate number of Employee Shares reacquired by the Company’s qualification as a REIT, in each case subject case, during such preceding calendar month, and (iii) not engage in any transactions or take any actions which, pursuant to Section 6.2(b) of the Stockholders Agreement, would require prior notice to or approval of Liberty without obtaining Liberty's prior approval, provided, however, that (x) notwithstanding the parenthetical references in Sections 6.2(b)(ix) and (xi)(A) of the Stockholders Agreement to Liberty's consent or approval not being unreasonably withheld, Liberty will have the right to grant or withhold its consent with respect to matters covered in such Sections 6.2(b)(ix) and (xi)(A) in its sole discretion and (y) notwithstanding the provisions of Section 6.2(b)(xi)(C) of the Stockholders Agreement, no Affiliate Transactions will be entered into or engaged in without the prior consent of Liberty, other than Affiliate Transactions set forth in Schedule 11.02(a) of the Seller Disclosure Schedule (of Comcast Parties as Seller Parties) or Schedule 11.02(a) of the Purchaser Disclosure Schedule (of Comcast Parties as Purchasers), which may continue to be engaged in upon the terms set forth in the applicable agreement referred to in such Schedule 11.02(a) (or as otherwise described in such Schedule 11.02(a) to the terms of or contemplated by this Agreement. extent no agreement is referenced) and in a manner and in amounts consistent with past practice.
(b) In additionaddition to, and without limiting the generality of the foregoing, except as expressly permitted in this Agreementimmediately preceding paragraph (a), from the date hereof until the Control TimeClosing Date, the Company shall will not, and shall cause will not permit its subsidiaries not Subsidiaries to, except as required or specifically contemplated by this Agreement or consented to or approved in advance by Liberty, in its sole discretion:
(ai) (iA) authorizemake any change in or amendments to its charter or bylaws or any partnership agreement or membership agreement to which it is a party; (B) issue, declare grant, sell or pay deliver any dividends on shares of its capital stock or make other distributions in respect of any of its other equity interests or securities, or any securities convertible into, or options, warrants or rights of any kind to subscribe to or acquire, any shares of its capital stock or any of its other equity interests or securities, or any phantom shares, phantom equity interests or stock or equity appreciation rights, or the entering into of any contract, agreement, commitment or arrangement with respect to the foregoing, other than (except for dividends I) (x) up to an aggregate of 24,000 Company Options that may be issued under the Stock Plan (provided, however, that notwithstanding the foregoing, if the Company requests Liberty's prior consent to the issuance of more than an aggregate of 24,000 Company Options pursuant hereto, Liberty will not unreasonably withhold its prior consent; and, further provided, that no one Person may receive more than 1,500 Company Options, in the aggregate), (y) Company Options that may be issued pursuant to agreements set forth in Section 6.01(b)(i) of the Company Disclosure Schedule, or (z) in connection with the exercise and subsequent reload of the Company Options set forth in Section 6.01(b)(i) of the Company Disclosure Schedule, provided, in each case, that such issuance is made in the ordinary course of business consistent with past practices and no Company Options may be issued to a Subject Holder, and (II) issuances of Employee Shares upon exercise of Company Options outstanding on the date hereof and disclosed pursuant to this Agreement in accordance with their terms in effect on the date hereof, and issuances of capital stock or partnership or other equity interests by a direct or indirect wholly owned subsidiary Subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), immediate parent; (iiC) split, combine or reclassify the outstanding shares of its capital stock or any of its other outstanding equity interests or securities or issue any capital stock or issue other equity interests or authorize securities in exchange for any such shares or propose the issuance interests; (D) redeem, purchase or otherwise acquire, directly or indirectly, any shares of capital stock or any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(b) except in accordance with the Share Option Agreement, issue, deliver, sell, pledge or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other security;
(c) amend or propose to amend its declaration of trust, certificate of incorporation or bylaws (or similar organizational documents);
(d) (i) acquire or agree to acquire any material assets (including securities) outside the ordinary course or merge or consolidate with any person or engage in any similar transaction or (ii) make any loans, advances or capital contributions to, or investments in, any other person, Subsidiaries other than to Company Options, Employee Shares acquired by the Company from an employee of the Company or any wholly owned subsidiary one of the Company and other than loans to auto dealers its Subsidiaries in the ordinary course of business which wouldconsistent with past practices (and in the case of Employee Shares, when originatedfollowing the exercise by such employee of his Company Options) and as set forth in Section 1.01 of the Company Disclosure Schedule, qualify (E) except as Eligible Receivables under contemplated by this Agreement, amend or modify any outstanding options, warrants, or rights to acquire, or securities convertible into shares of its capital stock or other equity interests or securities, or any phantom shares, phantom equity interests or stock or equity appreciation rights, or amend or modify the Warehouse Line;
Stock Plan or any Voting Debt or adopt or authorize any other stock or equity appreciation rights, restricted stock or equity, stock or equity purchase, stock or equity bonus or similar plan, arrangement or agreement; (eF) sell, lease, license, encumber make any other changes in its capital structure or otherwise dispose the partnership or membership structure of any of its assets Affiliates; (G) declare, set aside, pay or make any dividend or other distribution or payment (whether in cash, property or securities) with respect to its capital stock or other securities; (H) sell or pledge any stock, equity or partnership interest owned by it or in any Affiliate, except in the ordinary course of business; or (I) enter into or assume any Contract or modify or amend any existing Contract (other than entering into, modifying or amending any Company Shareholders Agreement or any interest thereinapplicable option agreements solely for the purpose of grants of Company Options made in compliance with clause (B) of this paragraph (i)) with respect to the foregoing;
(ii) file a petition under the Bankruptcy Act or any other insolvency law, or admit in writing its bankruptcy, insolvency or general inability to pay its debts;
(iii) commence or settle any litigation or arbitration which is other than in the ordinary course of business or arising in relation to this Agreement and is likely to have a material impact on the Company and its Subsidiaries, taken as a whole, other than any settlement of the action titled Liberty Media Corporation v. Comcast Corporation, et al., Civil Action No. 20220 pending in the Delaware Chancery Court;
(iv) enter into any Contract, except (x) any such Contract entered into in the ordinary course of business consistent with past practices and (y) the execution and delivery of which do not require Liberty's consent under this Agreement or the Stockholders Agreement, provided, that notwithstanding the foregoing, the Company and its Subsidiaries will not enter into any Contracts which would result in the Company's representation set forth in Section 5.18 ceasing to be true and correct as if made on the date of such Contract;
(A) modify or change in any material respect any Contract, other than in the ordinary course of business consistent with past practices, provided that notwithstanding the foregoing, the Company and its Subsidiaries will not enter into any Contracts which would result in the Company's representation set forth in Section 5.18 ceasing to be true and correct; (including the disposition of any assets acquired B) except as a result of a foreclosure)required pursuant to binding agreements, or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization;
(f) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of othersotherwise required by Law, enter into any “keep-well” new employment, consulting, severance or other retirement agreement, or make any amendment or modification to any existing such agreement to maintain with any financial statement condition of another person officer or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse Line;
(g) make or rescind any Tax election or settle or compromise any Tax liability employee of the Company or any of its subsidiaries;
(h) make Subsidiaries or agree otherwise increase compensation, bonus or other benefits payable to make any capital expenditures officer or employee of the Company or any of its Subsidiaries, in each case other than in amounts the ordinary course of less than $75,000 business consistent with past practices, or, in each case, except for increases, amendments or other actions that would not, in the aggregate;
, materially increase the compensation or benefit expense of the Company or any of its Subsidiaries, or increases, amendments or other actions that would provide “stay” bonuses for officers and employees of the Company or any of its Subsidiaries who are not Subject Holders not to exceed $5,000,000 in the aggregate; (iC) terminate the employment of any of the executive officers listed on Schedule 6.01(b)(v)(C) of the Company Disclosure Schedule, other than for “cause” (as defined in the applicable employment agreement), death or disability, in each case pursuant to the applicable employment agreement; (D) establish, amend or modify in any material respect any Employee Plan, except to the extent required by any Law or the existing terms of such Employee Plan or by the provisions of this Agreement; (E) secure any of its outstanding unsecured Debt, provide additional security for any of its outstanding secured Debt or grant, create or suffer to exist any Lien on or with respect to any property, assets or rights of the Company or any of its Subsidiaries, other than pursuant to letters of credits and articles of consignment entered into in the ordinary course of business consistent with past practice (provided, that the principal or face amount outstanding or available under such letters of credit and articles of consignment does not exceed the fair market value of the property, assets or rights secured by such Lien); (F) pay, discharge, settle discharge or satisfy any Claim claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement discharge or satisfaction, satisfaction in the ordinary course of business and consistent with past practices of liabilities reflected or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included reserved against in the Company Filed SEC Documents Balance Sheet or incurred since the date of such financial statements Company Balance Sheet Date in the ordinary course of business except for cash payments (x) paid by any insurer or person other than and consistent with past practices and scheduled repayments of indebtedness reflected on the Company and Balance Sheet; (G) cancel any subsidiary of the Company, plus (y) an amount paid by the Company Debts or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release waive or assign any material claims or rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief tangible and specific performance or (iv) except, with respect to this clause (ivintangible), except in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are business and consistent with past practice, practices or pursuant to Section 7.11; (iiH) adopt any material amendment to a Benefit Plan, (iii) enter into, amend incur or modify any employment, consulting, severance, termination assume or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations become obligated with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee item of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each caseDebt, other than in the ordinary course of businessbusiness consistent with past practices including pursuant to letters of credits and articles of consignment, provided that the aggregate principal or face amount of all such Debt incurred or assumed does not exceed $25,000,000 in the aggregate; (I) accelerate the payment of, or otherwise prepay, any existing outstanding indebtedness for borrowed money except as required by any Contract to which the Company is a party or except in the ordinary course of business and consistent with past practices; (J) other than as contemplated or otherwise permitted by this Agreement and other than the customary and reasonable business expense advancement practices of the Company and its Subsidiaries conducted in the ordinary course of business and consistent with past practices, make any advance or loan to or engage in any transaction with any of its officers or employees not required by the terms of an existing Contract described in Section 5.17 of the Company Disclosure Schedule; or (K) enter into or assume any Contract, obligation, commitment or arrangement with respect to any action otherwise prohibited by clauses (A) through (J) above;
(qvi) securitize(A) make, revoke or amend any material Tax election, (B) make any material change in any accounting or Tax practice or policy, (C) execute any waiver of restrictions on material assessment or collection of any material Tax, or create (D) enter into or amend any financing arrangements in the nature of a collateralized debt obligation material agreement or settlement with respect to, any accounts receivable, loans or other assets;
(r) amend or modify the existing agreement between Company and Company Financial AdvisorTaxing Authority; or
(svii) authorize take any of, action or commit or agree fail to take any of, the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would is reasonably likely to result in any of the conditions to the Merger set forth in Article 8 not being satisfied or in a material delay in the satisfaction of such conditionssatisfied.
Appears in 1 contract
Conduct of the Company’s Business. During Except as contemplated by this Agreement, or as set forth in Section 5.1 of the Disclosure Schedule, during the period from the date of this Agreement and continuing until hereof to the earlier of the Effective Time and the date nominees of Parent or Subsidiary constitute a majority of the members of the board of trustees of Closing Date, Sellers will cause the Company (such earlier time, the “Control Time”), except either as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed), the Company shall, and shall cause its subsidiaries to, conduct its business and their business operations in the ordinary course and of business in a manner consistent with past practice and, to the extent consistent therewith, to use commercially reasonable efforts to conduct its and their business relationships with third parties and to keep available the services of their present officers and employees, provided that it does not require additional compensation, and preserve its and their current relationships with customers, suppliers and others having business dealings with the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreementit. In addition, without Without limiting the generality of the foregoing, except as expressly permitted in contemplated by this Agreement, or as set forth in Section 5.1 of the Disclosure Schedule, during the period from the date hereof until of this Agreement to the Control TimeClosing Date, without the prior written consent of Buyer, Sellers will not permit the Company shall not, and shall cause its subsidiaries not to:
(a) create, incur, assume or guarantee any indebtedness for borrowed money (i) authorizeincluding, declare or pay any dividends on or make other distributions without limitation, obligations in respect of any of its stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectivescapital leases), (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(b) except in accordance with the Share Option Agreement, issue, deliver, sell, pledge sell or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, deliver any shares of its beneficial interests, capital stock or any other securitysecurities convertible into or exchangeable for any shares of its capital stock, or grant or enter into any options, warrants, rights, agreements or commitments with respect to the issuance of its capital stock, or amend any terms of any such securities or agreements;
(c) amend increase the rate of compensation of, or propose to amend its declaration of trust, certificate of incorporation or bylaws (or similar organizational documents);
(d) (i) acquire pay or agree to acquire pay any material assets (including securities) outside the ordinary course or merge or consolidate with any person or engage in any similar transaction or (ii) make any loans, advances or capital contributions benefit to, its directors, officers or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company and other than loans to auto dealers in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse Line;
(e) sell, lease, license, encumber or otherwise dispose of any of its assets or any interest therein, other than in the ordinary course (including the disposition of any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization;
(f) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoingemployees, except for borrowings under the Warehouse Line;
(g) make or rescind any Tax election or settle or compromise any Tax liability of the Company or any of its subsidiaries;
(h) make or agree to make any capital expenditures other than in amounts of less than $75,000 in the aggregate;
(i) pay, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their termsas may be required by any existing plan, of Claims whether recognized including, without limitation, any Plan, agreement or disclosed in arrangement; provided, however, that nothing contained herein shall prevent the most recent financial statements (or Company from making the notes theretospecial payments listed on Section 5.1(c) of the Company included in Disclosure Schedule to the Company Filed SEC Documents individuals listed thereon;
(d) enter into, adopt or incurred since the date of such financial statements amend any Plan, or employment or severance agreement, except in the ordinary course of business or as required by law, and except that nothing contained herein shall prevent the Company from entering into severance agreements, the material terms of which have been disclosed to Buyer, with those employees identified in Section 5.1(d) of the Disclosure Schedule;
(e) except for cash payments the sale of inventory in the ordinary course of business, (xi) paid sell, lease, transfer, or otherwise dispose of any properties or assets, real, personal or mixed, which have an aggregate book value in excess of $25,000 or (ii) mortgage or encumber any properties or assets, whether real or personal, which have an aggregate book value;
(f) acquire or agree to acquire by merging or consolidating with, or by purchasing the stock or a substantial portion of the assets of, or by any insurer or person other than the Company and manner, any subsidiary of the Company, plus (y) an amount paid by the Company business or any subsidiary of the Company not exceeding $100,000 per Claimcorporation, liability partnership, association or obligation other business organization or $500,000 for all Claims division thereof or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate., to the Company;
(j) (ig) modify, amend or terminate any material contractlease of Real Property (including terminations, (ii) waive, release modifications or assign any material rights amendments in connection with renewals or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), terminations of leases in the ordinary course of business, enter into );
(h) make any material contracts tax election or transactionssettle or compromise any material federal, state, local or foreign tax liability or agree to an extension of a statute of limitations;
(i) increase amend or otherwise change its organizational documents;
(i) record sales and maintain its books of account other than in accordance with its prior practices consistently applied, (ii) maintain the compensation or benefits of any director, trustee, officer or employee, except for, machinery and equipment and other fixed assets used in the cases business other than in good operating and usable condition, and in a state of non-officer employeesgood maintenance and repair, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Planreasonable wear and tear excepted, and (iii) enter into, amend purchase or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with agreement to purchase or lease (including any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(please amendment, renewal or extension) accelerate the collection of receivables any real property, computer software or defer the payment of payableshardware, or modify the payment terms non-resale items or make or enter into any commitments to make any capital expenditures in excess of any receivables or payables, in each case, other than $25,000 in the ordinary course of business;
(q) securitize, or create any financing arrangements in the nature of a collateralized debt obligation with respect to, any accounts receivable, loans or other assets;
(r) amend or modify the existing agreement between Company and Company Financial Advisoraggregate; or
(sk) authorize any ofagree, whether in writing or commit or agree otherwise, to take any of, the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in do any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditionsforegoing.
Appears in 1 contract
Samples: Stock Purchase Agreement (Applied Industrial Technologies Inc)
Conduct of the Company’s Business. During The Company covenants that during the period from the date of this Agreement and continuing until the earlier of (i) the Effective Time and (ii) the date nominees termination of this Agreement pursuant to its terms, unless Parent shall otherwise consent in writing (such consent not to be unreasonably withheld, delayed or Subsidiary constitute a majority conditioned), and except to the extent required by Law, the rules and regulations of the members of Nasdaq Stock Market or other regulatory organization applicable to the board of trustees Company or Section 6.1 of the Company Disclosure Schedule, and except as otherwise expressly required or permitted by this Agreement:
(such earlier timea) the business of the Company and the Company Subsidiaries shall be conducted only in, and the “Control Time”)Company and the Company Subsidiaries shall not take any action, except either as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed), the Company shall, and shall cause its subsidiaries to, conduct its and their business in the ordinary course of business and the Company shall use commercially reasonable best efforts to conduct preserve intact its present business organization and their business relationships with third parties goodwill and to keep available the services of their present its officers and employees, provided that it does not require additional compensation, key employees and preserve to maintain its and their relationships with customers, suppliers suppliers, licensors, licensees, distributors and others having business dealings with the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject them to the terms of or contemplated by this Agreement. In addition, without limiting end that its goodwill and ongoing business shall not be impaired in any material respect at the generality of the foregoing, except as expressly permitted in this Agreement, from the date hereof until the Control Effective Time, ;
(b) the Company shall not, and shall not cause its subsidiaries not or permit any Company Subsidiary to:
(a) , do any of the following: (i) authorizesell, declare pledge, license, lease, leaseback, dispose of or pay encumber or subject to a Lien any dividends on property or make assets (including any ownership interests, voting securities or other distributions rights, instruments or securities in respect of any of its stock (Company Subsidiary), except for dividends by a wholly owned subsidiary (x) dispositions of inventory and immaterial assets and (y) encumbrances and pledges, in each case, in the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence ordinary course of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), business consistent with past practice; (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(b) except in accordance with the Share Option Agreement, issue, deliver, sell, pledge or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other security;
(c) amend or propose to amend its declaration articles of trust, certificate of incorporation organization or bylaws (or similar comparable organizational documents); (iii) except for declaration and payment of the Company’s regular quarterly dividends with normal record and payment dates consistent with past practice, which shall not exceed $0.10 in cash per share of outstanding Company Common Stock, split, combine or reclassify any shares of its capital stock, or declare, set aside or pay any dividend on or make any other distributions (whether in cash, stock, property or otherwise) with respect to Voting Company Debt, Company Capital Stock or any equity interests of any Company Subsidiary (except for any dividends paid by a wholly owned direct or indirect Company Subsidiary to such Company Subsidiary’s parent); (iv) redeem, purchase, acquire or offer to acquire any shares of its Voting Company Debt, Company Capital Stock or any equity interests of any Company Subsidiaries; or (v) enter into any Contract with respect to any of the matters listed in clauses (i) through (iv) above;
(dc) the Company shall not, and shall not cause or permit any Company Subsidiary to, (i) issue, sell, pledge or dispose of, or agree to issue, sell, pledge or otherwise encumber or subject to a Lien, or dispose of, any shares of, or securities convertible or exchangeable for, or any options, warrants or rights of any kind to acquire any shares of, its capital stock of any class or Company Voting Debt or any “phantom” stock, “phantom” stock rights, stock appreciation rights or other stock-based compensation awards or other property or assets whether pursuant to the Company Plans or otherwise; provided, however, that the Company may issue shares of Company Common Stock (a) upon exercise of Options that are outstanding on the date of this Agreement or are permitted under this Agreement to be issued following the date of this Agreement and are exercised in accordance with their respective terms as in effect on the date of this Agreement and (b) upon exercise of rights under the ESPP outstanding as of the date of this Agreement; (ii) directly or indirectly acquire or agree to acquire (by merger, consolidation or acquisition of stock or assets) any material corporation, partnership or other business organization or division thereof (except an existing wholly owned Company Subsidiary); (iii) directly or indirectly acquire any asset or assets that, individually, has a purchase price in excess of $2.5 million or, in the aggregate, have a purchase price in excess of $25 million, except for new capital expenditures, which shall be subject to the limitations of clause (including securitiesiv) outside below, and except for purchases of components, raw materials or supplies in the ordinary course of business consistent with past practice; (iv) make any new capital expenditure or merge expenditures which, individually, is in excess of $7.5 million or, in the aggregate, are in excess of $50 million; (v) except for borrowings in the ordinary course of business under credit facilities in existence on the date of this Agreement (including all future renewals and extensions thereof), incur, create or consolidate with assume any indebtedness for borrowed money or guarantee any such indebtedness of another person, enter into any “keep well” or other Contract to maintain the financial condition of another person or engage in enter into any similar transaction arrangement having the economic effect of any of the foregoing (except for guarantees by the Company of any obligations of a Company Subsidiary and except for guarantees by a Company Subsidiary of any obligations of the Company or another Company Subsidiary); (iivi) make any loans, advances or capital contributions to, or investments in, any other person, Person other than (a) loans or advances to customers in the Company form of trade credit or any wholly owned subsidiary of the Company and other than loans to auto dealers deferred purchase price arrangements in the ordinary course of business which wouldbusiness, when originated, qualify as Eligible Receivables under (b) by the Warehouse Line;
(e) sell, lease, license, encumber or otherwise dispose of any of its assets Company or any interest thereinCompany Subsidiary to or in the Company or any Company Subsidiary, (c) advances to employees (other than officers of the Company) in the ordinary course of business, not to exceed $20,000 in each individual case and $1 million in the aggregate, or (d) by the Company or a wholly owned Company Subsidiary to the Company or a wholly owned Company Subsidiary; (vii) enter into, modify or renew any material lease (including the disposition of any assets acquired Lease), Contract, agreement or commitment to extent listed as a result Contract, lease, agreement or commitment of a foreclosurenature that would be required under the Exchange Act to be filed as an exhibit to the Company’s Annual Report on Form 10-K (such Contracts, “10-K Contracts”); (viii) terminate, amend, modify, assign, waive, release or relinquish any material contract rights or any other material rights or claims or cancel any indebtedness in each case with respect to any 10-K Contract; (ix)
(A) waive any benefits of, or adopt a plan of complete agree to modify in any respect, or, subject to the terms hereof, fail to enforce, or partial liquidationconsent to any matter with respect to which consent is required under, dissolution, merger, consolidation, restructuring any standstill or other reorganization;
(f) incur or suffer similar Contract to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse Line;
(g) make or rescind any Tax election or settle or compromise any Tax liability of which the Company or any of its subsidiaries;
Company Subsidiary is a party or (hB) make waive any material benefits of, or agree to make modify in any capital expenditures other than material respect, or, subject to the terms hereof, fail to enforce in amounts of less than $75,000 in the aggregate;
(i) payany material respect, dischargeor consent to any matter with respect to which consent is required under, settle any material confidentiality or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by similar Contract to which the Company or any subsidiary of the Company not exceeding $100,000 per ClaimSubsidiary is a party; (x) enter into, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) Contract or waive, release or assign any material rights or claimsclaims thereunder, which if so entered into, modified, amended, terminated, waived, released or assigned would reasonably be expected to (a) adversely affect in any material respect the Company and Company Subsidiary taken as a whole, (iiib) waive impair in any material respect the ability of the Company to perform its obligations under this Agreement or (c) prevent or materially delay the consummation of the transactions contemplated by this Agreement; (xi) settle or compromise any material claim, action, suit or proceeding pending or threatened against the Company (for purposes of this clause (xi), material shall mean any claim, action, suit or proceeding with a value of at least $2 million); (xii) change its accounting principles, practices or methods, except as may be required by the SEC, applicable Law or GAAP; (xiii) enter into any material Contract to the extent consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement would reasonably be expected to conflict with, or result in a violation or breach of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to the loss of a benefit under, or result in the creation of any Lien in or upon any of the properties or other assets of the Company or any Company Subsidiary under, or require Parent to license or transfer any of its IP Rights or other material assets under, or give rise to any increased, additional, accelerated, or guaranteed right or entitlements of any third party under, or result in any material alteration of, any provision of such Contract; (xiv) enter into any material Contract containing any restriction on the ability of the Company or any of its affiliates to assign its rights, interests or obligations thereunder, unless such restriction excludes or otherwise would not apply to any assignment to Parent or any of its affiliates deemed to occur upon consummation of the Merger; (xv) sell or transfer to any person or otherwise dispose of or allow to lapse any material registered Company IP (except to the extent such activity occurs in the ordinary course of business as part of the ordinary course of the sale of any products or services); (xvi) terminate, cancel, amend or modify any material insurance policy maintained by the Company or any Company Subsidiary which is not promptly replaced by a comparable amount of insurance coverage (except for scheduled expirations of such policies); (xvii) other than in connection with a termination of this Agreement pursuant to Section 6.6(d), redeem the Company Rights or amend, modify or terminate the Company Rights Agreement, or render it inapplicable to (or otherwise exempt from the application of the Company Rights Agreement) any Person or action (other than Parent and Subsidiary in connection with the delivery and performance of this Agreement); or (xviii) agree, in writing or otherwise, to take any of the actions listed in clauses (i) through (xvii) above; and
(d) except as required to ensure that any Company Plan or Company Benefit Agreement is then in compliance with applicable Law or to comply with any Company Plan or Company Benefit Agreement entered into prior to the date of this Agreement (to the extent complete and accurate copies of which have been heretofore delivered to Parent), (i) adopt, enter into, terminate or amend any collective bargaining agreement, Company Plan or Company Benefit Agreement, (ii) increase in any manner the compensation, bonus or fringe or other benefits of, or agree to modify in pay any mannerbonus of any kind or amount whatsoever to, any confidentialitycurrent or former director, standstill officer, employee or similar agreementconsultant other than increases to cash compensation or cash bonuses to employees and consultants who are not executives or directors, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), which are made in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (iiiii) adopt pay any material amendment to a benefit or amount not required under any Company Plan or Company Benefit PlanAgreement or any other benefit plan or arrangement of the Company or any Company Subsidiary as in effect on the date of this Agreement, other than payment of cash compensation in the ordinary course of business, consistent with past practice, (iiiiv) enter intogrant or pay any severance, change of control, retention or termination pay or benefits or increase in any manner the severance, change of control, retention or termination pay or benefits of any Participant, (v) grant any awards under any bonus, incentive, performance or other compensation plan or arrangement, Company Plan or Company Benefit Agreement (including the grant of Options, Restricted Stock Units, “phantom” stock, stock appreciation rights, “phantom” stock rights, stock-based or stock-related awards, performance units or restricted stock, (vi) amend or modify any employment, consulting, severance, termination Option or similar agreement with any director, trustee, officer or employeeRestricted Stock Unit, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (vvii) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit employee plan, agreement, contract or arrangement or Company Plan or Company Benefit Agreement, (viii) take any action to accelerate the vesting or time of payment of any compensation agreement or arrangement; benefit under any Company Plan or Company Benefit Agreement or (ix) materially change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan Pension Plan or change the timing or manner in which contributions to any pension plan Pension Plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, other than in the ordinary course of business;
(q) securitize, or create any financing arrangements in the nature of a collateralized debt obligation with respect to, any accounts receivable, loans or other assets;
(r) amend or modify the existing agreement between Company and Company Financial Advisor; or
(s) authorize any of, or commit or agree to take any of, the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditionsdetermined.
Appears in 1 contract
Samples: Merger Agreement (American Power Conversion Corporation)
Conduct of the Company’s Business. During (a) Except (i) as expressly required by this Agreement, (ii) with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (iii) as set forth on Section 4.1(a) of the Company Disclosure Schedule, (iv) as required by Applicable Law, or (v) for any action taken by a Company Group Member that is reasonably necessary to respond to COVID-19 and COVID-19 Measures, during the period from the date of this Agreement and continuing Date until the earlier of the Effective Time and the date nominees termination of Parent or Subsidiary constitute a majority this Agreement pursuant to the terms of the members of the board of trustees of the Company Article VI (such earlier time, the “Control TimePre-Closing Period”); provided, except either as consented however, that, to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed)extent reasonably practicable, the Company shall notify Parent prior to taking any action pursuant to this clause (v) or, if such prior notice is not reasonably practicable, as promptly as reasonably practicable after taking such action, each Company Group Member shall, and shall and, except as limited by applicable Healthcare Laws, agrees to use reasonable best efforts to cause its subsidiaries the Affiliated Practices to, (A) conduct its and their business in the ordinary course Ordinary Course of Business and (B) use commercially reasonable efforts to conduct maintain and preserve intact its business organization and their the goodwill of those having business relationships with third parties it (including by using commercially reasonable efforts to preserve its assets and technology and relationships with its customers and suppliers) and to keep available retain the services of their its present officers and employees, provided that it does not require additional compensation, and preserve its and their relationships with customers, suppliers and others having business dealings with the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreement. In addition, without executive officers.
(b) Without limiting the generality of the foregoing, except (v) as expressly permitted in required by this Agreement, from (w) as required by Applicable Law, (x) as set forth on Section 4.1(b) of the date hereof until Company Disclosure Schedule, (y) with the Control Timeprior written consent of Parent, or (z) for any action taken by a Company Group Member that is reasonably necessary to respond to COVID-19 and COVID-19 Measures, during the Pre-Closing Period; provided, however, that, to the extent reasonably practicable, the Company shall notify Parent prior to taking any action pursuant to this clause (z) or, if such prior notice is not reasonably practicable, as promptly as reasonably practicable after taking such action, Company shall not, and shall cause not permit any of its subsidiaries not Subsidiaries to:
(a) (i) authorizeissue, declare sell, grant, dispose of, pledge or pay otherwise encumber (other than Permitted Liens) any dividends on shares of its capital stock, voting securities or make equity interests, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its capital stock, voting securities or equity interests, or any rights, warrants, options, calls, commitments or any other distributions in respect agreements of any character to purchase or acquire any shares of its stock (except for dividends by a wholly owned subsidiary capital stock, voting securities or equity interests or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any shares of its capital stock, voting securities or equity interests; provided that the Company may issue shares of Company Common Stock upon the conversion of the Company to its parent Preferred Stock that are outstanding on the Agreement Date, and except for distributions necessary for shares of Company Common Stock upon the exercise of Company to maintain its REIT qualification, avoid Options and Company Warrants that are outstanding on the incurrence of any taxes under Section 857 of Agreement Date and in accordance with the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), terms thereof;
(ii) split(A) redeem, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem purchase or otherwise acquire any of its outstanding shares of capital stock, voting securities or equity interests, or any rights, warrants, options, calls, commitments or any other agreements of any character to acquire any shares of its capital stock, voting securities or equity interests, (B) amend (including by reducing an exercise price or extending a term) or waive any of its rights under any provision of the Company Option Plan or any agreement evidencing any outstanding stock option or other right to acquire capital stock of the Company or any of its subsidiaries restricted stock purchase agreement or any other securities thereof similar or related contract, except for any rightsamendment or waiver required to effect the treatment of Company Options, warrants Company Phantom Stock Awards or options to acquire Company Warrants as set forth in Section 1.2(a) or (C) form any such shares or other securitiesSubsidiary of the Company;
(biii) except in accordance with declare, set aside for payment or pay any dividend on (other than as required by the Share Option Agreement, issue, deliver, sell, pledge or encumberCompany Charter), or authorize or propose the issuance, delivery, sale, pledge or encumbrance make any other distribution in respect of, any shares of its beneficial interests, capital stock or otherwise make any other securitypayments to the Stockholders in their capacity as such;
(civ) amend split, combine, subdivide or propose reclassify any shares of its capital stock;
(v) incur or assume any indebtedness for borrowed money or guarantee such indebtedness other than (x) indebtedness between and among the Company Group Members or incurred from the Parent Group, (y) indebtedness under the Existing Credit Agreement and (z) other indebtedness in an aggregate principal amount outstanding not to amend its declaration exceed $200,000 per month in order to satisfy the working capital needs of trustthe Company (other than amounts drawn in accordance with Section 4.24); provided, certificate that, in the case of incorporation or bylaws clause (z), such indebtedness is on substantially similar terms to (or similar organizational documentsno less favorable than) the terms in agreement for indebtedness that has been disclosed to Parent prior to the Agreement Date, or the terms for any indebtedness that may be drawn pursuant to Section 4.24;
(vi) pay, discharge or satisfy (i) any liability to any Person who is a Stockholder, or officer or director of the Company (other than compensation due for services as an officer or director) or (ii) any claim or liability arising other than the payment, discharge or satisfaction of liabilities (w) reflected or reserved against in the Company Financial Statements, (x) contemplated by or otherwise incurred pursuant to performance of this Agreement, including Transaction Expenses, (y) incurred in the Ordinary Course of Business after the Company Balance Sheet Date, or (z) incurred in connection with the performance of executory Contracts to which any Company Group Member is a party;
(vii) sell, transfer, lease, mortgage, encumber or otherwise dispose of or subject to any Lien (including pursuant to a sale-leaseback transaction or an asset securitization transaction), other than Permitted Liens, any of its material properties or assets to any Person, except (A) in the Ordinary Course of Business, or (B) dispositions of obsolete assets having a de minimis value;
(viii) enter into any agreement for the purchase, sale or lease of any real property;
(ix) make any capital expenditure outside of the Ordinary Course of Business (and for the avoidance of doubt any capital expenditure made in accordance with the Company’s budget that is in effect as of the date hereof shall be deemed in the Ordinary Course of Business);
(dx) materially change the amount of any insurance coverage or terminate without replacing any insurance coverage;
(ixi) acquire by merging or consolidating with, by purchasing a substantial portion of the assets of, or by purchasing all of or a substantial equity interest in, or by any other manner, any Person or division, business or equity interest in any Person, or otherwise acquire or agree to acquire any material assets (including securities) outside that are material, individually or in the ordinary course or merge or consolidate with aggregate, to any person or engage in any similar transaction or (ii) make any loans, advances or capital contributions toCompany Group Member, or investments inenter into any Contract with respect to a joint venture, strategic alliance or partnership;
(xii) transfer or license from any other personPerson any rights to any Intellectual Property, or transfer or license to any Person any rights to any Intellectual Property, other than as related to nonexclusive licenses of in the Ordinary Course of Business, or transfer or provide a copy of any Software to any Person (including any current or former employee or consultant of any Company Group Member or any wholly owned subsidiary contractor or commercial partner of any Company Group Member), other than providing access to Software to current employees and consultants of any Company Group Member, including those involved in the development of the Company and other than loans products, on a need to auto dealers know basis or in the ordinary course Ordinary Course of business which would, when originated, qualify as Eligible Receivables under the Warehouse LineBusiness;
(exiii) selltake any action regarding a patent, leasepatent application or other Intellectual Property right that would abandon, licenseallow to lapse, encumber or otherwise dispose of any of its assets cancel the applicable registration or any interest therein, application;
(xiv) other than in the ordinary course Ordinary Course of Business, enter into, terminate (other than automatic termination in accordance with the terms thereof) or amend in any material respect any Contract that, upon entry by any Company Group Member thereto, constitutes, or would constitute if it had been entered into prior to the Agreement Date, a Material Contract;
(xv) (A) hire or engage, or offer to hire or engage, any employees or independent contractors, other than (x) any physicians, (y) at-will employees with a base salary or annualized fees less than $225,000 and (z) providers with a base salary or annualized fees less than $250,000, (B) terminate the employment or engagement or materially change the terms and conditions of employment or engagement of any current Company Personnel, other than (x) a termination for cause or (y) current Company Personnel with a base salary or annualized fees less than $300,000 in the Ordinary Course of Business; (C) materially increase the compensation and/or benefits provided or to become provided by any Company Group Member or Affiliated Practice to any current Company Personnel, other than pursuant to a Contract (including any Company Plan) in effect on the disposition Agreement Date or as may be established, adopted or amended following the Agreement Date and not in contravention of the Agreement, (D) promise, make, grant, or increase any retention, severance, change of control, termination, or other similar payment or benefit to any Company Personnel or other Person other than where the cost of such payments constitute Transaction Expenses; (E) materially increase or amend the coverage or benefits available under any Company Plans, or otherwise modify or amend in any material respect or terminate any such Company Plan, except as required by Applicable Law or the terms of such Company Plan;
(xvi) make, change or revoke any election concerning Taxes (including an election pursuant to Section 965 of the Code), adopt or change any accounting method in respect of Taxes, file any U.S. federal, state or non-U.S. income Tax Return or any other material Tax Return without the prior consent of Parent prior to filing, file any amended Tax Return, enter into or apply for any closing or other similar agreement or ruling with respect to Taxes, voluntary disclosure application or agreement or similar process, settle or compromise any Tax claim or assessment, consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment, enter into any Tax Sharing Agreement, assume or agree to indemnify any liability for Taxes of another Person, or surrender any right to claim a material Tax refund, or enter into intercompany transactions giving rise to deferred gain or loss of any assets acquired kind or take any other similar action relating to the filing of any Tax Return or the payment of any Tax if such similar action would have the effect of increasing the Tax liability of Parent or its Affiliates for any Tax period ending after the Closing Date, make any changes in accounting methods, principles or practices, except insofar as required by a result change in GAAP or Applicable Law;
(xvii) make any changes in accounting methods, principles or practices, except insofar as required or permitted by a change in GAAP (or an interpretation or application thereof) or Applicable Law;
(xviii) intentionally delay or postpone, in any material respect, payment of a foreclosure)any accounts payable or commissions or any other liability or obligation, or enter into any agreement or negotiation with any party to extend the payment date of any accounts payable or commissions or any other liability or obligation, or accelerate sales or the collection of (or discount) of any accounts or notes receivable in advance of the applicable due date;
(xix) amend the Company Organizational Documents or the equivalent organizational or governing documents of any of the Company Group Members, except, in each case, for any immaterial or ministerial amendments thereto;
(xx) adopt a plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization, merger, consolidation, restructuring consolidation or other reorganizationreorganization other than the Transaction Agreements;
(fxxi) incur settle, compromise or suffer initiate any material litigation, proceeding or investigation (other than (A) settlements solely for cash and not in excess of $100,000, (B) for routine collection of accounts receivable, (C) to exist enforce the Company’s rights under this Agreement or (D) to enforce any indebtedness for borrowed money other material rights of any Company Group Member or guarantee Affiliated Practice);
(xxii) cancel, release or waive any such indebtednessmaterial claims or rights held by any Company Group Member or Affiliated Practice; or
(xxiii) authorize, guarantee any debt of othersor agree, enter into any “keep-well” in writing or other agreement otherwise, to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of take any of the foregoing, except for borrowings under the Warehouse Line;foregoing actions.
(gc) make In the event that the Company is required to obtain the prior written consent of Parent for any action pursuant to Section 4.1, the Company shall provide Parent with a written description of the action in accordance with Section 8.7, and Parent shall respond as soon as reasonably practicable (email in accordance with Section 8.7 being sufficient) and such response shall be deemed to be rejected if Parent does not respond within 3 Business Days following receipt of Company’s written request for such response; provided, that notwithstanding anything herein to the contrary, Parent will not unreasonably withhold, delay or rescind condition its consent to the taking of: (1) any Tax election action prohibited by clause “(ii)(C)”, “(iv)”, “(v)”, “(vi)”, “(ix)”, “(x)”, “(xii)”, “(xiii)”, “(xiv)”, “(xvii)” or settle “(xx)” above; or compromise (2) any Tax liability action prohibited by clause “(xxii)” above (to the extent relating to clause “(ii)(C)”, “(ix)”, “(x)”, “(xii)”, “(xiii)”, “(xiv)”, “(xvii)”, “(xxi)” or “(xxii)” above).
(d) The Company shall deliver to Parent true and complete copies of the unaudited condensed consolidated balance sheets and statements of operations and comprehensive loss, stockholders’ deficit, and cash flow of the Company or Group as of and for the three-month periods ended March 31, 2021, as promptly as practicable following the date hereof and shall use commercially reasonable efforts to deliver to Parent any unaudited financial statements, including consolidated balance sheets and consolidated statements of its subsidiaries;
(h) make or agree to make any capital expenditures other than income, changes in amounts of less than $75,000 in the aggregate;
(i) paystockholder equity, dischargeand cash flows, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included and its consolidated Subsidiaries as may be required in connection with the Form S-4 Registration Statements, as promptly as practicable following Parent’s request for such financial statements. If the Effectiveness Date has not occurred prior to August 12, 2021, the Company Filed SEC Documents or incurred since shall use its reasonable best efforts to deliver to Parent, as soon as reasonably practicable following August 12, 2021, the unaudited condensed consolidated balance sheets and statements of operations and comprehensive loss, stockholders’ deficit, and cash flow of the Company Group as of and for the three-month period ended June 30, 2021 (collectively, the “2021 Financial Statements”), which shall comply with the applicable accounting requirements and with the rules and regulations of the SEC, the Exchange Act and the Securities Act applicable to a registrant; provided, that upon delivery of such 2021 Financial Statements, the representations and warranties set forth in Section 2.5 shall be deemed to apply to the 2021 Financial Statements with the same force and effect as if made as of the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregatethis Agreement.
(je) (i) modifyNothing contained herein shall give to Parent, amend directly or terminate indirectly, rights to control or direct the operations of any material contract, (ii) waive, release Company Group Member or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement Affiliated Practice prior to the fullest extent practicableEffective Time. Prior to the Effective Time, including by seeking injunctive relief each Company Group Member and specific performance or (iv) exceptAffiliated Practice shall exercise, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practicethe terms and conditions of this Agreement, (ii) adopt any material amendment complete control and supervision of its operations. Notwithstanding anything to a Benefit Planthe contrary contained herein, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment no consent of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations Parent shall be required with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as matter set forth in this Section 6.1(k) of 4.1 or elsewhere in the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject Agreement to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist extent the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, other than in the ordinary course of business;
(q) securitize, or create any financing arrangements in the nature of a collateralized debt obligation with respect to, any accounts receivable, loans or other assets;
(r) amend or modify the existing agreement between Company and Company Financial Advisor; or
(s) authorize any of, or commit or agree to take any of, the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction requirement of such conditionsconsent would violate Applicable Law.
Appears in 1 contract
Conduct of the Company’s Business. During (a) Until the period from the date of this Agreement and continuing until the earlier of the Effective Time and the date nominees of Parent or Subsidiary constitute a majority of the members of the board of trustees of the Company (such earlier time, the “Control Time”), except either as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed)Closing Date, the Company shall, and shall cause its subsidiaries to, will conduct its business and their business affairs only in the ordinary course and so that the representations and warranties contained in Section 3 hereof will be true and correct in all material respects at and as of the Closing Date (except as to representations and warranties that refer to a specified earlier date), except for changes specifically permitted or contemplated by this Agreement, and so that the conditions to be satisfied by the Company on or prior to the Closing Date shall then have been satisfied. The Company will use commercially reasonable efforts to conduct its and their business relationships with third parties and to keep available the services of their present officers and employees, provided that it does not require additional compensation, maintain and preserve its business and their relationships with customers, suppliers and others having business dealings with the Company and its subsidiariesoperations, and to maintain preserve its relationships with persons or entities having business relations with the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreement. In addition, without .
(b) Without limiting the generality of the foregoing, pending the Closing Date, without the prior written consent of CWS, which consent shall not be unreasonably withheld:
(i) The Company will not amend its Articles of Incorporation or Bylaws.
(ii) The Company will not dispose of any of the Assets having a value of $5,000 or more, or dispose of Assets having in the aggregate a value of $25,000 or more, except for the sale of water in the ordinary course of business.
(iii) Except for normal expenses incurred in the ordinary course of business and those expenses described on Schedule 5.2(b)(iii), the Company will not incur any additional liabilities in an aggregate amount of $25,000 or more, whether for borrowed money or otherwise, or encumber any of the Assets, except for borrowing in the ordinary course of business, not to exceed $500,000 at any one time outstanding, under the Company’s existing credit facilities or agreements.
(iv) The Company will not by any means, make any acquisition of, or investment in, assets (other than in the ordinary course of business and consistent with past practice) or capital stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) of any other Person in any transaction or any series of transactions (whether or not related).
(v) The Company will not take any action that would reasonably be expected to adversely affect its ability to consummate the transactions contemplated hereby.
(vi) The Company will not fail to maintain in force all existing liability insurance policies and fidelity bonds relating to the System or the Assets, or policies or bonds providing substantially the same coverage.
(vii) The Company will not fail to advise CWS in writing of any material adverse effect or of any event, occurrence or circumstance which is likely to cause a material adverse effect on any of the Assets or liabilities (whether absolute, accrued, contingent or otherwise) or operations of the Company, taken as expressly permitted a whole.
(viii) The Company will not fail to maintain the Assets in this Agreementgood condition, from the date hereof until the Control Timereasonable wear and tear excepted.
(ix) Except as disclosed on Schedule 5.2(b)(ix), the Company shall not enter into any new leases or contracts or material modifications or renewals of any existing leases or contracts that would impose any aggregate obligations on the Company or CWS or on any of the Assets in excess of $25,000.
(x) The Company shall not, in a manner unfavorable to the Company, (A) make any material alterations or additions to the Assets, except as may be required by law or as may reasonably be required for the prudent repair and shall cause its subsidiaries not to:maintenance of the Assets, (B) change or attempt to change (or consent to any change in) the zoning or other legal requirements applicable to the Property, or (C) cancel, amend or modify in any material respect any material easement, License, permit or other rights held by the Company.
(axi) The Company shall not (iA) take any of the actions described in Section 3.20(a); (B) amend any of the Plans listed on Schedule 3.20(b); (C) enter into or amend any employment, severance, retention, consulting or special pay arrangements with any Person; or (D) increase the compensation payable to any of its directors, officers or employees.
(xii) The Company shall not (A) issue, sell or otherwise dispose of or agree to issue, sell or otherwise dispose of, any shares of its capital stock, or any other security convertible into or exchangeable for shares of its capital stock; (B) acquire or agree to acquire (through redemption, repurchase or otherwise) any of its shares of capital stock; or (C) authorize, grant or agree to grant any options, warrants or other rights to acquire any of its shares of capital stock, or any other security convertible into or exchangeable for shares of capital stock of the Company; or (D) reclassify, split up or otherwise change any of its capital stock.
(xiii) The Company shall not declare or pay any other dividends on or make any other distributions in respect of any of its stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(b) except in accordance with the Share Option Agreement, issue, deliver, sell, pledge or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interestscapital stock, stock or any other security;except for ordinary and customary quarterly dividend payments by the Company, which amounts may be payable by the Company only if the Closing Date has not occurred as of said record dates.
(cxiv) amend or propose to amend The Company shall not (A) change (x) its declaration methods of trustaccounting, certificate of incorporation or bylaws (or similar organizational documents);
(d) (i) acquire or agree to acquire any material assets (including securities) outside the ordinary course or merge or consolidate with any person or engage in any similar transaction except as required by GAAP or (iiy) its fiscal year, (B) settle or compromise any Tax Liability or refund claim, or (C) make any loansmaterial Tax election inconsistent with prior practice or, advances if no comparable Tax election has previously been made, which would increase the current or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary future Tax Liability of the Company and other than loans to auto dealers in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse Line;Company.
(exv) sell, lease, license, encumber or otherwise dispose of any of its assets or any interest therein, other than in the ordinary course The Company shall not (including the disposition of any assets acquired as a result of a foreclosure), or A) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring recapitalization or other reorganization;
(f) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse Line;
(g) make or rescind any Tax election or settle or compromise any Tax liability of the Company or any of its subsidiaries;
(h) make or agree to make any capital expenditures other than in amounts of less than $75,000 in the aggregate;
(i) pay, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary similar reorganization of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (ivB) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the delay collection of receivables notes or defer the payment accounts receivable in advance of payables, or modify the payment terms of any receivables or payables, in each casebeyond their regular due dates, other than in the ordinary course of business;business and consistent with past practice.
(qxvi) securitizeThe Company shall not make or propose any change in its rates, charges, standards of service or create any financing arrangements accounting from those in effect on the nature date of a collateralized debt obligation with respect to, any accounts receivable, loans or other assets;this Agreement.
(rxvii) amend or modify the existing agreement between The Company and Company Financial Advisor; or
(s) authorize any ofshall not authorize, or commit or agree to take any of, do anything prohibited by the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditionsforegoing.
Appears in 1 contract
Samples: Merger Agreement (Connecticut Water Service Inc / Ct)
Conduct of the Company’s Business. During Except as expressly contemplated by this Agreement, or as set forth in Section 6.1 of the Company Disclosure Schedule, during the period from the date of this Agreement and continuing until hereof to the earlier of the Effective Time and the date nominees of Parent or Subsidiary constitute a majority of the members of the board of trustees of the Company (such earlier time, the “Control Time”), except either as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed)Closing Date, the Company shallwill and will cause each Subsidiary, and shall Seller will cause its subsidiaries toeach of them, to conduct its the Company's and their the Subsidiaries' business and operations in the ordinary course of business consistent with past practice and to use commercially reasonable best efforts to conduct its preserve their respective assets, current business and their business goodwill and relationships with third parties and to keep available the services of their present officers and employees, provided that it does not require additional compensation, and preserve its and their relationships with customers, suppliers suppliers, Governmental Authorities and others having with which they have significant business dealings with the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreementdealings. In addition, without Without limiting the generality of the foregoing, except as expressly permitted in contemplated by this Agreement, or as set forth in Section 6.1 of the Company Disclosure Schedule, during the period from the date hereof until to the Control TimeClosing Date, without the prior written consent of Buyer, the Company shall notwill not and will not permit any Subsidiary, and shall cause its subsidiaries Seller will not permit the Company or any Subsidiary, to:
(a) (i) authorize, declare amend or pay any dividends on or make other distributions in respect modify its certificate of any of its stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares incorporation or other securitiesorganizational documents;
(b) except in accordance with the Share Option Agreement, issue, deliver, sell, pledge or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other security;
(c) amend or propose to amend its declaration of trust, certificate of incorporation or bylaws (or similar organizational documents);
(d) (i) acquire or agree to acquire any material assets (including securities) outside the ordinary course or merge or consolidate with any person or engage in any similar transaction or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company and other than loans to auto dealers in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse Line;
(e) sell, lease, license, encumber or otherwise dispose of any of its assets or any interest therein, other than in the ordinary course (including the disposition of any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring restructuring, recapitalization or other reorganization;
(fc) incur create, incur, assume or suffer to exist guarantee any indebtedness for borrowed money (including, without limitation, obligations in respect of capital leases), other than in the ordinary course of business consistent with past practice;
(d) (i) issue, sell, deliver, pledge, dispose of or guarantee otherwise encumber any such indebtednessshares of its capital stock or any securities exercisable for, guarantee convertible into or exchangeable for any debt shares of othersits capital stock, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person grant or enter into any arrangement having options, warrants, rights, agreements or commitments with respect to the economic effect issuance of its capital stock or such securities, or amend any terms of any such capital stock or securities, (ii) other than cash dividends made by the Company or any of the foregoingSubsidiaries to the Company or a Subsidiary, except declare, set aside or pay any dividends or distributions on, or make any other distributions in respect of, any shares of its capital stock or any securities exercisable for, convertible into or exchangeable for borrowings under the Warehouse Lineany shares of its capital stock, (iii) split, combine or reclassify any shares of its outstanding equity securities or (iv) purchase, redeem or otherwise acquire or dispose of any shares of its capital stock or any securities exercisable for, convertible into or exchangeable for any shares of its capital stock;
(ge) make increase the rate of compensation, bonus opportunity or rescind otherwise increase the pension, welfare, severance or other benefits of, or pay or agree to pay any Tax election benefit or settle bonus to, its directors, officers or compromise employees, except in the ordinary course of business or as may be required by any Tax liability existing agreement, practice, arrangement or plan, including, without limitation, any Plan or Non-U.S. Plan, agreement or arrangement; provided, however, that nothing contained herein shall prevent the Company from making the special payments listed on Section 6.1(e) of the Company Disclosure Schedule to the individuals listed thereon;
(f) (i) enter into, adopt or amend any employment or severance agreement, Plan or Non-U.S. Plan, in each case, to any director, officer or employee of the Company or any of its subsidiaries;
(h) make or agree to make any capital expenditures other than in amounts of less than $75,000 in the aggregate;
(i) pay, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contractSubsidiaries, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment payment, of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or Company Plan, to the extent not already provided in any such Company Plan, (iii) materially change any actuarial or other assumption assumptions used to calculate funding obligations with respect to any pension plan Company Plan or to change the timing or manner in which contributions to any pension plan such plans are made or the basis on which such contributions are determined determined, except as may be required by GAAP or other Applicable Law, including the requirements of Section 409A of the Code or (viiv) take forgive any action that could give rise to severance benefits payable loans to any officerdirectors, trustee, director, officers or employee employees of the Company or any subsidiary as a result of consummation its Subsidiaries;
(g) (i) make any written or oral communications generally to the officers or employees of the Company or any of Subsidiary relating to the transactions contemplated by this Agreement; Agreement or (ii) make any written or oral communications to the officers or employees of the Company or any Subsidiary which may create or establish obligations with respect to Buyer's compensation and benefit policies or arrangements, in each case without first having provided to Buyer a copy of the intended communication, giving Buyer a reasonable period of time to review and comment on the communication, and cooperating with Buyer in providing any such mutually agreeable communication;
(h) sell, lease, transfer, mortgage, encumber, or dispose of any properties or assets, real, personal or mixed, of the Company or its Subsidiaries other than (i) sales of inventory in the ordinary course of business consistent with past practice, (ii) sales of excess or obsolete assets or (iii) Permitted Liens;
(i) (i) acquire or agree to acquire by merging or consolidating with, or by purchasing any stock of or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, (ii) acquire or agree to acquire any assets that nothing are material, individually or in this paragraph the aggregate, to the Company or any of its Subsidiaries, taken as a whole, except for purchases of inventory and raw materials in the ordinary course of business (or as permitted by Section 6.1(h)) or (iii) make any investment in, or make any loan, advance or capital contribution to, any person (other than the Company or a Subsidiary);
(j) enter into, materially modify or amend or terminate any Material Contract outside the ordinary course of business consistent with past practice;
(k) shall preclude (i) grant, extend, amend (except as required in the payment by diligent prosecution of the Owned Intellectual Property subject to a pending application), waive or modify any rights in or to, nor sell, assign, lease, transfer, license, let lapse, abandon, cancel, or otherwise dispose of, or extend or exercise any option to sell, assign, lease, transfer, license, or otherwise dispose of, any material Intellectual Property used in the business of the Company or its Subsidiaries or any material Intellectual Property Contracts, (ii) fail to diligently prosecute the Company's and its Subsidiaries' patent applications, or (iii) fail to exercise a right of accruedrenewal or extension under any material Intellectual Property Contract;
(l) cancel any debts or waive any material claims or rights of substantial value (including the cancellation, but unpaid bonuses to employees compromise, release or assignment of any indebtedness owed to, or material claims held by, the Company or any Subsidiary), except for 2004 and retroactive salary adjustments in each case as set forth those listed in Section 6.1(k6.1(l) of the Company Disclosure Schedule;
(lm) take any action fail to exempt pay its trade accounts payable in the ordinary course of business consistent with past practice or make not subject to extend the terms of payment, whether by contract, amendment or to otherwise waive or cause to be inapplicable (x) the provisions course of dealing, of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, trade account payable other than in the ordinary course of businessbusiness consistent with past practice;
(n) incur, authorize or commit to make any capital expenditure, other than (i) maintenance, repair and upkeep in the ordinary course of business consistent with past practice, (ii) in accordance with the Company's capital budget a copy of which shall have been provided to Buyer, or (iii) up to $50,000 in aggregate capital expenditures that may be incurred, authorized or committed but not otherwise permitted by either clause (i) or (ii);
(o) fail to maintain its financial books and records in accordance with GAAP or make any material change to any of its methods of accounting or Tax, pension or accounting practice, policy, principle or procedure, except as required by any changes in GAAP or Applicable Law;
(p) make or rescind any material Tax election other than in the ordinary course of business consistent with past practice, amend any material Tax Return or settle or finally resolve any material Tax controversy;
(q) securitizecommence, compromise or create settle any financing arrangements material legal proceedings, other than in connection with the enforcement of the Company's rights under this Agreement and other than in the nature ordinary course of a collateralized debt obligation business consistent with respect topast practice, any accounts receivable, loans or other assets;except for matters disclosed in Section 6.1(q) of the Company Disclosure Schedule; or
(r) amend agree, whether in writing or modify the existing agreement between Company and Company Financial Advisor; or
(s) authorize any ofotherwise, or commit or agree to take any of, the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in do any of the conditions to the Merger not being satisfied or in a material delay items prohibited in the satisfaction of such conditionsforegoing paragraphs (a) through (q) in this Section 6.1.
Appears in 1 contract
Conduct of the Company’s Business. During the period from The Company covenants and agrees that, between the date of this Agreement and continuing until the earlier of the Effective Time and the date nominees designees of Parent or Subsidiary constitute a majority of the members of the board Board of trustees Directors of the Company (such earlier timeCompany, the “Control Time”), except either as consented to unless Parent shall otherwise consent in writing (including by email or other electronic transmission) by Parent in response such consent not to a written or oral request therefore from the Company (which response shall not be unreasonably withheld or delayed), ) or as set forth in Section 5.1 of the Company shall, and shall cause its subsidiaries to, conduct its and their business in the ordinary course and use commercially reasonable efforts to conduct its and their business relationships with third parties and to keep available the services of their present officers and employees, provided that it does not require additional compensation, and preserve its and their relationships with customers, suppliers and others having business dealings with the Company and its subsidiaries, and to maintain the Company’s qualification Disclosure Schedule or as a REIT, in each case subject to the terms of or otherwise expressly contemplated by this Agreement. In addition, without limiting the generality of the foregoing, except as expressly permitted in this Agreement, from the date hereof until the Control Time, the Company shall not, and shall cause its subsidiaries not to:
(a) the business of the Company and the Subsidiaries shall be conducted only in, and the Company and the Subsidiaries shall not take or propose to take any action except in, the ordinary course of business and consistent with past practice;
(b) neither the Company nor any Subsidiary shall, directly or indirectly, do or propose to do, any of the following: (i) authorizeissue, declare sell, pledge, dispose of, grant or pay encumber (or permit any dividends on Subsidiary to issue, sell, pledge, dispose of, grant or make other distributions in respect of encumber) any of its stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock assets of the Company or any Subsidiary, except inventory and immaterial assets in the ordinary course of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
business and consistent with past practice; (bii) except in accordance with the Share Option Agreementas contemplated hereby, issue, deliver, sell, pledge or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other security;
(c) amend or propose to amend its declaration Certificate or Articles of trust, certificate of incorporation Incorporation or bylaws By-Laws (or similar organizational documents);
; (diii) split, combine, subdivide or reclassify any outstanding shares of its capital stock, or declare, set aside or pay any dividend payable in cash, stock, property or otherwise with respect to such shares (i) acquire or agree to acquire except for any material assets (including securities) outside dividends paid in the ordinary course or merge or consolidate with any person or engage in any similar transaction or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or to any wholly wholly-owned subsidiary Subsidiary); (iv) redeem, purchase, acquire or offer to acquire (or permit any Subsidiary to redeem, purchase, acquire or offer to acquire) any shares of its capital stock; or (v) enter into any contract, agreement, commitment or arrangement with respect to any of the matters set forth in this paragraph (b);
(c) neither the Company and nor any Subsidiary shall (i) issue, sell, pledge or dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or securities convertible or exchangeable for, or any options, warrants or rights of any kind to acquire any shares of, its capital stock of any class or other property or assets or ownership interest (including without limitation, any phantom interest) whether pursuant to the Company Stock Plans or otherwise; PROVIDED that the Company may issue Shares upon the exercise of currently outstanding Company Stock Rights that are stock options; (ii) acquire (including without limitation, by merger, consolidation or acquisition of stock or assets or any other business combination) any corporation, partnership or other business organization or division thereof (or any material amount of assets, other than pending acquisitions or minority investments, in each case publicly announced prior to the date hereof); (iii) incur any indebtedness for borrowed money or issue any debt securities in an amount exceeding $5 Million in the aggregate, except for working capital loans to auto dealers in the ordinary course of business; (iv) enter into, terminate or modify any material contract, lease, agreement or commitment, except in the ordinary course of business which wouldand consistent with past practice; (v) terminate, when originatedmodify, qualify assign, waive, release or relinquish any contract rights or amend any material rights or claims not in the ordinary course of business, (vi) authorize, or make any commitment with respect to any capital expenditures in excess of $500,000 in the aggregate; (vii) make or direct to be made any capital investments or equity investments in any entity, other than investments in any wholly-owned subsidiary, (viii) except as Eligible Receivables permitted hereby enter into or amend any contract, agreement, commitment or arrangement with respect to any matter set forth in this Section 5.1(c); or (ix) settle or compromise any claim, action, suit or proceeding pending or threatened against the Company, or, if the Company may be liable or obligated to provide indemnification, against the Company's directors or officers, before any court, governmental agency or arbitrator, except in the ordinary course of business; PROVIDED that nothing herein shall require any action that might impair or otherwise affect the obligation of any insurance carrier under any insurance policy maintained by the Warehouse LineCompany;
(d) neither the Company nor any Subsidiary shall grant any increase in the salary or other compensation of its employees except (i) pursuant to the terms of employment agreements in effect on the date hereof and previously disclosed to Parent and (ii) in the case of employees who are not executive officers of the Company as set forth in Section 5.1(e) of the Disclosure Schedule, in the ordinary course of business and consistent with past practice, or grant any bonus to any employee other than bonuses that are immaterial in amount to employees who are not executive officers or senior level management key employees of the Company or set forth on Section 5.1(d) of the Disclosure Schedule or enter into any employment agreement or make any loan to or enter into any material transaction of any other nature with any employee of the Company or any Subsidiary;
(e) sellneither the Company nor any Subsidiary shall (except for salary increases for employees who are not executive officers of the Company, lease, license, encumber or otherwise dispose set forth on Section 5.1(d) of any of its assets or any interest therein, other than the Disclosure Schedule in the ordinary course (including of business and consistent with past practice) adopt or amend, in any respect, except as contemplated hereby or as may be required by applicable law or regulation, any collective bargaining, bonus, profit sharing, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund, plan or arrangement for the disposition benefit or welfare of any assets acquired as a result of a foreclosuredirectors, officers or employees (including, without limitation, any such plan or arrangement relating to severance or termination pay), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization;
(f) incur except as required by law, tax regulation, SEC pronouncement or suffer to exist GAAP, amend any indebtedness for borrowed money accounting policies or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse Lineprocedures;
(g) make or rescind any Tax material tax election or settle or compromise any Tax liability of the Company material United States federal, state, local or any of its subsidiaries;
(h) make or agree to make any capital expenditures other than in amounts of less than $75,000 in the aggregate;
(i) paynon-United States income tax liability, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, except in the ordinary course of business or in accordance a manner consistent with their terms, of Claims whether recognized past practice;
(h) neither the Company nor any Subsidiary shall take any action that would make any representation or disclosed in the most recent financial statements (or the notes thereto) warranty of the Company included hereunder inaccurate in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits ofrespect at, or agree as of any time prior to, the Effective Time, or omit to modify take any action necessary to prevent any such representation or warranty from being inaccurate in any manner, any confidentiality, standstill or similar agreement, or fail to enforce respect at any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;time; and
(i) increase each of the compensation or benefits Company and the Subsidiaries shall use its best efforts, to the extent not prohibited by the foregoing provisions of any directorthis Section 5.1, trusteeto maintain its relationships with its suppliers, officer or employee, except for, in the cases of non-officer customers and employees, increases in and if and as requested by Parent, the ordinary course that are consistent Company shall schedule, and the management of the Company shall participate in, meetings of representatives of Parent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee employees of the Company or any subsidiary as Subsidiary; and
(j) announce an intention, enter into any formal or informal agreement or otherwise make a result of consummation of commitment, to do any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, other than in the ordinary course of business;
(q) securitize, or create any financing arrangements in the nature of a collateralized debt obligation with respect to, any accounts receivable, loans or other assets;
(r) amend or modify the existing agreement between Company and Company Financial Advisor; or
(s) authorize any of, or commit or agree to take any of, the foregoing actions or any action that would result in a breach of any representation, warranty or agreement of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditionsforegoing.
Appears in 1 contract
Conduct of the Company’s Business. During the period from (a) From the date of this Agreement and continuing hereof until the earlier of the Effective Time and the date nominees of Parent or Subsidiary constitute a majority of the members of the board of trustees of the Company (such earlier time, the “Control Time”), except either as consented to in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed)Closing Date, the Company shall, and shall cause each of its subsidiaries to, Subsidiaries to (i) conduct its and their business in the ordinary course consistent with past practices (other than as specified herein) and shall use commercially its reasonable best efforts to conduct preserve intact its business organizations and their business relationships with third parties and to keep available the services of their its present officers and employees, provided that it does not require additional compensation, and preserve its and their relationships with customers, suppliers and others having business dealings with the Company and its subsidiaries, and to maintain the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreement. In addition, without limiting the generality of the foregoing, except as expressly permitted in this Agreement, from the date hereof until the Control Time, the Company shall not, and shall cause its subsidiaries not to:
(a) (i) authorize, declare or pay any dividends on or make other distributions in respect of any of its stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(b) except in accordance with the Share Option Agreement, issue, deliver, sell, pledge or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other security;
(c) amend or propose to amend its declaration of trust, certificate of incorporation or bylaws (or similar organizational documents);
(d) (i) acquire or agree to acquire any material assets (including securities) outside the ordinary course or merge or consolidate with any person or engage in any similar transaction or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company and other than loans to auto dealers employees in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse Line;
(e) sell, lease, license, encumber or otherwise dispose of any of its assets or any interest therein, other than in the ordinary course (including the disposition of any assets acquired as a result of a foreclosure), or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization;
(f) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for borrowings under the Warehouse Line;
(g) make or rescind any Tax election or settle or compromise any Tax liability of the Company or any of its subsidiaries;
(h) make or agree to make any capital expenditures other than in amounts of less than $75,000 in the aggregate;
(i) pay, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment provide notice to a Benefit PlanLiberty, no later than the fifth Business Day following the end of each calendar month, of the aggregate number of Company Options granted, the aggregate number of Company Options exercised, the aggregate number of Employee Shares issued and the aggregate number of Employee Shares reacquired by the Company, in each case, during such preceding calendar month, and (iii) enter into, amend not engage in any transactions or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action actions which, pursuant to fund Section 6.2(b) of the Stockholders Agreement, would require prior notice to or approval of Liberty without obtaining Liberty's prior approval, provided, however, that (x) notwithstanding the parenthetical references in any other way secure Sections 6.2(b)(ix) and (xi)(A) of the payment of compensation Stockholders Agreement to Liberty's consent or benefits under any Benefit Plan approval not being unreasonably withheld, Liberty will have the right to grant or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations withhold its consent with respect to any pension plan or change matters covered in such Sections 6.2(b)(ix) and (xi)(A) in its sole discretion and (y) notwithstanding the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (viprovisions of Section 6.2(b)(xi)(C) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company Stockholders Agreement, no Affiliate Transactions will be entered into or any subsidiary as a result engaged in without the prior consent of consummation of any Liberty, other than Affiliate Transactions set forth in Schedule 11.02(a) of the transactions Seller Disclosure Schedule (of Comcast Parties as Seller Parties) or Schedule 11.02(a) of the Purchaser Disclosure Schedule (of Comcast Parties as Purchasers), which may continue to be engaged in upon the terms set forth in the applicable agreement referred to in such Schedule 11.02(a) (or as otherwise described in such Schedule 11.02(a) to the extent no agreement is referenced) and in a manner and in amounts consistent with past practice.
(b) In addition to, and without limiting the generality of the immediately preceding paragraph (a), from the date hereof until the Closing Date, the Company will not, and will not permit its Subsidiaries to, except as required or specifically contemplated by this AgreementAgreement or consented to or approved in advance by Liberty, in its sole discretion:
(i) (A) make any change in or amendments to its charter or bylaws or any partnership agreement or membership agreement to which it is a party; provided (B) issue, grant, sell or deliver any shares of its capital stock or any of its other equity interests or securities, or any securities convertible into, or options, warrants or rights of any kind to subscribe to or acquire, any shares of its capital stock or any of its other equity interests or securities, or any phantom shares, phantom equity interests or stock or equity appreciation rights, or the entering into of any contract, agreement, commitment or arrangement with respect to the foregoing, other than (I) (x) up to an aggregate of 24,000 Company Options that nothing in this paragraph may be issued under the Stock Plan (k) shall preclude provided, however, that notwithstanding the payment by foregoing, if the Company requests Liberty's prior consent to the issuance of accruedmore than an aggregate of 24,000 Company Options pursuant hereto, but unpaid bonuses Liberty will not unreasonably withhold its prior consent; and, further provided, that no one Person may receive more than 1,500 Company Options, in the aggregate), (y) Company Options that may be issued pursuant to employees for 2004 and retroactive salary adjustments in each case as agreements set forth in Section 6.1(k6.01(b)(i) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute , or (yz) Section 7.2 in connection with the exercise and subsequent reload of the Declaration Company Options set forth in Section 6.01(b)(i) of Trustthe Company Disclosure Schedule, provided, in each case case, that such issuance is made in the ordinary course of business consistent with past practices and no Company Options may be issued to any individual or entity a Subject Holder, and (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject II) issuances of Employee Shares upon exercise of Company Options outstanding on the date hereof and disclosed pursuant to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting this Agreement in accordance with their terms in effect on the date hereof, and issuances of capital stock or partnership or other equity interests by a direct or indirect wholly owned Subsidiary of the Company to its immediate parent; (C) split, combine or reclassify the outstanding shares of its capital stock or any of its other outstanding equity interests or securities or issue any capital stock or other equity interests or securities in exchange for any such shares or interests; (D) redeem, purchase or otherwise acquire, directly or indirectly, any shares of capital stock or any other securities of the Company or any of its Subsidiaries other than Company Options, Employee Shares acquired by the Company from an employee of the Company or one of its Subsidiaries in the ordinary course of business consistent with past practices (and in the case of Employee Shares, following the exercise by such employee of his Company Options) and as set forth in Section 1.01 of the Company Disclosure Schedule, (E) except as required contemplated by this Agreement, amend or modify any outstanding options, warrants, or rights to acquire, or securities convertible into shares of its capital stock or other equity interests or securities, or any phantom shares, phantom equity interests or stock or equity appreciation rights, or amend or modify the Stock Plan or any Voting Debt or adopt or authorize any other stock or equity appreciation rights, restricted stock or equity, stock or equity purchase, stock or equity bonus or similar plan, arrangement or agreement; (F) make any other changes in GAAP as concurred its capital structure or the partnership or membership structure of any of its Affiliates; (G) declare, set aside, pay or make any dividend or other distribution or payment (whether in cash, property or securities) with respect to its capital stock or other securities; (H) sell or pledge any stock, equity or partnership interest owned by it or in any Affiliate, except in the Company’s independent auditorsordinary course of business; or (I) enter into or assume any Contract or modify or amend any existing Contract (other than entering into, modifying or change its fiscal yearamending any Company Shareholders Agreement or any applicable option agreements solely for the purpose of grants of Company Options made in compliance with clause (B) of this paragraph (i)) with respect to the foregoing;
(oii) enter into file a petition under the Bankruptcy Act or any transaction with any of other insolvency law, or admit in writing its affiliates other than pursuant bankruptcy, insolvency or general inability to arrangements in effect on the date hereof which have been disclosed to Parentpay its debts;
(piii) accelerate the collection of receivables commence or defer the payment of payables, settle any litigation or modify the payment terms of any receivables or payables, in each case, arbitration which is other than in the ordinary course of business;
(q) securitize, business or create any financing arrangements arising in relation to this Agreement and is likely to have a material impact on the nature of a collateralized debt obligation with respect to, any accounts receivable, loans or other assets;
(r) amend or modify the existing agreement between Company and Company Financial Advisor; or
(s) authorize its Subsidiaries, taken as a whole, other than any of, or commit or agree to take any of, the foregoing actions or any action that would result in a breach of any representation, warranty or agreement settlement of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the conditions to the Merger not being satisfied or in a material delay in the satisfaction of such conditions.action titled Liberty Media Corporation v.
Appears in 1 contract
Conduct of the Company’s Business. During the period from (a) From the date of this Agreement and continuing until the earlier of the Effective Time and or the date nominees of Parent or Subsidiary constitute a majority of the members termination of the board of trustees of the Company (such earlier time, the “Control Time”), except either as consented to this Agreement in writing (including by email or other electronic transmission) by Parent in response to a written or oral request therefore from the Company (which response shall not be unreasonably delayed)accordance with Article VIII, the Company shallwill, and shall will cause its subsidiaries Subsidiaries to, (i) conduct its business and their business affairs only in the ordinary course in compliance with applicable Law and so that the conditions to be satisfied by the Company on or prior to the Closing Date shall then have been satisfied and (ii) take the actions set forth on Schedule 5.2(a). The Company will use commercially reasonable efforts to conduct its and their business relationships with third parties and to keep available the services of their present officers and employees, provided that it does not require additional compensation, maintain and preserve its business and their relationships with customers, suppliers and others having business dealings with the Company and its subsidiariesoperations, and to maintain preserve its relationships with Persons having business relations with the Company’s qualification as a REIT, in each case subject to the terms of or contemplated by this Agreement. In addition, without Without limiting the generality of the foregoing, except as expressly permitted in this Agreement, from the date hereof until the Control TimeClosing Date, without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed (and will be deemed granted if not denied within ten (10) Business Days of Parent’s receipt of the Company’s written request), the Company shall not, and shall cause its subsidiaries Subsidiaries not to:
(ai) (iA) authorizeamend (whether by merger, declare consolidation or pay any dividends on otherwise) the Company’s Certificate of Incorporation or make other distributions in respect of any of its stock (except for dividends by a wholly owned subsidiary of the Company to its parent and except for distributions necessary for the Company to maintain its REIT qualification, avoid the incurrence of any taxes under Section 857 of the Code, avoid the imposition of any excise taxes under Section 4981 of the Code, or avoid the need to make one or more extraordinary or disproportionately larger distributions to meet any of the three preceding objectives), (ii) split, combine or reclassify any of its stock or issue or authorize or propose the issuance of any other securities Company’s Bylaws or (iii) repurchase, redeem or otherwise acquire any shares of stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities;
(b) except in accordance with the Share Option Agreement, issue, deliver, sell, pledge or encumber, or authorize or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of its beneficial interests, stock or any other security;
(cB) amend (whether by merger, consolidation or propose to amend its declaration of trust, certificate of incorporation otherwise) the charter or bylaws (or similar comparable organizational documents)) of any Subsidiary;
(d) (i) acquire or agree to acquire any material assets (including securities) outside the ordinary course or merge or consolidate with any person or engage in any similar transaction or (ii) make any loansexcept as set forth in Schedule 5.2(a)(ii), advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company and other than loans to auto dealers in the ordinary course of business which would, when originated, qualify as Eligible Receivables under the Warehouse Line;
(e) sell, lease, license, encumber or otherwise dispose of any of its assets the Assets having a value of $50,000 or any interest thereinmore, other than or dispose of Assets having in the ordinary course (including the disposition aggregate a value of any assets acquired as a result of a foreclosure), $100,000 or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring or other reorganization;
(f) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any “keep-well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoingmore, except for borrowings under the Warehouse Line;
(g) make or rescind any Tax election or settle or compromise any Tax liability sale of the Company or any of its subsidiaries;
(h) make or agree to make any capital expenditures other than in amounts of less than $75,000 in the aggregate;
(i) pay, discharge, settle or satisfy any Claim (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of Claims whether recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business except for cash payments (x) paid by any insurer or person other than the Company and any subsidiary of the Company, plus (y) an amount paid by the Company or any subsidiary of the Company not exceeding $100,000 per Claim, liability or obligation or $500,000 for all Claims in the aggregate.
(j) (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement, or fail to enforce any such agreement to the fullest extent practicable, including by seeking injunctive relief and specific performance or (iv) except, with respect to this clause (iv), in the ordinary course of business, enter into any material contracts or transactions;
(i) increase the compensation or benefits of any director, trustee, officer or employee, except for, in the cases of non-officer employees, increases in the ordinary course that are consistent with past practice, (ii) adopt any material amendment to a Benefit Plan, (iii) enter into, amend or modify any employment, consulting, severance, termination or similar agreement with any director, trustee, officer or employee, (iv) accelerate the payment of compensation or benefits to any director, officer or employee, (v) take any action to fund or in any other way secure the payment of compensation or benefits under any Benefit Plan or compensation agreement or arrangement; or change any actuarial or other assumption used to calculate funding obligations with respect to any pension plan or change the timing or manner in which contributions to any pension plan are made or the basis on which such contributions are determined or (vi) take any action that could give rise to severance benefits payable to any officer, trustee, director, or employee of the Company or any subsidiary as a result of consummation of any of the transactions contemplated by this Agreement; provided that nothing in this paragraph (k) shall preclude the payment by the Company of accrued, but unpaid bonuses to employees for 2004 and retroactive salary adjustments in each case as set forth in Section 6.1(k) of the Company Disclosure Schedule;
(l) take any action to exempt or make not subject to or to otherwise waive or cause to be inapplicable (x) the provisions of any Takeover Statute or (y) Section 7.2 of the Declaration of Trust, in each case to any individual or entity (other than Parent or its subsidiaries), or any action taken thereby, which individual, entity or action would have otherwise been subject to the restrictive provisions thereof and not exempt therefrom;
(m) take any action to delist the Shares from Nasdaq;
(n) make any material change to its methods of accounting in effect on the date hereof, except as required by changes in GAAP as concurred with by the Company’s independent auditors, or change its fiscal year;
(o) enter into any transaction with any of its affiliates other than pursuant to arrangements in effect on the date hereof which have been disclosed to Parent;
(p) accelerate the collection of receivables or defer the payment of payables, or modify the payment terms of any receivables or payables, in each case, other than water in the ordinary course of business;
(qiii) securitizeexcept as set forth in Schedule 5.2(a)(iii), and except for normal expenses incurred in the ordinary course of business, incur any additional liabilities in an aggregate amount of $75,000 or more, whether for borrowed money or otherwise, or create encumber any financing arrangements of the Assets, except for borrowing in the nature ordinary course of a collateralized debt obligation with respect tobusiness, not to exceed $150,000 at any accounts receivableone time outstanding, loans under the Company’s existing credit facilities or other assetsagreements;
(riv) amend or modify the existing agreement between Company and Company Financial Advisor; or
(s) authorize make any acquisition of, or commit investment in, assets (other than in the ordinary course of business and consistent with past practice) or agree to capital stock (whether by way of merger, consolidation, tender offer, share exchange or other activity) of any other Person in any transaction or any series of transactions (whether or not related);
(v) take any of, the foregoing actions or any action that would reasonably be expected to adversely affect its ability to consummate the transactions contemplated hereby;
(vi) fail to maintain in force all existing liability insurance policies and fidelity bonds relating to the System or the Assets, or policies or bonds providing substantially the same coverage;
(vii) enter into, extend, renew, replace, amend, modify, allow to lapse, waive any terms under, or terminate any material Contract to the extent consummation of the Merger or compliance by the Company or any Subsidiary with the provisions of this Agreement would reasonably be expected to (A) conflict with such Contract, (B) result in any violation of or default (with or without notice or lapse of time, or both) under such Contract, (C) give rise to a breach right of termination, cancelation or acceleration of any representationobligation, warranty any obligation to make an offer to purchase or agreement redeem any Indebtedness or capital stock, voting securities or other equity interests or any loss of a material benefit under such Contract, (D) result in the creation of any Lien upon any of the material properties or assets of the Company contained in this Agreement as or any Subsidiary under such Contract, (E) require Parent, the Company or any of the date when made their respective Subsidiaries to license or as transfer any of its material properties or assets under such Contract, (F) give rise to any material increased, additional, accelerated, guaranteed right or entitlements of any future date or would third party under such Contract, (G) result in any material alteration of, any provision of such Contract, or (H) be expected to prevent or materially impede, interfere with, hinder or delay the consummation of the conditions Merger or any of the other transactions contemplated by this Agreement;
(viii) enter into, extend, renew, replace, amend, modify, allow to lapse, waive any terms under, or terminate any Company Material Contract or enter into, extend, renew, replace, amend, modify, allow to lapse, waive any terms under, or terminate any Contract that would be such a Company Material Contract if it had been entered into prior to the Merger not being satisfied date of this Agreement;
(ix) (A) take any of the actions described in Section 3.23(a); (B) amend any of the Company Benefit Plans listed on Schedule 3.23(b) hereto; (C) enter into or amend any severance, retention, consulting or special pay arrangements with any Person; (D) other than as set forth in a material delay Schedule 5.2(a)(ix), enter into or amend any employment agreement in any manner, other than in the satisfaction ordinary course of such conditionsbusiness consistent with past practice (it being understood that any employment arrangement providing for annual base compensation in excess of $125,000 will be deemed not in the ordinary course consistent with past practice); (E) other than as set forth in Schedule 5.2(a)(ix), increase the compensation payable to any of its directors or officers; or (F) other than as set forth in Schedule 5.2(a)(ix), increase the compensation payable to any employee whose annual base compensation exceeds $125,000.
(x) (A) issue, sell or otherwise dispose of or agree to issue, sell or otherwise dispose of, any shares of its capital stock, or any other security convertible into or exchangeable for shares of the Company’s or each of the Subsidiary’s capital stock; (B) acquire or agree to acquire (through redemption, repurchase or otherwise) any of the Company’s or each of the Subsidiary’s shares of capital stock; or (C) authorize, grant or agree to grant any options, warrants or other rights to acquire any of the Company’s or each of the Subsidiary’s shares of capital stock, or any other security convertible into or exchangeable for shares of capital stock of the Company or any of its Subsidiaries; or
Appears in 1 contract
Samples: Agreement and Plan of Merger
